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The future for family business

José Manuel Lara is President of the IEF, Spain.

The IEF in Spain

The IEF is a non-profit-making association with Spain as its sphere of activity, and is made up of a group of family concerns. Its members are themselves all chairpersons, members of boards of directors, or members of the boards of management of the companies of which they are the owners. The priority aim of our association is to facilitate the development of the family company and draw the attention of society to the importance of this sector as a generator and origin of resources and wealth, the survival of which is fundamental to the satisfactory growth of our economy.

We have different modes of action to attain this objective, depending on the field in which we are working. First, with regard to our lobbying activities, we act in effect as the intermediary accepted by the Public Administration, making use of technical argumentation linked to a very direct knowledge of entrepreneurial realities as the means for sustaining continual improvement in entrepreneurial activity within the legislative framework.

Second, with regard to academic interests, the IEF performs an important role in the training sector, by way of a variety of different activities and seminars at which representatives participate from institutions and companies, as well as experts in the particular field concerned. In order to establish a deeper understanding of all the aspects that influence the continuing survival of family companies, the IEF also organises daily gatherings, conferences, and seminars, which are held with the most distinguished entrepreneurs and experts on a national and international level.

Third, there is the task of motivating the forthcoming generations of leaders in the Spanish family business sector, which is achieved by way of specific activities centred specifically on the progressive integration of young executives into the activities of the IEF, and sensitising these young people as a body to the relevance of their role in the transition from generation to generation.

In addition to these three areas of activity, the IEF also seeks to assist its members in confronting the challenges involved in managing their companies, by organising seminars and conferences under the auspices of professionals who are experts in the specific problems of the family company, and serves as a forum for the exchange of experiences between entrepreneurs.

The future
There are many directions to be taken for the future. The IEF is seeking to establish an appropriate legal framework which will take account of the specific problems of the family company, the draft version of which is being worked on by the government at this moment; we are also seeking the same kind of progress in the tax on donations that has been achieved with inheritance tax, to take account of the concept of the family foundation, which has had such good results in the US.

We are also awaiting the new draft of the law relating to corporate management and company organisation; we are striving to achieve the reduction or limitation of the joint rate of 70% on income and patrimonial assets tax; and we are analysing the subject of concentration effects and the forthcoming establishment of autonomous courts in Spain.

The objectives are to take action within the European Community, with the aim of expanding the role and the economic context occupied by family businesses in European development and, indirectly, influencing for the better the fiscal aspects which affect these companies.  As well as this, we are seeking to enhance the public image of family businesses as a fundamental driving force in economic development and in the creation of wealth and employment, and to obtain greater political and social recognition on the part of European governments and society in general.

International activities under the auspices of GEEF are directed towards establishing a level of co-ordination whereby each member is aware, precisely and specifically, of the terms under which the other integrated countries are working. The final objective will be to join forces so that we all pull in the same direction:  that of the family company.

My personal vision is based on the the path that must be pursued, as well as on the possibilities that arise from this kind of approach. More specifically, I see family businesses as entering an environment of more globalised growth, and in this sense I feel that we are still just setting out on the road. This environment means logically that companies have established the definition framework with regard to sufficient size, and the formula of internationalism that best suits them. I envisage that once Spain has finally overcome the shortfall in investments in R&D, we shall define a stable framework in that respect.

I believe that the principle of establishing a specific legal framework for the family company will follow shortly, and that it will function properly. Modifications have been introduced to the main tax areas in which we are still below the European level, such as taxes on patrimonial property and donations.  In addition, the matter of family foundations will be pursued, which could prove extremely beneficial to the country.

I also envisage that in 10 years' time, Spain will have family businesses that are strong, competitive and capable of attaining the level of our neighbours.

future, IEF, Spain
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