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TKenney, Ph.D. LawyerAvocat
TKenney, Ph.D. LawyerAvocat, Attorney
Category: European Law
Satisfied Customers: 816
Experience:  French lawyer, European law lawyer, 10+ years experience
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Can a company established in one EU country freely operate

Resolved Question:

Can a company established in one EU country freely operate in all other EU countries on permanent basis WITHOUT NEEDING TO ESTABLISH AT LEAST A BRANCH OR ANOTHER ENTITY IN SUCH OTHER EU COUNTRY/ies? If so, by which REgulation / Directive this would be required?
Submitted: 10 months ago.
Category: European Law
Expert:  TKenney, Ph.D. LawyerAvocat replied 10 months ago.

TKenney, Ph.D. LawyerAvoc :

Hello, The answer to your question depends on the EU country, the type of work the company is/will be doing in all the other EU countries, whether the company has/will have workers who will be working in the other EU countries, and whether income for the company will be made in the other EU country, and whether goods and services will be sold int the other EU country. The establishment of a branch or an entity in other EU countries is expecially aimed at the protection of consumers, the protection of salaried workers, and fiscal (taxation) purposes. Each EU countries has its own and different laws for the protection of consumers, the protection of salaried workers, and concerning income taxs and sales taxes to be paid.

TKenney, Ph.D. LawyerAvoc :

If that company

Customer:

Can you pls continue your sentence, starting with "if that company.....". We are talking about Croatia, a new EU entry. A company is claiming that by having a Dutch entity (direct sales of supplements) they can do business anywhere in EU without need to establish any other entity (not even a branch) in other EU countries. Croatia has a requirement that in order to undertake any permanent business activities at least a branch needs to be established in Croatia and we are trying to determine whether this is in line with EU legislation. Ministries are of no help - completely lost in trying to answer this one.

TKenney, Ph.D. LawyerAvoc :

the National laws of most EU countries require foreign companies to either establish a branch or have a legal representative. If that company established in one EU country does not have an activity that is regulated by the national law of the other EU country (obvious examples of activities regulated by law are pharmaceutical, medical, legal, taxi, etc...), if it will not have salaried workers resident of the other EU country, if it will not sell goods or earn an icome in the other European, if it will not be breaking any laws then it should be able to operate freely in other EU countries.

Customer:

It will sell goods, since direct sales (possibly also via internet, i.e. distant sales), and it is about supplements ( so highly regulated), no info re: salaried employees....the answer we need is: so if Croatian current legislation requires that in order to undertake any permanent activity by a foreign entity (whether EU or non-EU) at least a branch in Croatia should be established, then this is in line with the current EU company law, i.e. EU mandatory legislation to this effect?

TKenney, Ph.D. LawyerAvoc :

Yes, if Croatian current legislation requires that in order to undertake any permanent activity by a foreign entity (whether EU or non-EU) at least a branch in Croatia should be established, then this is in indeed in line with the current general EU company law. However, there are many specific European directives regulating the obligation of the establishment of branches and each European derective pertains to a certain sector of work, like banking, medical, pharmeceutical, etc.

Customer:

Can you pls indicate / quote any relevant EU directives specifically dealing with freedom to establish in the specific industry of direct sales of food supplements industry?

TKenney, Ph.D. LawyerAvoc :

That will require a lot of research.

Customer:

ok, so we will stay with this for now, since we do not have either the time or the budget to do extra research. Thank you.

TKenney, Ph.D. LawyerAvoc :

Here is a general EU directive that you can start frrom : http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2013:165:0063:0079:FR:PDF

TKenney, Ph.D. LawyerAvoc :

it is in French.

TKenney, Ph.D. LawyerAvoc :

I am trying to find the English translation.

Customer:

Thank you again, if necessary will be in touch, French is no problem.

TKenney, Ph.D. LawyerAvoc :

Direct 2013/11 UE of May 31, 2013

Customer:

Thanx again, appreciated. Best regards

TKenney, Ph.D. LawyerAvoc :

The PDF documnt if about 17 pages. It will be a good start for you.

TKenney, Ph.D. LawyerAvoc :

Here is another PDF : http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:302:0032:0096:fr:PDF

Customer:

Great! Again, thanx a lot, I will contine the research.......

TKenney, Ph.D. LawyerAvocat, Attorney
Category: European Law
Satisfied Customers: 816
Experience: French lawyer, European law lawyer, 10+ years experience
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