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Moving the company to another country within the EU


Olena Kryvko, lawyer, Ilyashev & Partners Law Firm
Source: The Yuryst i Zakon. The Liga Zakon

Currently, the companies registered in the EU member state may freely move their actual location, including its head office and production, to another member state.

In addition, in Europe it has become significant whether the companies are able to “change citizenship”, i.e. to change the location of the company registration. In this case, the company moves completely out of the jurisdiction of one state and is subject to the jurisdiction of another.

Relevance of the issue to the European companies is primarily connected with the development of business. Banks and other investors in the EU prefer to deal with the companies registered in the country with attractive investment policies, effective legal regulation of insolvency and debt recovery procedure. Accordingly, the company will be more attractive to investors and will have greater access to financial resources if it is registered in such state.

For these and other reasons, some companies try to change the place of their registration avoiding liquidation in one state and incorporation in the other state.

The EU lacks the uniform mechanism for all companies allowing movement of registration of the location. The report of the Commission on this issue provides for the alternative ways of such movement.

Therefore, perhaps, the European companies will soon have clear rules of the game allowing them to change the “citizenship”.

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