About European Family Businesses

European Family Businesses

European Family Businesses is the EU federation of national associations representing long-term family owned enterprises, including small, medium-sized and larger companies. The organisation was created in 1999.

Family businesses make up between 65 to 80% of all European companies, accounting for on average more than 40 to 50% of all jobs. Family businesses constitute a substantial part of existing European companies and have a significant role to play in the strength and dynamism of the real economy.

‘Family firms are important, not only because they make an essential contribution to the economy, but also because of the long-term stability they bring, the specific commitment they show to local communities, the responsibility they feel as owners and the values they stand for. These are precious factors against the backdrop of the current financial crisis.’

MILLION JOBS IN THE PRIVATE SECTOR

OF THE TOP-100 COMPANIES

0 %

OF TOTAL BUSINESSES

MILLION FAMILY-RUN BUSINESSES

Definition of Family Business

The common feature of these companies is that of the family dimension, where business and ownership are intertwined. Family businesses can be small, medium sized or large, listed or unlisted. Family businesses in Europe have been widely equated to Small and Medium- Sized Enterprises (SMEs) in public and policy discussions. However, this neglects the fact that there are also large family businesses.

A firm, of any size, is a family business, if:

The majority of decision-making rights are in the possession of the natural person(s) who established the firm, or in the possession of the natural person(s) who has/have acquired the share capital of the firm, or in the possession of their spouses, parents, child or children’s direct heirs.
The majority of decision-making rights are indirect or direct.
At least one representative of the family or kin is formally involved in the governance of the firm.
Listed companies meet the definition of family enterprise if the person who established or acquired the firm (share capital) or their families or descendants possess 25% of the decision-making rights mandated by their share capital.

Facts

In Europe, this unique category plays a vital role for the economy:

of all jobs of European private employment.

Family businesses reinvest profits responsibly preferring equity as opposed to debt financing.

Act as responsible owners because of their long-term strategy towards stakeholder interests, including employees, customers, shareholders and local communities.

Transmission of family values with a high sense of social responsibility.

Special concern for the local or regional base.

Natural incubators of an entrepreneurial culture, they foster the next generation of European entrepreneurs.

Stewards of social and economic capital from one generation to the next.

Family business across Europe: Percentage of total of companies*

* Data taken from Overview of Family Business Relevant Issues’ Kmu Forschung Austria Report (January 2009), Statistical Pilot Project on Family Businesses from the EC (2016) and individual statistical offices from different Member States.

EFB’s Vision is

The European Union, as a global vehicle that promotes the sustainable social market economic model, actively supports the role of family businesses as the cornerstone of responsible ownership and long-term entrepreneurship.

EFB’s Mission is

To promote the growth and continuity of family businesses in Europe, through a European project based on freedom, shared values, the rule of law, prosperity and social justice.