Take inspiration from the tax shelter to stimulate employee share ownership

The concept is simple: the employees of a company are granted the possibility of acquiring shares in it under advantageous conditions. They therefore share with shareholders and managers (often interested themselves, for example via stock options) the same objective of results…

However, employee share ownership remains underused in Belgiumon the one hand, and remains the prerogative of large companies, on the other hand. This is unfortunate in many ways: SMEs and, in particular, start-ups and scale-ups can’t lean on it align their employees with their objectives growth in interest them in their future results; companies of all sizes are missing out on this possibility of strengthen the cohesion between their employees; they also miss out on the benefit of this tool in terms of staff retentionwhile at the end of the covid crisis, the retention and attraction of talent has become a major issue.

For some time now, the MR would like to change this and encourage the use of employee share ownership by improving the legal framework and planning real incentives. When he was Minister for SMEs and the Middle Classes, Denis Ducarme opened the discussion. Then, last year, the liberal deputies from Brussels and federal David Leisterh and Benoît Piedboeuf made some proposals during the preparation of the recovery framework. Without succeeding in bringing them to fruition.

Today, from his folding seat as a federal deputy, Denis Ducarme is putting the work back to work with the support of his party. He began the project using the gentle method, by proposing to the House to adopt a resolution to urge the federal government to act. With other members of the MR, he prepares several billswhich will be submitted later.

Despite the coexistence of several legal mechanismsemployee ownership is lagging behind in Belgium: European ranking, our country is at the bottom of the scale in number of shareholders and in shares of capital, unlike France which sits in the lead (3.5% of the capital of large companies). In 2021, Belgium had barely 28,588 employee shareholders, compared to 2.8 million in France.

In Belgium as elsewhere in Europe, the big enterprises also represent the vast majority of employee shareholders: 94% of them used the system in 2021 for the benefit of 8.1 million employeesagainst a small fraction SMEs for the benefit ofbarely a million employees, according to statistics from the European Federation of Employee Ownership.

In his resolutionDenis Ducarme would like to urge the De Croo government “to put in place a coherent legal system” or “to revise the existing legal provisions” in order to facilitate the practice of employee shareholding in SMEs. He adds that it should educate banks to the problem, to encourage them to pre-finance interested employees.

“The MR wants open the debate on employee shareholding: it would be necessary to achieve to a law which brings together all the existing systems, which simplified and modernize them. Because it’s a gas factory today…” Allusion to Monory bis, to the participation plan, to the law of 1998 on stock options and to the mechanisms for the transfer of shares (company code). “It is necessary to reach a decision during this legislature with concrete tools available to all companies, and not just large ones”, continues the deputy.

The bills that will follow will hit two nails in particular, attractiveness and accessibility. “The tax shelter makes it possible to acquire shares in a young third-party SME while benefiting from a tax reduction of 30 to 45% and for amounts up to 100,000 euros while the Monory bis law of… 1983 limits the amount benefiting from a deductibility, in the event of purchase of shares of the company by its employee, to 780 euros – cannot be combined with pension savings. Why do we have such an attractive tax system on one side and so little on the other? Let’s compare the advantages of the two systems.“

Second track, to help employees raise the necessary funds, “we would have to convince the banking sector to create a specific loan for employee share ownership, possibly with a partial state guarantee”. Banks are already doing this in specific cases, for example in the case of the IT services company Easy, which opened its capital to its employees. Why not generalize the system?