Non EU small and medium sized companies do not always know where to set up a headquarter in Europe, for cross-border development in the Single Market.  These companies notably face the following obstacles:

– Difficulties and compliance costs associated with the operation of a company generated by the diversity of national rules.   Because of different legal frameworks applicable in each member state, doing business in Europe with subsidiaries in each member state can be extremely onerous.  Each member state has its own set of company forms, different company organs, share transfer regulations, management rules.  A controlling company must continuously seek legal advice, in each member state.  Even though the cost of such advice will largely depend on the size and complexity of the subsidiary, it may exceed 5,000 € a year for company secretary assistance alone in each member state.

– Lack of trust in foreign legal forms.   Clients would always prefer doing business with domestic corporate bodies (such as SARL, SAS or SA in France) rather than with foreign corporations.  In this respect, the ability to do business under a company form common to all Member States, which would confer an EU label, is considered a significant asset.

The European Private Company Statute (SPE) is a good vehicle allowing commercial development in Europe.

A European company is governed by the provisions of (EC) Council Regulation No. 2157/2001 of 8 October 2001 relating to the status of a European company.

France is a good place to set up a SPE with central location, good infrastructures and quick incorporation process.   Moreover, the registration process is integrated in the French commercial code (art. L229-1 and followings of the said code) which facilitates the registration.

European companies registered in the trade and companies register in France have legal personality with effect from their registration.

The advantages of the SPE are:

It exists in all Member States; is a flexible yet transparent company form; allows entrepreneurs to set up all their companies and/or their subsidiaries with the same management structure, regardless where they are located; and offers a European label that is easily recognizable throughout the EU.

Although the incorporation process of the SPE is slightly more expensive than a domestic corporation, entrepreneurs will at the end save time and reduce costs, especially legal costs related to setting up different company forms in different Member States.

Benoît LAFOURCADE

Co-Founder, Partner & Solicitor -
International Corporate Law & Litigation

Benoît, Delcade’s co-founder, is a Paris Bar lawyer and UK Solicitor (London).

Advisor for various embassies, working closely with the firm's team, Benoît offers his services to French and foreign companies requiring cross-cutting strategic and legal support in business law.

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