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Within TFUE, articles from 49 to 54 refer to the right of establishment recognised to companies and firms, which means the right to move to another member State of UE in order to practice an employment or an activity.
About it, art. 49 TFUE provides as follows: “Within the framework of the provisions set out below, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited. Such prohibition shall also apply to restrictions on the setting-up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State. Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article 54, under the conditions laid down for its own nationals by the law of the country where such establishment is effected, subject to the provisions of the Chapter relating to capital.”
Art 52 TFUE specifies that particular prescriptions imposed by national laws, constituting restrictions, are admitted only if justified on grounds of public policy, public security or public health.
This criterion is fundamental and it applies to all restrictions posed by national legislations to the rights recognised by European law.
Concerning companies, art. 54 TFUE orders that “Companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Union shall, for the purposes of this Chapter, be treated in the same way as natural persons who are nationals of Member States. ‘Companies or firms’ means companies or firms constituted under civil or commercial law, including cooperative societies, and other legal persons governed by public or private law, save for those which are non-profit-making.”
Within UE, in order to have access to the right of establishment, companies must have legal entity and especially profit purposes, which means for example consequently the exclusion of associations.
Moreover, it is necessary for companies to have the nationality of a UE member State and to have constituted and matriculated in conformity with legislations where they have statutory headquarters, central administrations or principal domicile.
There are two modalities able to identify the nationality of a company and those are being object of discussion between UE member States: one is the criterion of incorporation, used for example by United Kingdom and the Netherlands the other is the criterion of effective domicile, used for example by France, Italy, Germany and Spain.
Within incorporation criterion, companies acquire nationality of the State where they have matriculated, whereas within effective domicile criterion companies acquires nationality of the State where they have effective activity and headquarters, or administration.
European law did not choose a unique criterion, which means that interpretative conflicts and discussions can surely occur, when individuation of a company’s nationality is necessary.
About those criterions, a sort of preference seems to appear in art. 54 TFUE, where it is provided that the constitution of a company in conformity with national legislations determines recognition of nationality, even if the effective domicile is elsewhere.
In this specific instance, hence, European law seems to favour incorporation criterion.
The principal issue concerning practical application of the right of establishment, after identification of the nationality, is that uniformity between company national laws lack; in particular, it is not possible to transfer its headquarter without first extinguish the company and then re-constitute it.
Despite the existence of various European directives on the subject, lately with UE directive 2017/1132, the issue mentioned above has not yet find a solution.
As consequence and due to the exigence of definition of material application of the right the establishment for companies and its branches, the CJUE have developed an interesting jurisprudence.
For example, the CJUE sentence, widely known as Centros, has evaluated a company matriculated in the United Kingdom, even if its effective activity was in Denmark. The reason was due to the intent of avoid the application of Danish laws, more strict in the field.
In this case, European Judges have decided that the intent of avoid the application of a strictly national legislation did not constitute an abuse of the right of establishment, considering also that the inscription and matriculation made in the United Kingdom was correct and proper.
Avv. Agnese Micozzi
Bibliography
TFUE text
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:12012E/TXT&from=IT
Articles on the object
Libertà di stabilimento e restrizioni alle trasformazioni internazionali “in uscita”: il caso Polbud
http://www.europarl.europa.eu/factsheets/it/sheet/35/diritto-societario
Centros sentence
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A61997CJ0212
