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European social entrepreneurship funds

European social entrepreneurship funds



Regulation (EU) No 346/2013 on European social entrepreneurship funds


It introduces the European social entrepreneurship fund (EuSEF) label which is designed to identify funds focusing on European social businesses, making it easier for them to attract investment.


  • Social businesses address social objectivesas their corporate aim rather than simply maximising profit. It is a growth sector, representing 10 % of all European companies and employing over 11 million people. While they often receive public support, private investments from funds that invest in social entrepreneurs are vital for their success.
  • These funds face 2 problems:
    • it can be costly and difficult to set up such funds and attract investors, especially cross-border investment;
    • it is notalways easy for investors to identify such funds or compare the advantages of different types.
  • To remove these barriers, the EU has adopted legislation creating a label for European social entrepreneurship funds, making it easier for investors to know the destination of their investments.
  • The label:
    • makes it easier for investors to identify and choose EuSEFs;
    • helps social businesses through easier access to finance; and
    • enables investment fund managers to raise finance with less cost and complexity.
  • Funds that market themselves using this label have to direct at least 70 % of their investments to social businesses.
  • In addition, they have to provide key information to investors in a standardised way. This information covers areas such as:
    • the fund’s social objectives;
    • the social businesses it invests in; and
    • how it assesses whether these businesses achieve their social goals.
  • Once a fund has provided the required information and meets some important conditions on its organisation and operation, it can gather investments from across the EU without incurring major costs.
  • In addition to the 70 % rule, a fund manager must demonstrate good conduct of the business and effective systems and controls, and avoid any conflict of interest. The funds are supervised by the national authorities in the country where they are based and the label can be withdrawn if they do not fulfil any of the essential conditions.
  • In 2014, the European Commission adopted an implementing regulation (Regulation (EU) No 593/2014) which deals with the notification of events related to the passport of the managers of qualifying social entrepreneurship funds and with aspects concerning the removal of a manager of a EuSEF from the register.
  • As one of the measures under the Capital Markets Union initiative, the EuSEF regulation is currently being revised in order to increase the take-up of social entrepreneurship funds. On 14 July 2016, the Commission submitted a proposal to the European Parliament and the Council to amend the EuSEF Regulation for adoption under the ordinary legislative procedure.


It has applied since 22 July 2013, except for those articles giving the Commission the power to adopt delegated acts which has applied from 15 May 2013.


For more information, see:


Regulation (EU) No 346/2013 of the European Parliament and of the Council of 17 April 2013 on European social entrepreneurship funds (OJ L 115, 25.4.2013, pp. 18–38)


Commission Implementing Regulation (EU) No 593/2014 of 3 June 2014 laying down implementing technical standards with regard to the format of the notification according to Article 16(1) of Regulation (EU) No 345/2013 of the European Parliament and of the Council on European venture capital funds (OJ L 165, 4.6.2014, pp. 41–43)

Proposal for a Regulation of the European Parliament and the Council amending Regulation (EU) No 345/2013 on European venture capital funds and Regulation (EU) No 346/2013 on European social entrepreneurship funds (COM(2016) 461 final, 14.7.2016)

last update 14.11.2016