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Conference in Tallinn: Next step should be creating more possibilities for the cross-border mobility of companies

5.09.2017. On September 4-5, Estonian Presidency of the Council of the EU and the European Commission brought together stakeholders to discuss possible necessary changes in the existing EU company law framework on the 21st European Company Law and Corporate Governance Conference: Crossing Borders, Digitally. 

According to its Work Programme for the 2017, the European Commission has planned to “present a company law initiative to facilitate the use of digital technologies throughout a company’s lifecycle and cross-border mergers and divisions”. During the Conference, different aspects of possible ways forward in the field of EU company law was discussed.

In the field of digital company law Estonian business register was set as an example by the speakers. In Estonian business register the red tape for company registration has been abolished by enabling the businesses to use digital technologies while communicating with the register.

Deputy Secretary General for legislative policy of the Ministry of Justice of Estonia Ms. Kai Härmand said that in the digital company law, one must take into account the whole lifecycle of companies, including the beginning and the end of the company and the “life” in between. “Therefore, we should at least seek for more possibilities of using digital technologies for registering, filing and publication of company related information, as well as encouraging the companies to use digital technologies in the internal relationship even more. This is not the question of trying to be modern, this is a question about decreasing the administrative costs and removing unnecessary burdens for better business throughout Europe,” said Ms. Härmand.

The second area of interest covered by the Conference was cross-border mobility of companies. It was discussed that although cross border mergers in EU are possible thanks to the directive of cross-border mergers, other forms of cross-border mobility (division and conversion/transfer of registered seat) are theoretically possible on the grounds of freedom of establishing. Therefore, the cross-border mobility in practice is often complicated and under significant constraint of legal uncertainty as there are no clear procedural rules.

The lack of such simple and legally certain rules quite obviously prevents companies from exercising their freedom of establishment within the EU, said Ms. Kai Härmand. “Of course, if it had been that easy, the relevant instruments would have been adopted a long time ago already. Unfortunately, this is not the case, because the whole subject of cross-border mobility of companies is full of controversies and questionable aspects, i.e. the speakers brought out the exploitation of different national regimes to avoiding worker participation and tax avoidance, which still have to be thoroughly discussed,” Ms. Härmand said.

In order to offer a sufficient legal certainty to all the participants in the cross border mobility, the question of applicable law should have to be openly resolved. “It is delightful to see that the Commission is considering opening these debates once more and hopefully the discussions during the Conference have given valuable input for planning the further steps,” said Ms. Kai Härmand in the conclusions of the 21st European Company Law and Corporate Governance Conference: Crossing Borders, Digitally.

The Conference was organised by the Estonian Ministry of Justice as part of the Estonian Presidency of the Council of the EU in cooperation with the European Commission and is partnered by Ernst and Young and University of Tartu.

You can find the video with the presentations on https://livestream.com/eu2017ee/events/7698245.

 

Katrin Lunt
Spokesperson
Ministry of Justice of Estonia
+372 527 6806
katrin.lunt@just.ee