“Social Entrepreneurship”, and the broader “social economy”, is gaining momentum in providing innovative responses to current economic, social and environmental challenges by developing sustainable jobs, social inclusion, improvement of local social services, territorial cohesion, etc.
A social enterprise, operating within the social economy, follows a differentiated business model from that followed by mainstream businesses; its primary objective is not to generate profits for its owners or shareholders, but rather to create positive social impact. The social enterprise operates normally in the market, providing goods and services in an entrepreneurial and innovative fashion and uses its profits mainly for social purposes.
The Cypriot state, considering the multiple benefits that the society and economy can reap from the development of such businesses, has prepared a draft bill entitled ‘Law for the development and maintenance of a Registry for Social Enterprises’, which is currently before the House of Representatives.
The purpose of the draft bill is on one hand to regulate the registration of businesses in a Social Enterprises Registry, by specifying the criteria that a natural or legal person must meet in order to register as a social enterprise, and on the other hand to define the obligations of these social enterprises.
According to the provisions of the proposed Law, a business can be defined as a social enterprise if it falls under one of the following two categories:
(a) social enterprise of general scope: the primary purpose of such an enterprise should be to carry out a social mission through the promotion of positive social and/or environmental actions in the interest of society, and it should invest at least 70% of its profits to promote this social mission;
(b) social integration enterprise: the primary purpose of such an enterprise should be to carry out a social mission through the employment of persons coming from vulnerable groups of the population, and these persons should constitute at least 40% of the enterprise’s workforce.
The competent authority for the functioning and keeping of the Registry for Social Enterprises is the Directorate General for European Programmes, Coordination and Development (DG EPCD), as designated by the Council of Ministers, with a decision dated 5 June 2019 and in accordance of the above said legislation.
Within its remit, DG EPCD is currently studying all matters related to Social Entrepreneurship, in order to prepare the relevant Regulations and Guidelines and record the procedures that need to be followed for the development and maintenance of the Registry. This will allow the timely preparation of all necessary information regarding the procedures to be followed by businesses wishing to apply for registration at the Social Enterprises Registry, once the legislation is adopted by the Parliament.
Information Event: In this context, DG EPCD intends to organize an information event to raise awareness and promote networking among stakeholders. This is expected to take place in the last quarter of 2019, with the support of the European Commission, through the participation of an expert in the field.