Brussels, 4 April 2006
Free movement of capital: Commission calls on France to amend its legislation requiring co-owners to notify their managing agent of an address in France
The European Commission has officially called on France to amend its legislation requiring co-owners to notify their managing agent of an address in France. In the Commission’s opinion, this requirement constitutes an unjustified obstacle to the free movement of capital, in breach of the EC Treaty (Article 56). The Commission has thus issued a reasoned opinion, this being the second stage of the infringement procedure laid down in Article 226 of the EC Treaty. In the absence of a satisfactory reply from France within two months of receiving the reasoned opinion, it may decide to refer the matter to the European Court of Justice of the European Communities.
This provision places co-owners residing in other EU countries at a disadvantage compared with French residents. This is because property investments undertaken in France by non-residents are regarded as capital movements within the meaning of Article 56 of the EC Treaty, which prohibits any restrictions on capital movements.
The Commission acknowledges that this requirement is designed to allow
managing agents to comply easily with the strict conditions as to deadlines and
the production of evidence that have to be met when inviting co-owners to attend
annual general meetings. In its view, however, the requirement to notify an
address in France unduly complicates matters for co-owners residing in other EU
Member States and other, less binding solutions could be envisaged that would
allow not only managing agents to meet their obligations but also co-owners
residing abroad to have their correspondence sent to their real address so that
they could take part easily in managing their co-ownership.