Rhein on Energy and Climate

In October 2004 the European Union has introduced a new company statute, the Societas Europaea (SE), to facilitate business operating in several EU countries without having to adapt their company statute to the law of the host countries.

By doing so EU legislators had hoped to encourage EU companies to open subsidiaries in other EU countries without having to establish new legal entities.

It has taken quite some time before this idea turned into a success story. 10 years later only some 2,000 companies had chosen to register as a SE but the vast majority of them (86%) having less than five employees.

Only recently have big multinational companies like BASF, Allianz, Strabag, MAN, GfK, Sixt and Airbus discovered the advantages of registering as SE’s. This drive, however late, is not surprising; for companies operating in several member states the “European Company” is the the ideal statute because it is replicable in all member states.

Companies in new member states have largely despised the SE statute, their business continues to focus on their domestic market. Changing their company statute is therefore not yet attractive.

German companies have made more use of the SE than those in other member states. For the biggest country with the most EU-wide business this is perfectly normal. Dutch, French, Austrian and Luxembourg companies follow next, but regrettably only one Spanish company and no Italian or Polish companies have registered as SE’s.

Half of the companies registered as SE’s are found in the service sector, followed by chemical and metal industries. These sectors have increasingly set up subsidiaries in other European countries. For them the SE offers more mobility and flexibility national company law.

The number of companies operating EU-wide is bound to increase in the coming years. The trend towards more SE registration will therefore continue and even accelerate as we have seen in recent years.

The EU Commission would be well advised to organise targeted information campaigns on the benefits of the SE statute.

Eberhard Rhein, Brussels, 14/1/2014

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  1. The best targeted info. campaign would be that to pay the annual tax directly and only to the Euroarea. It would reduce companies’ administration and it would lay the foundation of a self-financing Confederation.

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