JurisdictionSummary: Austria
Source: EMN (+AWS and ÖSB Consulting) /
Types of vehicles available for microenterprises and self-employment / -  One-person-companies with a trading licence: individual enterprises without employees. The trading licence is connected with an obligatory membership of the Austrian Chamber of Commerce.
-  New self-employment: The Austrian law defines the legal form of new self-employment in the contract of manufacture only.
-  A dependent form of self-employment is given when a contractor is dependent from only one contract awarder and has little autonomy concerning his work, contract, working place and time or payment. Franchising is seen on the border of this type of dependent self-employment.
-  Limited liability company (GMbH)
Costs and Procedures / All self-employed persons need a trading license (some professions such as lawyers and doctors are exempt).
The Austrian law for supporting the foundation of new businesses (Neugründungs-Förderungsgesetz, NEUFÖG) is part of the taxation reforms of 2000 and can free from diverse costs connected to starting and taking over a company as well as supplements to wages and salaries in the first year, independent from a foundation as trade company, freelancer or farmer
Financial support programs during the transition period / -  Self-employed persons are in most cases not entitled to receive unemployment benefits
-  Exception: Periods of unemployment insurance, which can be achieved by extending the framework period before the claimant became self-employed
-  This insurance usually contains health-, accident- and pension insurance. Contributions to unemployment insurance are not considered.
Business Development Services / A variety of support mechanisms to promote self-employment and the viability and growth of business start ups exist. Support programmes are initiated by the Federal government and its institutions and by the Chamber of Commerce, but not specific for microenterprises
Entrepreneurship is especially enhanced through training and coaching programs and public loans. Basically those instruments are open for potential entrepreneurs no matter if they are employed or unemployed
ÖSB Consulting has a specific business support programme for microentrepreneurs carried out in the frame of the public business start-up programme of the Austrian public employment service (AMS). It provides advice, coaching and networking possibilities
Specific laws & regulations applicable to microenterprises, self-employment and microcredit / General corporate rules apply for microenterprises
Banking monopoly
There is no special legislation concerning microcredit.
Sources of funding for microcredit institutions / Commercial loans: banks
Public sources:
-  Government (Ministry of Economics and Labour, Ministry of Finance) with EIF counter-guarantee
-  Local government
-  European funds through ESF
Operational / financial autonomy / So far microcredit projects in Austria have not achieved sustainability and depend on public subsidies.
Usury rule (interest caps) / No interest caps
Tax incentives / N.A.
Access to guarantee schemes for banks and non bank institutions providing microcredit / AWS provides a guarantee scheme
Database recording borrowers’ history
Ability of non bank microcredit institutions to access such databases / N.A.
N.A.
Obligation for non bank microcredit institutions to provide their borrowers' credit history to such databases / No obligation
Significant initiatives taken to develop microcredit / -  In 2005 three EQUAL-Projects were started in Austria – one in Tirol, one in the eastern part of Austria and one in Styria. Each was focussing on different microcredit models. The pilot project in Styria ESCAPE was based on the existing national framework concerning the legal system and banking, and concentrated on women and migrants. microcredits are granted by an official bank (Raiffeisen Landesbanken). Liability / Security was taken over by the AWS (public security bank). The project reached around 450 people interested in the project. The microcredit-concept in ESCAPE was developed and realised by the ÖSB Consulting GmbH, one of the leading consulting firms in Austria and ended in 2007.
-  The project “Alternative Selbstständigkeit” (carried out by “ibw”) in Vienna and the project “Initiative Frauen gründen” in Innsbruck” have a similar procedure and similar conditions but focus especially on women who want to start a business.
-  The Austrian government has adopted in April 2006 a promotion package for micro and small enterprises. It is being implemented since July 2006 through austria wirtschaftsservice (aws).
-  Since 2007 the Austrian public employment service (AMS) provides microcredit in 5 provinces in the frame of the public business start up programme (Unternehmensgründungsprogramm UGP) with support from ÖSB Consulting.

Suggested measures to improve existing / create a new framework for microenterprises and microcredit

/ For microenterprises/self-employment:
-  Include businesses without employees into statistics
-  Improve legislation on self-employment, i.e. include definition of self-employment in the Austrian law
-  Simplify administrative procedures (tax declaration etc.)
-  Improve technical and business development services
For microcredit:
-  Promote partnerships between MFIs and banks
-  Authorise non bank institutions to borrow for on-lending
-  Build on the lessons of the EQUAL projects carried out in the field of microfinance
JurisdictionSummary: belgium
Source: Latham & Watkins Brussels & EMN with Fonds de Participation /
Types of vehicles available for microcredit and self-employment / Any natural person may start a business in Belgium either as a self-employed person or through a business.
Main types of corporate vehicles which can be used by microenterprises and self-employment: Société Anonyme (SA), Société Privée à Responsabilité Limitée (SPRL) and Société coopérative à responsabilité limitée (SCRL).
Costs and procedures / Cost of incorporation of a company includes registration duties, publication in the Official Gazette of company’s articles of incorporation and fixed notary fees. In total, cost amounts to €1,000 for "SPRL" and €1,500 for "SA".
Incorporation of a company in Belgium requires formalities such as enactment of articles of incorporation before a Belgian notary, registration with the National Office for Social Security in case staff is employed in Belgium and, if needed, administrative authorization to access a regulated profession and registration with VAT. Initial capital is required to set up a company. For SA, minimum capital required is €61,500 to be fully subscribed. For SPRL and SCRL, law requires a minimum capital of €18,550 of which at least €6,200 must be paid upon constitution (€12,400 in case of incorporation of a SPRL by one shareholder only).
Self-employed persons and companies are required to register with a central corporate database: "Crossroads Bank for Enterprises".
Created in 2003, there are ten registered business one-stop-shops in Belgium.
Financial support programs during transition period / As a general rule, an unemployed person ceases to benefit from allowances as soon as he/she starts running a business either as self-employed or through a company. However, prior to the incorporation, potential financial advantages received during training are not considered as wages and may be as such cumulated with unemployment benefits.
Business Development Services / -  Business development training for unemployed people (beneficiaries can continue to receive unemployment allowances during some trainings)
-  Business employment cooperative (e.g. Azimut and Debu(u)t)
-  Various programmes offered by MFIs: “Fonds de Participation” has developed a "Plan for young self-employed" which provides accompanying measures for persons under 30 and “Crédal” has a programme focused on women entrepreneurship
-  Credal and Hefboom offer a 2 year business support for the entrepreneurs who are granted with microcredit
Specific laws & regulations applicable to microcredit, self-employment and microfinance / No specific rules
Types of institutions providing microcredit / MFIs:
-  Fonds de participation (Federal public company under supervision of Ministry of Economy, Ministry of Finance and Ministry of Employment)
-  Crédal (cooperative microfinance institution operating in Wallonia and the Brussels Region)
-  Brusoc (a subsidiary of the partly state-owned venture capital company BRIC operating in former "Objective 2" part of Brussels Region)
-  Hefboom (private MFI operating in Flanders and Brussels Region)
Commercial banks do not offer their own microcredit products, they only act through partnerships with microfinance institutions (MFIs).[1]
Sources of funding for microcredit providers / -  MFIs receive financing mainly from public sources either at national, regional or European (European Social Fund, European Investment Fund and European Regional Development Fund) level.
-  Public MFIs (Fonds de participation and Brusoc) are financed mainly by public authorities: Federal Government and Brussels Region.
-  Crédal, private MFI, is financed by public and private sources.[2] As cooperative it receives financial support from their members.
-  Hefboom, private MFI, is financed by private sources. It is a cooperative which receives financial support from its members.
Operational / financial autonomy / Financial autonomy of public MFIs (i.e. Fonds de participation and Brusoc) is difficult to assess since they are financed mainly through public resources. Interest rates set by Brusoc and Fonds de participation do not allow them to reach sustainability.
The private MFIs (Crédal& Hefboom) are not financially autonomous: their operational costs for microcredit activities are covered by private donations.
Usury rules (interest caps) / Usury rules only apply to consumer loans.
However, the Fonds de Participation for its “prêt lancement” (business start-up loan) which makes up 85-90% of the Belgian microcredit market fixes its interest rate following general objective criteria and the market evolution of rates - the gap between the applied rate and the market rate may not exceed 5% and not fall below 3%.
Tax incentives / Private MFIs operating as authorized cooperatives, such as Crédal, may deduct dividends paid to their members up to €160/annum. However, there is no reduction of corporate tax.
Tax deduction to natural persons upon donation to MFIs.
Access to guarantee schemes for banks and non bank microcredit institutions / The regional government of Wallonia has set up a guarantee scheme for people who are granted a commercial bank loan < €25,000 from a traditional commercial bank.
Sowalfin, the Walloon Company of Financing and Guarantee for SMEs (Société Wallonne de Financement et de Garantie des Petites et Moyennes Entreprises).
Database recording borrowers’ history
Access to such databases / Databases on mortgage and consumer loans administrated by National Bank of Belgium
No information on investment loans
No direct access available for MFIs
MFIs can however require that applicants for micro-loans communicate their credit history.
Obligation for non bank microcredit institutions to provide their borrowers' credit history to such databases / MFIs have to report the granting of any consumer credit to "Central database for loans to private individuals".
Banks have to report granting of loans to microenterprises > €25,000 to "Central database for loans to enterprises".
Significant initiatives taken to develop microcredit / -  Creation of MFIs
-  Lower regulatory requirements to issue securities
Suggested measures to improve existing framework/create a new framework for microcredit and microenterprises / For microenterprises/self-employment:
-  Maintain unemployment benefits during transition period from unemployment to self-employment or setting up a microenterprise
For microcredit:
-  Implement specific regulations applicable to MFIs
-  Set up tax incentives for investment into MFIs.
-  Widen the scope of sources of funding available to MFIs acting through partnership with banks
-  Foster guarantee schemes for MFIs
-  Carry out more studies on the impact of microcredit
JurisdictionSummary: BUlgaria
Source: EMN with Nachala /
Types of vehicles available for microenterprises and self-employment / -  “Free professions” -lawyers, doctors, dentists, farmers. While in the past there was no obligation to register a company, now there are different requirements, for instance the farmers have to register in the municipalitywhere they own a land;
-  “One man company or trader”- this still is the lowest level of registration;
-  “Sole limited liability company” - there is fixed capital which is the level of responsibility of the company to third party;
-  “Limited liability company” -formed from more than one owner; there isalso fixed capital which is the level of responsibility of the company to third party but it is higher than the above one;
Costs and Procedures / There are too many requirements and procedures and the process is very slow.
There is no simplified status or procedure for self-employment or microentreprises.
There is no system of “one-stop-shop”.
Financial support programs during the transition period / There is no financial income support during the transition for unemployed or welfare recipients who set up a business and no provisions to allow a return to unemployment benefits or welfare in case of failure.
Business Development Services / N/A
Specific laws & regulations applicable to microcredit, self-employment and microenterprises /

There is no special law supporting microcredit

Banking monopoly - The central bank gives very strong support to all trade banks, but does not accept MFIs in the country as normal financial players in the field of microfinance

MFIs are registered either under the Cooperative Act, the Law for credit institutions or the Commercial Law
MFIs do not have right to collect deposits
Types of institutions providing microcredit /

Commercial banks: They grant a small number of small size loans but for consumer purposes and not for small business (i.e. Procredit bank)

Specialised microcredit banks: Procredit bank - Their average loan size is much higher than the loans given from the MFIs - that means that the bank supports SMEs but not microentrepreneurs
Credit cooperatives: Cooperative Union of Popular Funds; Cooperative Union “Association of Popular Savings Societies on the Internet”; National Cooperative Union (NCU) Evrostart; Federation of PMRCAs (Private Mutual Rural Credit Associations)
MFIs (joint stock companies): Nachala 2007 EAD; Ustoi; Mikrofond EAD
Sources of funding for microcredit institutions /

Main sources of funding available to (non-bank) microcredit institutions – for the cooperatives – are fees and loans from members and loans from creditors as well as grants from donors.

For the other type of MFIs there are grants from donors, shares from shareholders and loans from different investors, creditors.

Commercial loans – trade banks and funds from abroad and trade banks from the country
Equity investments – foreign investors (very rare cases)
Soft loans - It is difficult to find sources for soft loans; in Bulgaria the MFIs do not have experience with such loans.
Subsidies and donations from international aid: USAID and other similar organisations from developed counties
There is only one State programme supported with funds from the State budget