Conference on the European Private Company Brussels 10 March 2008
Panel 1: Costs, difficulties of setting up and running business in other Member States and the potential advantages of a European company form (legal barriers, reduction of compliance costs, European label …). Joëlle Simon Director for Legal Affairs French Business Confederation - MEDEF • Would an SPE statute solve these problems and if so, what would be its added value?
My answer is definitely yes, which comes as no surprise to many of you in this conference room. We, as business organisations such as MEDEF, CCIP, BUSINESSEUROPE, EUROCHAMBERS and many others, have initiated and supported that idea for years. The objective of a SPE statute is to offer companies operating cross-border a tool to address their legal concerns, to render cross-border business simpler and cheaper. A SPE statute will simplify the regulatory environnement of companies through the creation of a single standardized but also flexible legal form available and recognized in all Member States. The new statute is not designed to address all the problems facing by SMEs operating cross-border, and especially tax issues. What is very interesting in the comments on the last European Commission consultation document, is that “an over whelming majority of respondents would still find the SPE useful even if the question of taxation were not addressed in the SPE statute”.
MEDEF - Conference on the European Private Company, Brussels 10 March 2008
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• Which advantages would companies have thanks to the SPE statute compared to the current situation?
A SPE statute will facilitate the constitution of: - European groups or networks of companies since SMEs will no longer have to become familiar with 27 national company law systems. - Joint ventures between companies from different Member States by offering a neutral legal form. It will also streamline: - cross-border mergers, - transfers of seat from one Member State to another Member State, anyway the 14th directive on transfer of registered seat still keeps its utility. And last, but not least, SMEs will be able to act as European companies under “the European label”. As stressed by the respondents to the Consultation, European label is considered as an added value, because it would make cross border business easier and help companies compete in the global environnement by improving their image, visibility, competitiveness and dynamism. It would foster the economic integration of the new EU Member States. • Which cost savings would company have, thanks to the SPE statute compared to the current situation?
A SPE statute will contribute to reduce advisory and administrative costs, as part of setting up and running companies in other Member States. We have to keep in mind that SMEs do not necessarily have in-house lawyers. Two major sources of cost savings have been identified, through the different consultations: - First, the SPE will contribute to reduce legal and other advisory fees. That represents several thousands of euros from 10.000 to 30.000 euros
MEDEF - Conference on the European Private Company, Brussels 10 March 2008
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per company’s constitution for external lawyers fees. But this cost saving could be higher, depending on the country: up to 60.000 euros according to some responses; - Second, the possibility to opt for the same international organisation, no matter where they conduct business, would simplify and reduce the cost of internal organisation of groups of companies. Based on the French experience of the reorganisation of groups on the basis of the simplified joint-stock company – SAS-, we estimate the reduction of those administrative costs up to 40 per cent; - Moreover, even if it is more difficult to evaluate: a better access to financing could also be a source of cost savings. • Which companies are likely to use the SPE form?
The target is, of course, SMEs but groups even international groups which are composed of numerous SMEs are also likely to use the SPE form. It will certainly be used, at least in the beginning, by medium and large companies, but progressively by all companies which operate cross border and want to do business under a European label. How many companies could be interested in Europe? It is hard to say. The potential population is evaluated by DG Enterprise at around 9 per cent of European companies, which accounts for 2 million companies. *** To conclude, I want to stress that to meet those expectations, it is required to have a complete, yet concise regulation and model articles of association.
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MEDEF - Conference on the European Private Company, Brussels 10 March 2008
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