Facilitating business ownership conversion

👉🏽 This story is developed as part of the Doughnut Economics for Policymakers guide.

Governments in multiple countries have implemented policies to facilitate business ownership conversion, recognising that more distributive ownership models deliver wider societal benefits. Key support mechanisms include tax reliefs, financial assistance, and technical development programmes. These policies work most effectively within broader strategic and legal frameworks.

Overview

Governments have established policies and regulations to facilitate the conversion of businesses to alternative ownership structures, such as cooperatives and employee ownership models, which can advance specific social or ecological goals. Examples include: 

• Tax reliefs and incentives: Slovenia, Canada, the UK and the USA offer tax reliefs for conversion to employee-owned companies in the form of capital gains tax reductions on sold shares. Spain offers almost full tax exemption for company formation for worker-owned companies (“Sociedades Laborales”). 
• Financial support: Spain and Italy offer lump-sum unemployment benefits to workers to buy out companies that would otherwise go bankrupt. Italy also offers low-interest loans and equity capital to workers for such buyouts. Spain offers social security relief and local grants for new workers joining a cooperative. South Africa offers grants and loans for the development of cooperatives, with special grants for those led by disadvantaged individuals.
• Regulatory support: the UK and the USA have made conversion to employee ownership less onerous than other types of conversion or conventional sales .
• Assistance and development programmes: Italy and Spain also offer development programmes and technical support for newly formed cooperatives to enhance their viability and competitiveness.

Implementation

Policies to specifically support conversion of ownership work best as part of a wider strategy, backed by a clear legal framework or other favourable taxation policies. For example, in addition to favourable taxation for ownership conversion, Canada, the UK, the USA and Slovenia have dedicated legal frameworks for employee ownership or trusts that hold shares on behalf of the employees. 

While most countries provide financial support at national level, Spain and South Africa offer regional grants and local technical assistance.

Impacts

Employee involvement in ownership can contribute to improved working conditions and productivity. Tax reliefs and incentives have effectively boosted such employee ownership: for example, tax incentives in the USA have incentivised many companies offering stock shares to their employees with over 6,500 employee benefit funds established that hold over $1.8 trillion in total. A 2025 UK government study confirmed that tax incentives are a major factor in influencing owners to transition their company into an Employee Ownership Trust, which accounted for 6% of all business transfers in 2024. 

Financial and developmental support have also proven effective in boosting conversion rates: for example, the Italian government has financially supported 342 workers’ buyouts of bankrupt companies since 1985, affecting more than 10,000 employees. Workers’ buyouts have an above-average survival rate because employees choose a buyout when they are confident in succeeding. Italian government investment in such conversions has also generated a return of around 800% between 2008 and 2017.  

Challenges

• The documentation required to access funding for business conversion can be a barrier for small companies who may lack annual audited financial reports.  
• Lengthy bureaucratic processes create barriers for conversion: for example, workers may not be able to finalise a buyout before the law-mandated liquidation deadline for a bankrupt company.   
• Once converted to alternative ownership models, businesses still require wider policy support to remain viable: for example, financial markets often give employee-owned businesses low credit ratings, creating barriers for them to access loans. 

Reference and further reading

• Study on Workers' Buyouts: Italy: a detailed analysis of Italy’s support mechanisms by European Social Fund Plus (2025).
• Study on Workers’ Buyouts: Spain: analysis by European Social Fund Plus (2025).
• Employee Ownership Trust evaluation: HMRC in the UK (2025).
• UK government guide to transition into employee ownership.
• Employee ownership funds in the UK and the USA: overview by BDO Accounting and Legal Consulting.
• Slovenia passes Employee Ownership Cooperative Act in 2025: Institute for Economic Democracy.
• Transform Finance explore diverse types of Alternative Ownership Enterprises, their impacts and how to mobilise finance to support them. 

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