On the proposal for a regulation of the European Parliament and of the Council on the 28th regime corporate legal framework – 'EU Inc.'
EMPL-AD-788967
Committee on Employment and Social Affairs · Rapporteur: Johan Danielsson
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The Committee on Employment and Social Affairs gives its opinion on the proposed regulation creating a new company form, the 'EU Inc.', for cross-border operations.¶¶ It asks that the regime be focused on start-ups rather than becoming a general company form for businesses of any size, age or activity.¶¶ It calls for safeguards so that choosing this company form or place of registration cannot be used to circumvent workers' rights, national labour law, collective bargaining or conflict-of-law rules.¶¶ It says board-level employee representation under national law must not be circumvented through the choice of registered office or corporate structure, with national systems and thresholds staying national.¶ It urges particular caution in sectors with persistent labour exploitation, fraudulent competition and criminal infiltration, such as construction.¶
Committee position. The committee seeks to ensure the EU Inc. is focused on start-ups, that safeguards apply for workers especially in high-risk sectors, that national labour law and conflict-of-law rules are respected, and that workers' rights including board-level representation cannot be circumvented.¶
Key points
- Removing barriers for start-ups and young companies expanding beyond their home market is important for European competitiveness.¶
- Simplification must come with strong safeguards against regulatory arbitrage, fraudulent business practices and circumvention of workers' rights.¶
- A company should not escape obligations that would otherwise apply simply by choosing a particular company form or place of registration.
- National labour law, collective bargaining systems and existing rules on applicable law in cross-border situations must be fully respected.¶
- The EU Inc. should not alter the protection workers are entitled to in the member state where they actually work because it is registered elsewhere.
- Where national law provides for board-level employee representation, an EU Inc. should not circumvent those rights through its registered office or corporate structure.¶
- National systems and thresholds for worker participation should remain national, with negotiation procedures for EU Inc.s with substantial workforces in several member states.
- The regime should target the challenges of start-ups scaling across the Single Market, not become a general alternative company form for businesses of any size, age or activity.¶
- Particular caution is needed in sectors with persistent labour exploitation, fraudulent competition and criminal infiltration, including construction.
- A simplified European company form should not add another layer of complexity for authorities enforcing the rules.
- The aim should be to make it easier to be a good company in Europe, not easier to be a bad one.¶
- The report seeks an EU Inc. focused on start-ups, with safeguards for workers, especially in high-risk sectors, and no circumvention of workers' rights through regulatory shopping or artificial corporate arrangements.¶
Who is affected
- Start-ups and young companies seeking to expand across the Single Market: the regime should be targeted at their challenges.¶¶
- Workers: their protection in the member state where they actually work and their board-level representation rights must not be circumvented.¶¶
- Sectors with persistent labour exploitation, fraudulent competition and criminal infiltration, such as construction: particular caution is needed.¶
- National authorities enforcing the rules: a simplified company form should not add complexity for them.