Linking business registers across Europe will stimulate cross-border trade and save up to 70 million euro a year

On the 24th of February, the Commission voted in favor of the interconnection of business registers within the EU. For now, these registers are organized nationally or regionally. The new measure will allow cross-border access to essential information on the companies and ensure the updating of these data. These changes are of great importance for companies wishing to gain access to the European market. However, the Commission proposal must be submitted to Member States and the European Parliament.

Internal Market and Services Commissioner Michel Barnier said that, nowadays, more and more companies were offering their services to consumers across the EU. As a result of the growth of e-commerce, goods and services are crossing borders at an unprecedented rate. Consumers, particularly in the online market, need to be able to access reliable and up-to-date information in order to verify the legitimacy of these businesses. Today’s proposal aims to improve this legal certainty both for consumers and for businesses.

Company information is valuable for consumers, existing or potential business partners, as well as for public administrations. Cross-border access to business information allows a business to find out about another business elsewhere in the EU. It is also needed in the cases of cross-border mergers and/or seat transfer procedures.

Such cross-border access to business information requires that national business registers cooperate in various ways. Although some cooperation already exists, accessing company information from another Member State is often difficult.

It takes time, and translations are often unavailable. Businesses are faced with diverse national registration systems which is costly. Business information in the register of a company’s foreign branches is often not up to date. Furthermore, it is limited to certain types of information and it does not cover all Member States.

Today’s proposal will require all Member States to link up their business registers electronically. This will help business registers provide reliable and up-to-date information on the status of the company and its foreign branches in Europe. This will also improve efficient cooperation between business registers in cross-border transactions and mergers by ensuring better electronic links between them. The third aspect concerns improving cross-border access to official business information for interested parties such as consumers, existing or potential business partners, the public and the tax and justice administration throughout the EU. It is estimated that facilitating cross-border electronic access to business information could generate annual savings of more than 69 million euro.

Cross-border access to business information is also useful for consumers. The Commission’s 2009 report on e-commerce showed that, in 2008, 33% of individuals in the EU ordered online, but cross-border shopping reached only 7%.Consumers underlined that one of the reasons for not buying in another country was the difficulty of establishing whether a seller (usually a company) was trustworthy or not, mainly due to insufficient information and language problems. Today’s proposal should increase confidence and transparency in the European single market, ensuring a safer business environment for consumers.

Background information

All 27 Member States hold business registers. They are organised at national (e.g. Sweden, Ireland and Denmark), regional (e.g. Austria) or local level (e.g. Germany). Throughout Europe, business registers offer a range of services, which may vary from one country to another. The core services provided by all registers, however, are to examine and store company information, such as information on a company’s legal form, its seat and its legal representatives, and to make this information available to the public.

Facilitating access to official information on companies for third parties was one of the objectives of the First Company law Directive (68/151/EEC) in 1968. Its 2003 amendment ensured that all Member States had electronic business registers in place by 2007. Furthermore, other requirements in EU law, such as the cross-border mergers Directive (2005/56/EC) and the Directive on branch disclosure (89/666/EEC) have made the day-to-day co-operation of business registers a necessity. Nevertheless, the co-operation between business registers remains voluntary. As such, it fails to either guarantee certainty in cross-border legal procedures or to increase transparency in the Single Market.

This proposal for a Directive on the interconnection of central, commercial and companies registers amends the above-mentioned Directives 89/666/EEC and 2005/56/EC as well as Directive 2009/101/EC on the coordination of safeguards for the protection of the interests of members and third parties.

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