If you have a business and want to expand to another EU country, you could consider creating a European Company. The European Company – also known as SE – is a type of public limited-liability company regulated under EU law.
A company the head office of which is not in the Community should be allowed to participate in the formation of an SE provided that company is formed under the law of a Member State, has its registered office in that Member State and has a real and continuous link with a Member State’s economy according to the principles established in the 1962 General Programme for the abolition of restrictions on freedom of establishment. Such a link exists in particular if a company has an establishment in that Member State and conducts operations therefrom.
There are several advantages to setting up a European Company:
A simpler way to run business across more than one EU country: you can reorganise your activities under a single European brand name and run your business without setting up a network of subsidiaries;
Greater mobility in the single market. For example, you can transfer your registered office to another EU country without having to dissolve the company;
Framework for involving staff employed in more than one country in running your business.
How to set up a European Company
There are 4 possibilities, depending on your situation:
Merger (to form a European Company) – Public limited liability companies
Requirements: At least 2 companies from different EU countries
Forming a European holding company – Public or private limited liability companies
Requirements: At least 2 companies from different EU countries or A company that had, for at least 2 years, a subsidiary or a branch in another EU country
Forming a European subsidiary – Companies, firms or other legal bodies
Requirements: At least 2 companies from different EU countries or An entity that had, for at least 2 years, a subsidiary or a branch in another EU country
Conversion – A public limited liability company
Requirements: A company that had, for at least 2 years, a subsidiary in another EU country
Conditions for setting up a European Company
A European Company has legal personality as a public limited liability company. To establish a European Company you must have:
- your registered office and your head office must be in the same EU country
- a presence in other EU countries (subsidiaries or branches) or your company and other companies involved need to be governed by the laws of at least two different EU countries
- a minimum subscribed capital of EUR 120 000
- an agreement on employees participation in the company’s bodies and on how they will be consulted and informed
Requirements may vary between countries. Some countries may have higher capital requirements, while others require the head office and the registered office to be in the same place. Some EU rules on the European Company statute were transposed into national law. This therefore means that some of the rules may be implemented differently in different countries. This is also the case with the EU directive on employee participation.