Freedom of Establishment: VALE Case—Direction for New Rules: Dreams or Reality?

Abstract

Freedom of establishment, as one of the fundamental market freedoms at European market, is fully achieved within natural persons while, when discussing the freedom of establishment for companies, there are still some doubts. The main problem arises from the fact that different Member States apply different principles to determine which company law applies to the company and that different restrictions of the freedom of establishment for companies exist because of the discrepancies between the Member States’ company laws. These problems brought up the idea of the so-called Fourteenth Company Law Directive, whose goal should be the regulation of the cross-border transfer of the companies’ seat. At the moment, the most useful way of regulating that question is still the European Court of Justice’s (ECJ’s) case law. The newly established companies do not face right of establishment problems, while they may be incorporated in any Member State. They will be incorporated in the country where they think that the corporate regime is the most advantageous. Once the company is registered, freedom of establishment guarantees the possibility of companies’ seat cross-border transfer. Authors analyze the last ECJ judgment in the area of company law and freedom of establishment—the judgment in the VALE case. The importance of the judgment is obvious through its introduction of solutions contained in recommendations for the Fourteenth Company Law Directive. The VALE judgment is certainly one step closer to this Commission initiative.