The co-operative business model has been growing in popularity in recent years as it has gained recognition for its ability to empower individuals, strengthen local economies, foster community, and promote equitable wealth distribution.

A co-operative is a unique business entity owned and operated by its members, who come together with a shared purpose to form an organisation. Comprised of five or more like-minded individuals, co-operatives operate democratically, ensuring that every member has an equal say in the decision-making process. This inclusive structure empowers members, fostering a sense of ownership, belonging, and collective responsibility, all while preserving individual autonomy.

Co-operatives can be found in various sectors, including agriculture, finance, housing, energy, retail, and worker-owned enterprises. A co-operative can employ individuals who are not members as employees, as long as the co-operative follows applicable labour laws and regulations. These employees are typically compensated through wages or salaries and may have different rights and responsibilities compared to the member-owners.

In this article, we delve into the defining characteristics of co-operatives and shed light on why more individuals, associations, and businesses are opting for this collaborative business model.

Advantages of Starting a Co-operative

While co-operatives may not be as well-known as other business models, their popularity is on the rise, thanks to the wide range of advantages they offer entrepreneurs across various industries. Let’s explore the benefits that make co-operatives an attractive choice.

Stronger Together: Harnessing Collective Potential

By pooling costs, resources, expertise, and efforts, members can unlock their collective potential, benefiting both themselves and their communities. Co-operatives distribute risks across the collective, making them more resilient in the face of market disruptions and reducing individual vulnerabilities. This approach fosters a holistic consideration of members’ interests, where successes and profits are shared equitably.

Access to Funding Schemes: Fuelling Growth

Co-operatives enjoy favourable consideration from funding agencies due to their social and economic benefits. By establishing a co-operative, you gain access to funding sources that may not be available to traditional business models, significantly increasing your chances of securing financial support.

Tax Exemption: Lightening the Financial Burden

Co-operatives in Malta and Gozo are tax-exempt, paying just 5% contribution from their profits to the Central Co-operative Fund, which is then reinvested in the growth and education of the co-operative model.

The best part? This contribution is tax-deductible, meaning co-operatives are exempt from regular business taxes. By choosing the co-operative model, you can enjoy the benefits of tax exemption while supporting the development of co-operative initiatives.

Networking: Building Bridges and Opportunities

Co-operatives provide exceptional networking opportunities, connecting like-minded individuals for collaboration and knowledge sharing both locally and internationally. Members gain access to a diverse community through formal events, conferences, networks and online platforms, expanding their professional network.

How can Koperattivi Malta help? Your Path to Success

Koperattivi Malta stands as the Apex organization for co-operatives across the Maltese Islands. With over 25 years of experience, we offer invaluable assistance and expertise across 15 different sectors.

Our co-operative members span various industries, ranging from information technology and consultancy to real estate and agriculture. Becoming a member of Koperattivi Malta entails the minimal 5% co-operative contribution, with no additional charges.

Members get to enjoy a number of additional benefits and advantages that are designed to foster growth and success:

Free Legal & HR Consultancy:

Starting a co-operative comes with various challenges, including limited budgets and endless paperwork, administration, and legalities. At Koperattivi Malta, we understand these concerns, which is why we offer free HR and legal consultancy services to co-operative members during the startup phase.

Our experienced professionals specialise in addressing the specific legal and HR issues that affect co-operatives. By providing expert guidance and support, we ensure that you receive the necessary assistance to navigate through these crucial aspects of co-operative establishment, alleviating your burden and setting you up for success.

Reduced Audit Fees:

Through our partnership with top professionals in the field, co-operative members can take advantage of a generous 20% discount on all their accounting, auditing, and taxation needs.

Our aim is to make these financial processes more accessible and cost-effective, ensuring that our members can navigate their co-operative’s financial obligations with ease. With this exclusive benefit, we strive to support our members in achieving financial efficiency and success in their co-operative ventures.

Free Use of Office Space for Start-Ups:

Securing funding for office space during the start-up phase can pose significant challenges for any venture. At Koperattivi Malta we offer all start-up members temporary use of our sizeable property, including a Multi-Purpose Hall, Board Room, and Office Spaces, for the initial 6 months. This helps new co-operatives establish a professional and conducive working environment without the burden of additional expenses.

Moreover, we offer the convenience of utilising our postal address as a registered business address, further streamlining their operations. By offering these practical benefits, we aim to empower start-up co-operatives and contribute to their smooth and successful beginnings.

Guidance and Processing of Funding Applications:

At Koperattivi Malta we provide comprehensive assistance in selecting the most suitable funding scheme for your co-operative and guide you through the entire application process. Whether it’s paperwork, legal advice, or any other support you need, we are with you every step of the way.

As of 2023, some of the current funding opportunities available include the Business Development 2021 scheme, SME Growth scheme, SME Consultancy Scheme, Business Enhance Schemes, and the European Agricultural Fund for Rural Development (EAFRD). It’s important to note that these opportunities are regularly updated, and you can find the most up-to-date information here (TBC)

Part of a Global Network:

Koperattivi Malta is part of a larger global cooperative network, expanding your co-operative’s reach and opening doors to international collaboration and opportunities. We are a member of a number of leading global organisations, including the International Cooperative Alliance (ICA), Euro Coop, CECOP and Copa-Cogeca.

At Koperattivi Malta, we believe in the power of fostering communication within the co-operative community. That’s why we organise the annual Koperattivi Malta Awards to recognise and celebrate the achievements of local co-operatives.

By fostering a supportive ecosystem, co-operatives contribute to the growth and impact of the co-operative movement.

Solidarity Fund:

The ‘KM Solidarity Fund’ supports co-operative members in times of need. Through the contributions of every co-operative member, we have created a safety net to assist fellow members when facing unexpected hardships or obstacles on their co-operative journey.

Interested in Learning More?

If you have further questions or need clarifications about the co-operative model, we are here to assist you. Feel free to reach out to us at [email protected] for a complimentary consultation with one of our team members. We are eager to provide the support you need.