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The Free Choice between the Right to Establish a Branch and to Set-up a Subsidiary — a Principle of European Business Law

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References

  1. Case C-307/97 Compagnie de Saint-Gobain, Zweigniederlassung Deutschland v. Finanzamt Aachen-Innenstadt, [1999] ECR I-6161, para. 43; Europäische Zeitschrift für Wirtschaftsrecht [1999] 16.

  2. Case 270/83 Commission v. France, [1986] ECR 273, report of session — section III 1, at pp. 288 et seq.

  3. Report of session — section III 2, supra n. 2, at pp. 293 et seq.

  4. Ibid., at p. 293.

  5. Ibid., at p. 283, para. 11.

  6. Ibid., at p. 304, para. 18.

  7. Case C-330/91 Commerzbank[1993] ECR I-4017, at p. 4043,para. 13; see especially Advocate General Darmon, ibid., at p. I-4031, para. 27.

  8. Advocate General Lenz, in Case C-250/95 Futura Singer, [1997] ECR I-2471, at pp. 2481 et seq., para. 36.

  9. Case C-311/97 Royal Bank of Scotland, [1999] ECR I-2651 at p. I-2672, paras. 22 et seq.

  10. The Saint-Gobain case, supra n. 1, at para. 44.

  11. Case C-101/94 Commission v. Italy, [1996] ECR I-2691.

  12. Ibid., at p. I-2701, para. 25.

  13. Ibid., at p. I-2707, para. 51.

  14. Ibid., at p. I-2724, para. 12.

  15. Ibid., at p. I-2726, paras. 22 et seq.

  16. Case C-l14/97 Commission v. Spain, [1998] ECR I-6717, at p. I-6725, para. 22, and at p. I-6741, para. 31.

  17. Case C-212/97 Centros Ltd v. Erhvervs- og Selskabsstyrelsen, [1999] ECR I-1459.

  18. Ibid., at pp. I-1472 et seq., paras. 16 et seq.

  19. Ibid., at p. I-1472, para. 15.

  20. Ibid., at p. I-1493, para. 27.

  21. For an early remark in that direction see Everling, Das Niederlassungsrecht im Gemeinsamen Markt (Berlin 1963) 18.

  22. Case C-251/98 Baars [1999] ECR I-2787, the opinion of Advocate General Alber, para. 33.

  23. Troberg, in: v.d.Groeben/Thiesing/Ehlermann, EU-/EG-Vertrag, 5th ed. (Baden-Baden: Nomos 1997) Art. 52 ECT, para. 12.

  24. Schön, “Europäische Kapitalverkehrsfreiheit und nationales Steuerrecht”, in: Gedächtnisschrift Knobbe-Keuk (Köln: O. Schmidt 1997) 743, at pp. 750 et seq.

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  25. For the latest comments on the importance of the freedom of establishment within the framework of the realisation of an efficient market see: Lackhoff, Die Niederlassungsfreiheit des EGV-nur ein Gleichheits- oder auch ein Freiheitsrecht? (Berlin: Duncker & Humblot 2000) at pp. 28 et seq.; Troberg, supra n. 23, Introduction to Arts. 52–58 ECT, para. 3.

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  26. On the material relationship between the freedom to provide services and the freedom of establishment see Everling, supra n. 21, p. 19 note 13; Lackhoff, supra n. 25, pp. 127 et seq.; more emphasis is placed on the actual differences by W.-H.Roth, in: Dauses (ed.), Handbuch des EG-Wirtschaftsrechts (Bayerische Verwaltungsblätter loose leaf) section E.I. paras. 2 et seq.

  27. Already on the advantages and disadvantages of the relevant organizational form see: Meyer-Marsilius, Das Niederlassungsrecht in der Europäischen Wirtschaftsgemeinschaft (Baden-Baden: Lutzeyer 1960) pp. 37 et seq.

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  28. Meyer-Marsilius, ibid., at p. 41.

  29. The option to have a number of different establishments which is guaranteed by Article 43 para. 1 EC is a similar aspect of the freedom of establishment — Case 107/83 Klopp, [1984] ECR 2971, at pp. 2989 et seq., paras. 19 et seq.; Case C-106/91 Ramrath, [1992] ECR I-3351, at p. I-3382, para. 20; Case C-53/95 Kemmler, [1996] ECR I-703, at pp. I-714 et seq., paras. 10 et seq.

  30. Case 205/84 Commission v. Germany, [1986] ECR 3755, at pp. 3809 et seq., paras. 52 et seq.

  31. The Saint-Gobain case, supra n. 1, at para. 44.

  32. Case 270/83 Commission v. France, supra n. 2, at p. 305, para. 22.

  33. Ibid., at p. 293, report of session, section III.2.

  34. Case C-19/92 Kraus, [1993] ECR I-1663, at p. I-1697, para. 32; Case C-55/94 Gebhard, [1995] ECR I-4165, at p. 4197, para. 37; Case C-250/95 Futura Singer, supra n. 8, at p. I-2500, para. 26; in more detail: Everling, “Das Niederlassungsrecht in der EG als Beschränkungsverbot — Tragweite und Grenzen”, in: Schön (ed.), Gedächtnisschrift Knobbe-Keuk (Köln: O. Schmidt 1997) 607, and Roth, “Die Niederlassungsfreiheit zwischen Beschränkungs- und Diskriminierungsverbot”, in: Schön (ed.), Gedächtnisschrift Knobbe-Keuk (Köln: O. Schmidt 1997) 709.

  35. See also Advocate General Jacobs’ opinion in Case C-76/90 Säger v. Dennemeyer Ltd., [1991] ECR I-4221, at p. I-4233, para. 18, on the inadmissibility of a foreign corporation to provide services regarding patents: “But the essential point is that Dennemeyer is receiving exactly the same treatment that it would receive if it were a company established in Germany. (...) The point is that the German legislation does not, it seems, permit the service in question to be provided in Germany by a limited company at all”.

  36. Emmerich/Habersack, Aktienkonzernrecht (1998) § 305 AktG para. 9.

  37. Koppensteiner, in: Kölner Kommentar zum AktG, 2nd ed. (Köln: Heymann 1987) § 305 AktG para. 18; Hüffer, AktG, 4th ed. (München: Beck 1999) § 305 AktG para. 10.

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  38. The Centros Case, supra n. 17, at p. I-1493, para. 28.

  39. Emmerich/Habersack, supra n. 36, § 305 AktG, para. 9; on the similar problem of a “redemption of minority shareholders” see Werlauff, EC Company Law (Copenhagen: Jurist- og Økonomforbundet 1993) at p. 20; on the freedom to set up groups of companies as regards contracts concluded between enterprises that is guaranteed by Community law see Steindorff, “Konzentrationskontrolle und Niederlassungsfreiheit, Ein Beitrag zur Konsultationspflicht der Staaten nach Art. 5 EWGV”, in: Wilke (ed.), Festschrift zum 125-jährigen Bestehen der Juristischen Gesellschaft zu Berlin (Berlin: de Gruyter 1984) 789, at p. 791; Steindorff, EG-Vertrag und Privatrecht (Baden-Baden: Nomos 1996) at p. 256; in detail: Eyles, Das Niederlassungsrecht der Kapitalgesellschaften in der Europäischen Gemeinschaft (Baden-Baden: Nomos 1990) at pp. 429 et seq., especially at pp. 437 et seq.

  40. German Federal Constitutional Court, Case 1 BvR 1613/94,100 BVerfGE 289, at pp. 302 et seq.

  41. Handelsblatt of 19/20 May 2000, p. 5.

  42. Eleventh Council Company Law Directive 89/666/EEC of 21 December 1989 concerning disclosure requirements in respect of branches opened in a Member State by certain types of company governed by the law of another State, OJ [1989] L 395/36-39 (30/12/1989).

  43. Twelfth Council Company Law Directive 89/667/EEC of 21 December 1989 on single -member private limited liability companies, OJ [1989] L 395/40-42 (30/12/1989).

  44. References can be found in Schnichels, Reichweite der Niederlassungsfreiheit (Baden-Baden: Nomos 1995) pp. 53 et seq.

  45. Everting, supra n. 21, at p. 18; Fröhlich, Niederlassungsrecht in der EWG und EFTA (Zürich: Polygraphisch. 1965) at p. 45, para. 31; Platz, EWG-Niederlassungsrecht und individuelle Rechtspositionen (Köln: Heymann 1966) at p. 19; for more recent comments see Lackhoff, supra n. 25, at p. 172; Schwarz, Europäisches Gesellschaftsrecht (Baden-Baden: No-mos 2000) at para. 128; Troberg, supra n. 23, Art. 52 ECT, para. 15; Scheuer, in: Lenz (ed.), EG-Vertrag, 2nd ed. (Köln: Bundesanzeiger 1999) Art. 43 para. 2; Edwards, EC Company Law (Oxford: Clarendon 1999) at p. 338.

  46. The Centros Case, supra n. 17, opinion of Advocate General La Pergola at pp. I-1471 et seq., para. 15.

  47. Steindorff, EG-Vertrag, supra n. 39, at p. 253; in detail: Eyles, supra n. 39, at pp. 106.

  48. Steindorff, ibid., at pp. 260 et seq.; apparently of a different opinion is Eyles, ibid., at pp. 439 et seq., who only demands a non-discriminatory application of the national law to groups of companies.

  49. See also Schön, “The Concept of the Shareholder in European Corporate Law”, 1 EBOR (2000) 3, at pp. 21 et seq.

  50. Ulmer, “Das Centros-Urteil des EuGH und seine Relevanz für das deutsche internationale Gesellschaftsrecht, Schutzinstrumente gegen die Gefahren aus der Geschäftstätigkeit inländischer Zweigniederlassungen von Kapitalgesellschaften mit fiktivem Auslandssitz”, Juristenzeitung [1999] 662.

  51. The Centros Case, supra n. 17, at pp. I-1495 et seq., paras. 34 et seq.

  52. Case C-101/94 Commission v.Italy, supra n. 11, at pp. I-2723 et seq., paras. 10 et seq.;Case C-l14/97 Commission v. Spain, supra n. 16, at p. I-6743, paras. 40 et seq.

  53. See also the already similar argumentation of the Court of Justice regarding the requirement of establishment with respect to insurance services in Case 205/84 Commission v. Germany, supra n. 30, at pp. 3809 et seq., paras. 52 et seq.

  54. C-70/95 Sodemare SA and others v. Regione di Lombardia, [1997] ECR I-3395.

  55. Ibid., at p. I-3412, para. 34.

  56. Ibid., at p. I-3434, paras. 32 et seq.

  57. Case-221/85 Commission v. Belgium, [1987] ECR 719.

  58. Ibid., at pp. 735 et seq., paras. 3 et seq.

  59. Supra 2.2.

  60. Tumpel, Harmonisierung der direkten Unternehmensbesteuerung in der EU (Wien: Österreichische Staatsdr. 1994) at pp. 13 et seq.; Dautzenberg, Unternehmensbesteuerung im EG-Binnenmarkt (Lohmar: Steuer, Wirtschaft und Recht 1997) at pp. 58 et seq.; Thömmes, “Verbote der Diskriminierung von Steuerausländern und Steuerinländern”, 19 Deutsche Steuerjuristische Gesellschaft (1996) 81, at pp. 86 et seq.; id., “Tatbestandsmäßigkeit und Rechtfertigung steuerlicher Diskriminierungen nach EG-Recht” in: Schön (ed.), Gedächtnisschrift Knobbe-Keuk (Köln: O. Schmidt 1997) 795, at pp. 805 et seq.

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  61. As reformed by the Steuerentlastungsgesetz 1999/2000/2002, in: Bundesgesetzblatt 1999, p. 304.

  62. Jacobs, Internationale Unternehmensbesteuerung, 4th ed. (München: Beck 1999) at pp. 215 et seq.; Knobbe-Keuk, Bilanz- und Unternehmenssteuerrecht, 9th ed. (Köln: 0. Schmidt 1993) § 8b III 3, p. 358; Brinkmann, Der Einfluβ des Europäischen Rechts auf die Unternehmensbesteuerung (Baden-Baden: Nomos 1996) at pp. 133 et seq. (in favor of the prohibition of restrictions); Dautzenberg, supra n. 60, at pp. 546 et seq.; id., Steuer-Revue [1992] 470, at p.478; Meilicke, “Diskriminierung beschränkt steuerpflichtiger EG-Ausländer und Niederlassungsfreiheit (Art. 52,58 EWG-Vertrag)”, Recht der internationalen Wirtschaft [1989] 640, at p. 642; Rädler/Lausterer, “Standortsicherungsgesetz — Verstärkung der Steuersatzdiskriminierung ausländischer Betriebsstätten ein klarer Verstoß gegten EWG-Vertrag und DBA”, Der Betrieb [1993] 451; id., “Die EWG-vertragswidrige Diskriminierung inländischer Betriebsstätten von EG-Kapitalgesellschaften durch den Körperschaftssteuersatz nach dem Standortsicherungsgesetz”, Der Betrieb [1994] 699; Herzig/Dautzenberg, “Die Einwirkungen des EG-Rechts auf das deutsche Unternehmenssteuerrecht”, Der Betrieb [1997] 8, at p. 14; Herzig/Dötsch, Der Betrieb [1998] 15, at p. 17; undecided is Wassermeyer, “Zwingt die Rechtsentwicklung zum Abschluß multilateraler Abkommen”, Der Betrieb [1998] 28, at pp. 31 et seq.; opposed are: Eyles, supra n. 39, at pp. 425 et seq.; Eckhoff, in: Birk (ed.), Handbuch des Europäischen Steuer-und Abgabenrechts (Herne: Neue Wirschaftsbriefe 1995) § 19 paras. 59 et seq.

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  63. On the reformed § 23 of the German Corporate Income Tax Act see Parliamentary Report 14/2683, p. 79.

  64. Haritz/Wisniewski, “Das Ende des Umwandlungsmodells, Erste Anmerkungen zu umwandlungssteuerrechtlichen Aspekten der geplanten Unternehmenssteuerreform”, GmbH-Rundschau [2000] 161, at p. 165.

  65. Herzig, “Körperschaftsteuersystem und Europäischer Binnenmarkt”, in: Schön (ed.), Gedächtnisschrift Knobbe-Keuk (Köln: O. Schmidt 1997) 627, at p. 633.

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  66. Case 270/83 Commission v. France, supra n. 2, at p. 283 para. 11.

  67. On this differentiation see Roth, supra n. 34, at pp. 737 et seq.

  68. Case C-418/93 and others, Semeraro Casa Uno and others, [1996] ECR I-2975, at p. I-3009, para. 32.

  69. Case C-379/92 Peralta, [1994] ECR I-3453, at p. I-3499, para. 34; on the importance of this statement for the competition of systems between the Member States see Schön, “Der “Wettbewerb” der europäischen Steuerordnungen als Rechtsproblem”, 23 Deutsche Steuer Juristische Gesellschaft (2000) 191, at pp. 210 et seq.

  70. Directive 69/335/EEC of 17 July 1969, OJ [1969] L 249/35.

  71. Of a different opinion is Brinkmann, supra n. 62, at pp. 119 et seq. With respect to the principle of territoriality as in this essay see: Tümpel, “Europarechtliche Besteuerungsmaßstäbe für die grenzüberschreitende Organisation und Finanzierung von Unternehmen”, 23 Deutsche Steuer Juristische Gesellschaft (2000) 321, at pp. 356 et seq.; Saß, Betriebsberater [1999] 447, at p. 450; Lehner, “Begrenzung der nationalen Besteuerungsgewalt durch die Grundfreiheiten und Diskriminierungsverbote des EG-Vertrages”, 23 Deutsche Steuer Juristische Gesellschaft (2000) 263, at pp. 283 et seq.; the only problem in this respect is the discriminatory exclusion of cross-border fiscal unity.

  72. In this direction see Herzig, supra n. 65, at pp. 632 et seq.; Tümpel, supra n. 60, at pp. 269 et seq.; Dautzenberg, supra n. 60, at pp. 469.

  73. Schön, supra n. 24, at pp. 761 et seq.; Tümpel, supra n. 71, at pp. 352 et seq.

  74. Case C-336/96 Gilly, [1998] ECR I-2793, at p. I-2836, para. 34.

  75. Lehner, supra n. 71, at pp. 281 et seq.; Schön, supra n. 24, at pp. 774 et seq.

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    Wolfgang Schön (Professor of Law)

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Schön, W. The Free Choice between the Right to Establish a Branch and to Set-up a Subsidiary — a Principle of European Business Law. Eur Bus Org Law Rev 2, 339–364 (2001). https://doi.org/10.1017/S1566752900000471

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