Article 49 of the Treaty on the functioning of the EU (the freedom of establishment principle) allows entrepreneurs to set up a company in any EU country.
The EU is making it easier, faster and cheaper to set up a new company thanks to electronic "points of single contact" and physical "one-stop shops".
Points of single contact
The European Services Directive obliges EU countries to simplify all procedures involved in starting and carrying out a service activity. Since December 2009, companies and individuals must be able to complete online all necessary formalities, such as authorisations, notifications and environmental licences, through "points of single contact".
The "points of single contact" are e-government portals that had to be set up in each country by the public administrations. You can use the "points of single contact":
- to get detailed information about doing business abroad or in your own country;
- to complete administrative formalities concerning the establishment of a business or the cross-border provision of services.
During the Spring Council of 2006, national governments agreed to a series of simplifications to make starting up a company faster and cheaper anywhere in Europe. These simplifications called for cheaper and faster procedures and the implementation of a one-stop shop for all administrative procedures when starting up a company.
This commitment has been renewed in the Small Business Act where, in addition, EU countries have also committed themselves to shortening the time required to obtain business licences.
The European Council of December 2008 adopted the European Economic Recovery Plan which calls for additional reductions in the procedures for starting up a company.
Finally the communication on the review of the Small Business Act for Europe added some specific targets.
Currently the targets requested from EU countries are:
- set up some form of one-stop shop for business start-ups so that entrepreneurs can carry out all the required procedures (e.g. registration, tax, VAT and social security) via a single administrative contact point, either physical (an office), virtual (web), or both;
- reduce the time taken to register a new business to 3 days ;
- reduce the fees for business start-ups to less than €100.
Although compliance has improved, the level of achievement varies considerably from one country to another.
The EU will monitor how far national governments are delivering on these commitments.
As well as smooth start-up procedures, any successful new business requires a sound commercial strategy and secure financing.
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