European Commission – Press Release
Internal market: the Commission welcomes the removal of obstacles to the Swedish market for EU businesses; closure of the infringement procedure
Brussels, 29 September 2011 – The European Commission has noted that European Union businesses will henceforth enjoy easier access to the Swedish market thanks to the changes made by Sweden to its law on foreign branches. Consequently, Swedish consumers will now have access to a wider range of services, and it will be easier for Swedish companies to use foreign suppliers. In the light of this development, the Commission has decided to close the infringement procedure against Sweden.
The Commission previously took the view that the formalities imposed by Sweden for the establishment of businesses and the temporary provision of services on its territory by operators from other EU Member States were at odds with the Treaty and the Services Directive (Directive 2006/123/EC).
Before Sweden changed the law, operators legally established in the EU wishing to pursue an economic activity in Sweden were subject to formalities likely to dissuade or even prevent them from offering their services to Swedish businesses and consumers.
Even for temporary activities, operators had to be established and registered as a branch in the Swedish register of foreign branches before starting work. The alternative was to set up as a subsidiary, involving even more red tape. The procedure for registering the branch could take up to eight months. Finally, an operator established in another Member State needed both an agent responsible for receiving notifications of documents and a representative, both domiciled in Sweden.
What are the EU rules?
Pursuant to Article 56 of the Treaty on the Functioning of the EU (TFEU) and the Services Directive, businesses established in a Member State are entitled to provide services in other Member States without having to formally establish themselves there, in particular without having to set up a branch and without the need to deal with unjustified or disproportionate formalities. The same provisions prohibit Member States from imposing the obligation to have a representative and/or agent for the notification of documents domiciled in the host Member State.
Article 49 TFEU and the Directive prohibit Member States from obliging operators from other Member States to establish themselves with a particular legal form. The Services Directive also obliges Member States to deal as quickly as possible with any requests for registration and to remove any unjustified or disproportionate formalities, such as the production of certified copies or translations of documents. Following a complaint from an operator refused access to the Swedish market in 2007, the Commission found that the obstacles to foreign operators laid down under Swedish law were unjustified, disproportionate and at odds with the Services Directive. It therefore launched an infringement procedure against Sweden in 2009 and issued a reasoned opinion in early 2011 (IP/11/183).
The new legislation means that operators from other Member States (for example, an information technology expert, a management consultant, a self-employed craftsman or caterer) can now launch their temporary activities in Sweden immediately without having to wait up to eight months to be registered or having to pay additional fees.
If they want to establish themselves permanently in Sweden, they will henceforth be able to select the most appropriate legal form (agency, branch or subsidiary). If they choose to set up as a branch, the registration period has been shortened to two weeks (with the option to extend the deadline by a maximum of two weeks). Moreover, the obligation for operators domiciled in another EU Member State to have a representative domiciled in Sweden was scrapped in 2009, and the additional obligation for operators not established in Sweden to have an agent domiciled in the country to receive notification of documents was also removed.
More information on European law and on the law relating to the internal market in services can be found at:
More information about the procedures which can be initiated by the Commission against Member States can be found at:
For more information on EU infringement procedures, please see MEMO/11/646
Chantal Hughes (+32 2 296 44 50)
Catherine Bunyan (+32 2 299 65 12)
Carmel Dunne (+32 2 299 88 94)