EUROPEAN COMMISSION Brussels, 10.1.2017 SWD(2016) 436 final COMMISSION STAFF WORKING DOCUMENT Accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Comittee and the Comittee of the Regions on reform recommendations for regulation in professional services {COM(2016) 820 final}



Detailed information

on the assessment of regulation in professional services Table of content I. Introduction II. Economic impact II.1. Economic importance of professional services II.2. Prevalence of professional services' regulations and their impact II.3. Choice of Professions and restrictiveness indicator II.4. Econometric analysis of the impact of regulatory barriers III. Transparency and mutual evaluation between Member States III.1. Mutual evaluation exercise III.2. National Action Plans III.3. Public Consultation IV. Summary of analysis of the regulation of the professions analysed per Member State V. Annex on methodology of the economic indicator VI. Annex on econometric analysis of the impact of regulatory barriers in professional services on economic outcomes





I. Introduction Professionals and their activities are regulated by Member States at national, regional or sometimes local level. Great disparities lie between the Member States in how they choose to regulate a profession. Those wishing to provide their services may find themselves either unable to or forced to undergo costly and time consuming procedures before gaining access. In 2013 the Directive was amended by Directive 2013/55/EU and introduced a transparency and Mutual Evaluation exercise between the Member States of their regulated profession . The objective of this exercise was to achieve a regulatory environment that is proportionate and adapted to the real objectives of protecting general interests. In the Single Market Strategy the Commission announced, among other actions, that there will be a periodic issuance of profession-specific guidance for reforms in a number of selected professions, addressed to Member States concerned. This Staff Working Document provides the necessary background information for the recommendation made in the Communication. It first sets out the economic impact, in particular the economic importance of professional services, the prevalence of professional services' regulations and explains the new indicator measuring regulatory intensity (II.). The second part gives more information about the work undertaken by the Member States and the Commission in the past years in the framework of the mutual evaluation exercise and its follow-up (III.). The subsequent section describes the regulatory situation for the selected professions for each Member State (IV). Part V contains detailed explanations of the methodology used for the indicator and the last part provides the details of the econometric regression calculations (VI.). II. Economic impact II.1. Economic importance of professional services A better functioning of the Single Market gives European Member States advantages at the national as well as global level. Total services account for 71% of GDP, representing slightly more than € 10 trillion and 68% of total employment, i.e. roughly 150 million people . However, it is broadly acknowledged that more than 20 years after its creation the full potential of a single market in services remains unfulfilled. The significant role of professional services in the EU economy cannot be under-estimated as they account for 22% of the European labour force, or over 47 million citizens directly affected by occupational regulation. Numerous studies demonstrate the untapped benefits to furthering the Single Market in services. One such recent study suggested that an annual potential of €39 billion GDP remains to be captured . At present, based on what Member States notified in the EU Regulated Professions Database , there are over 5,500 regulated professions across the EU, if one considers the different regulatory regimes applicable throughout the 28 Member States. As highlighted by Chart 1, 40% of that total is accounted for by professionals in health and social services, followed by business services (15%), transport (9.6%), public services and education (9.1%) and construction (6.6%). Chart 1: Major groups of regulated professions, EU 28, October 2016 Source: EU Regulated Professions Database This number corresponds to an average of 200 regulated professions per Member State but with such large variances between countries that we see a range from the least, Lithuania reporting only 76, and Hungary with the most at 545 . However, these numbers tell little about the intensity (or proportionality) of the regulation, its economic impact or the characteristics of people affected by it. Nevertheless as a starting point to the present analysis it does serve to illustrate the scale of divergence in the European Single Market for services.

As highlighted by Chart 2, most regulated professions are regulated by way of reserved activities, i.e. by giving a monopoly to exercise certain activities or professions to individuals with the required level of qualification (72%), and in some cases title protection comes on top of the reserves (15%). These forms are the most stringent form of regulation compared to cases when only the title is protected but not access to the activities (11%). Chart 2: Regulated professions in the EU by type of regulation Source: Database of regulated professions The map below provides a visual representation of the occupational regulation across the EU countries in one profession as an example to illustrate the divergence between Member States in fundamental regulatory approaches (reserved activities, title protection, etc.). Chart 3: Categories of regulations by profession: Accountants / tax advisers (October 2016) Source: EU Regulated Professions Database Measuring the precise impact of regulation for professional services is difficult owing to the lack of such type of occupations in any EU or international statistical classifications and until recently no figures even existed regarding the prevalence and effects of occupational regulation on the EU labour market. Therefore, to support the Mutual Evaluation the Commission contracted the first ever EU-wide representative survey to provide the data necessary to measure the prevalence of regulated professions. II.2. Prevalence of professional services' regulations and their impact Conducted during the first quarter of 2015 this survey reached over 26,600 European citizens and concluded that 22% of the European labour force, or over 47 million citizens are directly affected by occupational regulation. As Chart 4 indicates, its prevalence varies across the Union (from 14% in Denmark to 33% in Germany, with a higher general incidence in central Europe). Chart 4: share of regulated professions in total labour force, 2015 Source: TNS survey (2015). The analysis of the survey as regards economic effects of regulation has shown that: Occupational regulation can be associated with a substantial loss in employment (up to 700,000 jobs in the EU on the basis of conservative hypotheses). Depending on the occupation, there could be between 3 and 9% more people working in a given profession, should access requirements be made less stringent. In terms of the impact on mobility, regulation imposes a significant cost to foreign-born workers. In particular, the proportion of foreign-born workers is about one third lower than among regulated workers. Automatic recognition arrangements in the EU are effective in facilitating entry into foreign markets and mobility across countries. Occupational regulation is associated with an aggregate wage premium of 4%. However, it varies considerably across professions, as it ranges from 6 % for professionals to 19% for craft and related trade workers. The study also shows that regulation of professions contributes to wage inequality. The regulation of professions is also found to distort the returns on education. The returns on education for unregulated workers increase consistently with the years of education achieved. In contrast, the returns on education for regulated workers are basically flat until post-secondary education. The return on a university degree is then much larger for regulated workers than for unregulated ones. Another factor is the lack of competition, evidenced by higher profit rates than in the rest of the economy, as Chart 5 shows, and a relatively lower turnover of companies. Some recent examples of reforms, lifting restrictions on entry and exercise of regulated professions, show a positive impact on employment as well as for consumers, as prices tend to decrease. Chart 5: Gross operating rate in selected sectors, EU28, 2013 (%)

Source: Eurostat and own calculations II.3. Choice of professions and restrictiveness indicator The Communication and this Staff Working Document contain recommendations and detailed and objective analysis of the regulations which apply to civil engineers, architects, accountants, lawyers, patent agents, real estate agents and tourist guides. These professions were selected because they belong to four key economic sectors (business services, construction, real estate and tourism). Mobility in these professions is relatively high and the professions are regulated in a majority of Member States yet taking divergent approaches meaning that potential for reforms most likely exists. Indeed, under these generic names are a multitude of professions regulated at national level with diverse specialisations varying from one country to another. In view of having a global picture of the restrictions in place for the activities covered under these generic professions it is necessary to analyse the restrictions for each of the sub-professions. For example, in Austria, there are 4 different professions exercising activities of an accountant (Personalbuchhalter, Bilanzbuchhalter, Buchhalter and Steuerberater) and in Spain there are 2 professions exercising activities of an architect (Arquitecto and Arquitecto tecnico). Hence restrictions applying to each of these professions are analysed. A new indicator on the restrictiveness of occupational regulation Based on the data collected from Member States during the mutual evaluation exercise, complemented by desk research by Commission services, a composite restrictiveness indicator has been developed. The purpose of the indicator is to measure the intensity of restrictiveness of national regulation as regards access to and exercise of regulated professions through the use of a standardised approach. A detailed explanation of the methodology used for this indicator can be found in Chapter V of this Staff Working Document. The indicator measures the relative restrictiveness of most existing barriers to the access to and exercise of regulated professions, essentially the following: the regulatory approach, i.e. the scope of reserves of activities and whether title is protected, level of education required, obligation to be a member of a professional organisation, existence of quantitative or territorial restrictions, legal form, shareholding and voting rights requirements, incompatibilities of activities for a professional, tariffs, restrictions on advertisement and marketing, professional indemnity insurance and additional authorisation requirements. In view of developing a full picture of the overall burden put on professionals, the indicator shows the cumulative effect of the different requirements leading to an assessment of the intensity of the regulation for a specific profession in a given Member state. For those countries and professions where there is only title protection, the indicator measures the restrictiveness to access the title protection even though it may be possible for a professional to exercise the activity without using the title. The indicator integrates the relative importance of the different restrictions by way of differentiated weights applied to each of the restrictions analysed. For example, the existence of reserved activities is considered the strictest form of restriction whereas the obligation to be covered by professional indemnity insurance is considered relatively less restrictive. Indeed reserves of activities are the entry point by which professionals may or may not exercise an activity. All the other types of restrictions introduce additional conditions for professionals to meet in order to access and exercise the activities. The scope of the reserves is key in determining the overall level of restrictiveness. The larger the scope the more restrictive the regulation will be. Restrictions cannot be analysed separately without taking into account the other mechanisms in place to complement or replace the specific restriction. This holistic approach enables an estimation of how restrictive a regulatory framework or approach is legally speaking for professionals. The indicator will however not reveal non-regulatory barriers or the role played specific horizontal laws or mechanisms in place to protect the consumers and the public interest objectives. This is why this indicator is accompanied by a qualitative assessment and analysis which provides additional information regarding the reality on the ground. The restrictiveness indicator of regulation in professions has many similarities with the OECD's Product Market Regulation (PMR) indicator, but also differs from it in certain aspects, including: (1) groups of professions under review are the same for four of them, three more being analysed for the indicator of restrictiveness; (2) this indicator assesses restrictions which are not considered by the OECD, including a range of requirements relating to qualification and training; (3) from a methodology point of view a simple average of all the restrictions was used by the OECD to calculate their composite indicator, while a weighted average was applied in the case of the Commission's restrictiveness indicator; (4) In the case of the OECD, the most stringent regulation are taken into account in situations where there are more than one profession existing at national level under the 4 main professional categories. The restrictiveness indicator takes into consideration all regulated professions at national level. For example, in the case of Austria, four types of accountants are analysed and the mean level of restrictions across the four professions is calculated. In the case of the OECD, only the highest restrictions are considered in the calculation. (5) Some of the activities covered by the OECD are not included in this new indicator. This is in particular the case of statutory audit activities which we consider as belonging to the profession of auditor, highly regulated and to be distinguished from accountant /tax adviser. Also concerning legal activities, the OECD considers notarial activities, highly regulated in most Member States, while we exclude these activities because we consider they fall within the remit of the notary profession and should not be mixed with lawyers. II.4. Econometric analysis of the impact of regulatory barriers An econometric analysis done by the Commission services indicates that the high levels of regulatory restrictions in the 7 analysed regulated professions coincide with poor economic outcomes, while lower restrictions seem to go hand in hand with better outcomes. Specifically, it is very likely that high sector-level restrictions in a country (as measured by the synthetic indicator) have a significant positive impact on the sheltered incumbents' rents in that sector (approximated by the profitability ratio) while possibly depressing the entry (the growth in the number of firms) in that sector. More details on the methodology used and the results can be found in the annex on the regression analysis in chapter VI. III. Transparency and mutual evaluation between Member States The issue of proportionality in the regulation of professional services is one that the European Council and Parliament has returned to repeatedly for some time. In its March 2012 conclusions, the European Council asked Member States to reduce the number of regulated professions and remove unnecessary or disproportionate barriers to entry to regulated professions. In its recommendation of June 2012 the European Parliament called on the Commission to identify areas where Member States are disproportionately blocking access to regulated professions. In the conclusions from its meeting on 24 and 25 October 2013, the European Council once again stressed the need for Member States to identify remaining barriers to accessing professions, assess their cumulative effect and take appropriate action. It is in this context and against the backdrop of appreciation that the regulation of professions is as much an economic issue as one of skills and qualifications, that the mutual evaluation was initiated. The present initiative evolved as an appreciation of both the prevalence and impact of suboptimum regulations that developed through this mutual evaluation process and the information it uncovered. III.1. Mutual evaluation exercise This exercise was conducted with Member States between 2014 and 2016 and aimed to obtain a comprehensive overview of the regulated professions in the EU as well as conditions to access these professions through (1) a simplification and improvement of citizens' access to information on regulated professions and (2) the commitment of EU countries to review the requirements they impose with regards to access to and pursuit of regulated professions. The exercise was concluded in early 2016. Member States reviewed their regulatory measures affecting regulated professionals in this context and assessing whether these are excessive or constitute barriers to economic growth. In practice each Member State was invited to examine on a case-by-case basis the regulations for access to each profession to ensure that barriers in place are not erecting undue obstacles or are not justified in the light of the objectives to be achieved. In order to enable Member States to exchange and compare the practices in place in each country, 12 professions were chosen as an example for in-depth discussions and the sharing of best practices during discussion with all Member States in Brussels. The aim of this process was, where beneficial, the revision of the conditions of access to and exercise of certain regulated professions, for instance by adapting the level of qualification required, by reducing the scope of reserved activities or by reducing or modifying other requirements imposed on professionals. In addition, the transparency and mutual evaluation also aimed to facilitate the mobility of skilled professionals within the European Union and to promote the development of services activities across national borders. III.2. National Action Plans

As a result of this process and according to the obligations set out in the revised Professional Qualifications Directive, Member States were required to submit so-called National Action Plans [NAPs]. 7 Member States, namely Cyprus, Greece, Hungary, Ireland, Malta, Slovenia and Spain have as yet not submitted any NAP and the level of ambition for reforms in regulation of professional services as expressed in those NAPs which were submitted varies greatly. By way of example, measures covered in the national action plans received include: -horizontal actions covering a range of sectors and professions. For example: Austria has introduced in 2013 a new post-evaluation instrument for every new legal act and a new uniform and electronic registration system for trades; Denmark has indicated in its action plan that it has recently undertaken or intends to do so in the near future a modernisation and simplification of the regulation for 41 of the 166 regulated professions in the country; France has adopted measures to facilitate the access to some legal professions and has recently taken or plans to take further measures to simplify the access to and exercise of several professions including the revision of legal form and shareholding structure requirements, the scope of reserved activities or the qualification requirements. -targeted measures on specific professions or types of restriction. For example: Germany intends to take some actions to modernise professions in business services; the United Kingdom is exploring potential reforms around building regulations with regards to the architectural profession, in veterinary nursing and surgery and the healthcare professions. In Italy, state exams and training requirements are being revised for some professions to better reflect the competences required and adapt the activities reserved of the concerned professions. In addition, empirical case studies commissioned during the mutual evaluation exercise provide useful examples of how the assessment of the impacts of regulation or a change thereof can be done and what the effects can be. These studies show that the reduction or removal of regulatory barriers has led to a reduction in the prices of the concerned services; positive effects on employment for the regulated professions as a whole or a relative increase in the number of new entrants into the reformed professions. In macroeconomic terms, this translates into a better allocation of resources, as shown in a recent study. III.3. Public Consultation A public consultation was carried out between 27th May and 22nd August 2016 to provide respondents with an opportunity to comment the proportionality of professional regulations and on the content of Member State's NAPs. Respondents were also given the opportunity to nominate a profession of particular interest to them and comment on its regulation. A total 420 responses were received and 21 separate submissions . Regarding the professions considered in this document we received 16 responses relating to the regulation of architects; 7 for engineers; 30 for lawyers; 24 for accountants; 3 estate agents; 16 tourist guides and; 1 regarding patent agents . The responses to two of the question most pertinent to the subject currently under discussion are presented below:





IV. Summary of analysis of the regulation of the professions analysed per Member State



AUSTRIA

_______________________ I. Overview On 1 November 2016 Austria had submitted information about 219 regulated professions. Among those professions, 10% concern business services, 9% the construction sector and 0,5% the real estate sector. According to a recent EU wide survey , 22% of Austrian labour force can be considered as working in regulated professions. This is slightly higher than the EU average (21%). As indicated in chart 1, for all professions selected, business churn (or turnover) rate is lower in Austria than in the EU on average. With the exception of the construction sector, the churn rates are also lower than the average churn rate for the total Austrian economy. This may be interpreted as an indication of the relatively low dynamism and competition within regulated professions in Austria. Chart 1: Business churn rate in selected sectors, Austria and the EU, 2013-14 (%) Austria has been participating very actively in the mutual evaluation exercise. However on 10 October 2016, still 20 % of the general information on different regulated professions was missing and almost 30% of the professions still need to be assessed as to the proportionality of their regulation. In its national action plan, Austria presents a new post-evaluation instrument introduced in 2013 for every new legal act and a new uniform and electronic registration system for trades, but only announces changes for a limited number of professions. A working group which should look into the possibilities of reforming rules on multidisciplinary activities of a number of regulated professions, has been initiated at the end of 2015. This working group came to the conclusion that there already are sufficient possibilities for cooperation between the professions. In June 2016 plans emerged about a significant reform of the trade law covering mainly craft professions, but also tourist guides and real estate agents. In 2016, the European Commission addressed a country specific recommendation to Austria in the area of professional services: Reduce administrative and regulatory barriers for investments, such as restrictive authorisation requirements and restrictions on legal form and shareholding, and impediments to setting up interdisciplinary companies, in particular in the area of services. II. Situation concerning the analysed professions Architects, Engineers, Lawyers and Patent attorneys are among the so-called “liberal professions” in Austria and subject to specific legislation for liberal professions. The same is true for tax advisers, while other accounting professions have recently been regrouped in a separate law.

Tourist guides and Real estate agents are considered to exercise commercial activities and hence are covered by the general trade law (Gewerbeordnung). The level of restrictiveness is higher in Austria compared to the EU weighted average for all professions under review with the exception of the profession of lawyer and accountant where it is slightly lower. Amongst the professions analysed, restrictiveness is highest for lawyers. Chart 2 presents the results of the quantification made by the Commission on the restrictiveness level in the selected professions. Chart 2: Restrictiveness indicator, 2016, Austria and the EU Source: European Commission services Architects/Engineers Both professions, covered by the same law, are regulated by a reserve of activities and a title protection. The reserve of activities includes the drawing up of public documents in their respective field of activity. In addition, activities in the field of architecture and engineering can also be exercised by a so called master builder or commercial engineer ("Baumeister / Ingenieurbüro") in the framework of the general trade law ("Gewerbeordnung"). There is a number of shared activities. However there are significant differences between these two groups regarding the scope of activities and also the conditions concerning the access to the profession: In order to ensure the independence and objectivity of architects and engineers there is a strict separation between the planning and the execution of activities. Whereas architects/engineers are limited to planning, consulting, coordination and supervising activities, the master builder has no such limitation and can plan/supervise and build at the same time. The required duration of study/professional training for architects and engineers is 8 years, including 3 years of mandatory traineeship/prior professional experience. Membership with the professional association is mandatory. Additionally to the qualification requirements, it is necessary to pass a specific exam in order to get the authorisation to practice which is valid throughout the national territory. Professional indemnity insurance is not obligatory (except for public works). The professional chamber organizes collective insurance coverage on a voluntary basis. Concerning legal form and shareholding requirements, the setting up of professional legal persons is possible, but only certain company forms are available, including the form of private limited liability company (GmbH). More than 50% of the shares have to be held by one or more natural persons authorised to exercise the profession of civil engineer; the remaining shares may be owned by either other architectural or civil engineering firms or by any other natural person. There are also strict rules on decision making, imposing that decisions can not be taken against the partners authorised to exercise the activity. The exclusive scope of the activity of architectural or civil engineering firms has to be the provision of architecture/engineering services limiting therefore the possibility of joint exercise with other professions. Accountants The law on accountancy, which came into force in 2014, covers three professions: senior accountant (“Bilanzbuchhalter”), accountant (“Buchhalter”) and payroll accountant (“Personalverrechner”). These professions are regulated by a reserve of activities for self-employed service providers. In order to become self-employed an official appointment is necessary and requires 1,5 to 3 years of professional experience. Membership with the professional chamber is mandatory as well as professional indemnity insurance. The law also foresees continuous professional development requirements. Reserve of activities differs between those professions (from payroll services and representation and assistance before administrative authorities to book-keeping ad drawing up of financial statements to tax advice), and most of them are also shared with tax advisers, auditors and partly with lawyers. The profession of tax adviser (“Steuerberater”), a liberal profession, is regulated by a reserve of activities together with title protection. The reserve is rather large, including also all the activities, which can be provided by the other three accounting professions. None of these activities is exclusively reserved to tax advisers; they either share it with the accounting professionals or with other liberal professions. While there are no specific restrictions or rules concerning legal form and shareholding for accountants, there is only a limited number of legal forms available for tax advisers. Shareholders must be either professionals or members of the family. Professionals from other Member States might not hold more than 25% of voting rights. There are also very precise rules providing that joint exercise of professions is only possible with other liberal professions, accountants, management and technical consultants. Professional indemnity insurance is mandatory.

Lawyers Like all the other liberal professions, lawyers are regulated by a reserve of activities and title protection. A lawyer’s right of representation, extending to all courts and authorities confers the power to represent parties on a professional basis, both in and out of the court, for all public and private matters. This power is reserved to lawyers. After 4 years of legal studies in Austrian law, a candidate has to gain at least three years of experience as a trainee lawyer before being admitted to the bar exam. Membership with the bar is mandatory. There is also an obligation to engage in continuous professional development. As far as legal form and shareholding requirements are concerned, as for other liberal professions, only certain company forms are available, including the form of private limited liability company (GmbH). More than 50% of the shares have to be held by lawyers. The other shares can only be held by a limited number of categories of persons foreseen by law, such as close relatives. The qualified registered lawyers must hold the majority in the company capital, and they must have a decisive influence on the decision-making process, which means a simple or the contractually determined qualified majority (usually up to 75%) for shareholders’ resolutions in favour of the professionals. In order to preserve independence and professional secrecy and to avoid a conflict of interests, the setting up of multidisciplinary companies is not permitted. However, certain forms of cooperation between lawyers and other liberal professionals are possible if core values of the profession are safeguarded in the interest of the clients. There are also specific rules dealing with the incompatibility between certain professions (notary) as well as general rules on incompatibilities. Professional liability insurance is mandatory. Patent agents The profession is regulated by a reserve of activities and title protection. The reserve covers counselling and representation before the Patent Office or other administrative authorities, drawing up legal documents in intellectual property matters and representing clients before the courts in intellectual property matters (for patent attorneys only before the Higher Regional Court (of Vienna). All these activities are shared with lawyers and notaries. After 5 years of technical studies, an examination of competencies in law has to be passed and a prior professional practice obtained, the length of which depends on the type of professional practice (e.g. 5 years in the office of a patent attorney or 7,5 years in the field of intellectual property rights). Membership with the professional association is mandatory. A candidate has to apply for entry on the list of patent attorneys which can be refused. Candidates also have to swear an oath. Regarding legal form and shareholding requirements, as for other liberal professions, only certain company forms are available, including the form of private limited liability company (GmbH). It is interesting to note that shareholders can only be patent attorneys and their close relatives (wife, children) or retired patent attorneys. In addition, a patent attorney may only be part of one company and joint exercise with other professions is therefore not possible. Professional liability insurance is obligatory. Real estate agents The profession of real estate agent is part of three professions in the sector of real estate trustees and can be exercised independently from the two other professions (which are real estate management and real estate developer). It is regulated by way of reserve of activities, which are brokerage of sale and of exchange of plots of land, legal estates, appartments, business premises, prefabricated houses and enterprises; brokerage of lease contracts (and similar contracts) for real estate; sale of real estate including hire purchase; brokerage of participations in property funds; advice and support for the afore-mentioned transactions. The activities of real estate agents also cover representation before of public authorities/courts (as far as it is not reserved to lawyers) as well as carrying out public auctions of properties. Part of the activities are shared, notably with lawyers and notaries, but others seem to be exclusive like obtaining information about properties to be sold or leased, the circumstances of their owner and the needs of prospective buyers or tenants or showing properties to be sold or leased to prospective buyers or tenants and explaining terms of sale or conditions of rent or lease. In general it takes between 1 and 3 years of training (depending on the pre-professional education) in order to acquire the necessary professional qualifications. As for other regulated professions covered by the trade law, the qualification is only required for the pursuit of these activities as a self-employed person or as manager. Four alternative paths are available for obtaining the necessary qualifications, mainly requiring successful completion of a specific qualifying examination covering general knowledge of regulations such as tax law, labour law and many others, as well as specific subjects relevant for the profession offer different possibilities for obtaining the necessary qualifications. Mandatory registration with the chamber of commerce (“Wirtschaftskammer”) is not linked to the regulation of the profession as anyone setting up a business has to become member of the chamber. Professional insurance is required as well as proof that there are no criminal convictions and no convictions related to violations of tax law. Austria considers regulation necessary also due to the fact that the agents act as trustees representing the interests of their clients, thus preventing extensive and costly disputes at court. Austria has indicated that it wants to maintain the current system, although an envisaged general review of the trade law announced in June 2016 could change this position. Tourist guides The profession is regulated by a reserve of activities. The scope of the reserved activities is particularly wide covering guidance of persons to show and explain to them 1) the historic treasures and the artistic and cultural heritage of Austria, 2) the social and political situation in national and international contexts and 3) sporting and social events. However some of these activities are shared with non-regulated professionals ("Reisebetreuer"), e.g. persons in tour buses and taxis giving commentary inside a vehicle. In order to become a tourist guide, an obligatory training of at least 250 training units has to be followed. Such training courses are offered by various institutes. In addition, there are different possibilities to get other studies recognized for the professional exam, thus extending the ways the qualification can be obtained. Mandatory registration with the chamber of commerce is not linked to the regulation of the profession, as anyone setting up a business has to become member of the chamber.

Austria has indicated that it wants to maintain the current system, although an envisaged general review of the trade law announced in June 2016 could change this position.



BELGIUM

_______________________ I. Overview On 1 November 2016 Belgium had submitted information about 130 regulated professions. Among those professions, 12,3% concern business services, 8,5% the construction sector and 0,8% the real estate sector. According to a recent EU wide survey , 17% of Belgian labour force can be considered as working in regulated professions. This is below the EU average (21%) As indicated in chart 1, for all professions selected, business churn (or turnover) rate is significantly lower in Belgium than in the EU on average. This may be interpreted as an indication of the relatively low dynamism and competition within regulated professions in Belgium. Chart 1: Business churn rate in selected occupations, Belgium and the EU, 2013-14 (%) Belgium has participated in the mutual evaluation exercise rather passively. The large majority of general information needed regarding its different regulated professions has been submitted in the regulated professions database. However on 10 October 2016, 20% of the general information on the different regulated professions is still missing and around 30% of the professions still need to be assessed as to the proportionality of their regulation. In its national action plan (NAP), Belgium presents an overview per sector of its regulatory framework for regulated professions and explains the particularities of the regulation due to the fact that it is a federal state where different levels of public authorities are involved in regulating professional activities. The NAP only announces changes for a limited number of professions. In 2016, the European Commission addressed a country specific recommendation in the area of professional services: Increase competition in the business services sector and the retail sector by removing unwarranted operational and establishment restrictions. II. Situation concerning the analysed professions The level of restrictiveness is lower in Belgium compared to the EU weighted average for the profession of civil engineer, lawyer and patent agent. It is higher in Belgium than in the EU on average for real estate agent, architect and accountant. Amongst the professions analysed, restrictiveness is highest for lawyers. Chart 2 presents the results of the quantification made by the Commission on the restrictiveness level in the selected professions. Chart 2: Restrictiveness indicator, 2016, Belgium and the EU Note: for the professions of civil engineer the indicator for Belgium measures the restrictiveness to carry the protected title Source: European Commission services Architects The Law on the protection of the profession of architects dating from 1939 regulates the profession by way of a protected title and a reserve of activities of which some are shared with civil engineers such as the drawing-up of plans and monitoring of the execution of building work.

The education required is composed of 5 years of study and 2 years of traineeship without the need to pass a state examination. There is a mandatory registration obligation with the professional. Currently, the Law does not require continuous professional development activities. The joint exercise of different professional activities is limited to services that are related to architect services. The law also specifically bans the possibility to jointly exercise the profession of architect and building contractor. The use of all corporate forms is allowed although a distinction is made between professional and ordinary company forms. In a professional company form, 60% of the shares and voting rights need to be held by the architects while in an ordinary company form only the majority of the shares and voting rights/management positions need to be in the hands of the professionals. Architects are required to take out professional indemnity insurance and an equivalence assessment is foreseen for insurance coverage taken out in other Member States. Besides a prior check of professional qualifications, several other authorisation requirements seem to exist to access the profession of architect such as administrative procedures to access the mandatory training or to become a full member of the professional body after having fulfilled the traineeship and a visa requirement from the professional body to submit building plans to local authorities. Engineers Civil engineers need to follow the same procedures as architects in case they work as/under the professional title of architect. Construction engineers in Belgium are “burgerlijk bouwkundig ingenieur /ingénieur civil en construction” and “industrieel ingenieur bouwkunde/ingénieur industriel en construction” and benefit from a protected title . The professional title is granted after having obtained a university or higher education degree, e.g. after 5 years (300 ECTS) education for the “burgerlijk bouwkundig ingenieur/ingénieur civil en construction” and “ingénieur industriel en construction” in the French and Dutch speaking community and after 4 years (240 ECTS) education for the “industrieel ingenieur bouwkunde” in the Dutch speaking community. No other requirements regarding the access or exercise of the profession have been identified. Accountants The profession of accountant comprises two different sets of professions i.e. expert-comptable/conseil fiscal and comptable agréé/comptable-fiscaliste agréé (accountant/ belasting consulent, erkendeboekhouder/erkendeboekhouder-fiscalist). All professions are regulated by way of a protected title and a reserve of activities except for the conseil fiscal which only benefits from a protected title. Bookkeeping/drawing up of financial statements is a reserved activity for those professionals. The required education is 3 years of university or post-secondary study and a mandatory traineeship of 3 years for expert-comptable/conseil fiscal and 200 days and a minimum of one year (and a maximum of three years) of professional training for comptable agréé/comptable-fiscaliste agréé without the need to pass a state exam. All self-employed professionals need to be registered with the relevant professional body and follow continuous professional development activities as determined by this body. For reasons of incompatibility there is a total ban to exercise certain activities simultaneously with the profession of accountant and to exercise jointly or in partnership such activities (e.g. real estate agent, insurance brokers, activities in crafts, trade, agriculture etc.). The expert-comptable/conseil fiscal can exercise its professional activities in any type of commercial entity and the majority of the voting rights must be held by the professionals. The comptable agréé/comptable-fiscaliste agréé can exercise its professional activities in any type of legal entity but must hold a majority of the voting rights (there are no shareholders restrictions). There is a mandatory professional indemnity insurance obligation and the insurance contract needs to be approved by the professional body. Lawyers The legal profession in Belgium includes the professions of Avocat/Advockaat/Rechtsanwalt and Avocat devant la Cour de Cassation/Advocaat bij het Hof van Cassatie and is regulated by way of a protected title and a reserves of activities for the representation of clients in court and before administrative authorities. The general education requirement for lawyers is 5 years of study and 3 years of training. An Avocat devant la Cour de Cassation/Advocaat bij het Hof van Cassatie is required additionally to have a professional experience of 10 years as a registered lawyer and must take an additional training of 4 years which is finalised by passing a state exam.

There is a mandatory registration obligation with the Bar. The number of licences granted to Avocat devant la Cour de Cassation/Advocaat bij het Hof van Cassatie appears to be restricted. Those lawyers are appointed by the King upon proposal by the Supreme Court. Both legal professions are required to follow continuous professional training by way of a credit-system determined on a yearly basis (an average of 20 credit points/year to be collected on a 3 years basis). Restrictions exist on the use of certain corporate forms although it is possible to exercise the profession in a company form with limited liability. The Flemish Bar however allows the use of all company forms on the condition that all shares are in hands of qualified lawyer(s). Irrespective of the legal form chosen, all shares and voting rights are reserved to lawyers. Lawyers are banned from jointly exercising the profession of lawyer with certain professions such as judge, notary and bailiff. The joint exercise with certain other professional activities is restricted where conflicts of interest can arise. Lawyers are required to take out professional indemnity insurance (a minimum coverage is being subscribed by the Bar for all its affiliated members and included in the membership fees. Each lawyer will subscribe to a complementary insurance if he/she considers it as appropriate). Patent agents Patent agents are regulated by way of a reserve of activity for counselling and representing clients before the Patent authority. This activity is however shared with lawyers. It seems however that an additional authorisation requirement exists in the form of sitting an exam in order to become an 'accredited' patent agent and be registered as such with the Registry. The education required is 4 years of study, an apprenticeship or training program of 3 years under supervision of an accredited patent agent and the successful completion of a state exam. There are no requirements to follow continuous professional development activities, to subscribe to mandatory professional indemnity insurance or to have a compulsory registration with the professional body. No other restrictions have been reported on the use of a corporate form, the holding of shares/voting rights or the joint exercise of professions/professional activities. Real estate agents Real estate agents are regulated by way of a protected title and reserve of activity. The intermediation in real estate transactions is an activity shared with notaries, while "syndic" management of properties can also be carried out by other professional such as lawyers. The justification for this is argued by the Belgians to be the broader and more complex nature of real estate activities in Belgium such as preparing sales files and lease/purchase agreements (e.g. collecting mandatory information on soil, energy performance and spatial planning). However, it seems that real estate activities are in essence concentrated on acting as an intermediary between buyer and seller of real estate property. Furthermore, certain activities are shared with notaries, who also bear the burden of responsibility. The education required is a bachelor degree of 3 years, one year of training offered by the professional body and a mandatory traineeship of minimum 200 days and this is the only pathway to obtain the professional qualification. Real estate agents are required to be registered with the professional body and to be covered by professional indemnity insurance. Continuous professional development activities are mandatory and although no restrictions exist on the use of corporate forms by the professional, in order to register a real estate company 60 % of the voting rights need to be held by qualified professionals. The joint exercise of professional activities is generally restricted to avoid conflicts of interest. Tourist guides Tourist guides are not regulated in Belgium. However, the professional title "tour guide" will shortly be protected in the Walloon Region, following the adoption of a new decree in this matter. According to that decree, the title "tour guide" will be granted to persons able to provide evidence of substantial experience and owning certificates related with the profession. The competent authorities consider that this new protection of the title aims to ensure professionalism in the exercise of the profession, but not to restrict nor limit the access to the profession: every person wishing to practice that activity will be allowed to do it, without however being authorized to bear the title of “tour guide”.





BULGARIA _______________________ I. Overview On 1 November 2016 Bulgaria had submitted information about 109 regulated professions. Among those professions, 8,3% concern business services and 10,1% the construction sector. According to a recent EU wide survey , 21% of Bulgarian labour force can be considered as working in regulated professions. This corresponds exactly to the EU average (21%). As indicated in chart 1, for construction, legal, real estate and travel agency related activities business churn (or turnover) rate is higher in Bulgaria than in the EU on average. This may be interpreted as an indication of the relatively high dynamism and competition within regulated professions present in these sectors in Bulgaria. Accounting and architectural activities, although similar to the EU average, have a lower churn rate than in the overall economy which may indicate a relative lower dynamism in these sectors Chart 1: Business churn rate in selected occupations, Bulgaria and the EU, 2013-14 (%) Bulgaria has participated actively in the mutual evaluation exercise. On 10 October 2016, less than 5% of the general information on regulated professions is missing. About 10% of the professions still need to be assessed as to the proportionality of their regulation. In its national action plan (NAP), Bulgaria presents a very detailed overview of the regulatory framework of the regulated professions. The NAP also announces periodic reviews of the scope of the reserved activities to be carried out for each regulated profession. In 2016 Bulgaria introduced regulation of the professions of tourist guide and travel agent. II. Situation concerning the analysed professions The level of restrictiveness is lower in Bulgaria compared to the EU weighted average except for the profession of tourist guide and to a lesser extend for civil engineer where the opposite is true. Amongst the professions analysed, restrictiveness is highest for lawyers. Chart 2 presents the results of the quantification made by the Commission on the restrictiveness level in the selected professions. Chart 2: Restrictiveness indicator, 2016, Bulgaria and the EU Source: European Commission services Architects/Engineers

Both professions are covered by the same law and are regulated by way of reserve of activities and a title protection. For professional companies, only the use of the title "design office" is protected. The title "design office" can be used subject to shareholding requirements (minimum 50% of the capital held by professionals), but the professional activity is not reserved to companies holding such titles. Thus, the service can be provided by qualified professionals in a company without restriction as regards its legal form or shareholding requirements. According to the Spatial Planning Act the activities reserved to architects/engineers consist in drawing up spatial plans and investment projects, and submitting those documents and plans to the competent authorities. The training requirements for exercising either of the professions in full capacity comprise 7 years in total and include a Master's degree and a State exam, as well as 2 years of experience with a fully qualified professional (or 4 years of relevant experience, according to the second path to obtain qualification). There is a legal obligation for the professional chambers to provide continuous professional development courses to interested architects/engineers, but it is not compulsory for them to follow that training. For both professions membership in the relevant professional organisation is compulsory according to the Chamber of Architects and Investment Design Engineers Act. As regards incompatibility, there is a general conflict of interest rule for working on projects. The Chamber of Architects and Investment Design Engineers Act provides that the same person cannot participate in the construction process as both designer and constructor. Professional liability insurance is mandatory according to the Spatial Planning Act. Accountants The profession is regulated in Bulgaria by way of reserved activities and the title “accountant” does not exist as such. Article 17 of the Accountancy act reserves to professionals, holding particular qualifications, the activity of drawing up consolidated, annual and interim financial statements of enterprises (with the exception of consolidated statements of microenterprises). This activity is shared with auditors. The Accountancy act establishes 5 pathways to obtain qualification with a total duration of

7 to 8 years, according to the pathway. The main path consists in Master's degree in accounting and economics, and a professional experience of 2 years in the area of accounting, external, internal audit and financial inspection or tax audits. The qualification requirement and the requirement for a clean criminal record are the only requirements professionals must fulfil. Additional authorisation requirements or restrictions to exercise the profession have not been identified. Lawyers The legal profession in Bulgaria is regulated by way of reserves of activities and protected title. The activities, reserved to lawyers consist in representation of clients in court (shared with in-house lawyers). In addition, lawyers may certify copies of documents or authenticate signatures (activity shared with notaries). Legal advice is not reserved to lawyers. A number of lawyers offer online consultations through their websites. Recently, the scope of the reserved activities to lawyers has been reduced, concerning the registration of companies. The activity is now open to other professionals, such as accountants, but also to non-professionals. The registration of companies in the Commercial Register is supervised by the Registry Agency and is no longer done before the courts. As a consequence, the registration fees, practiced by other professionals, such as accountants for registration of companies have been significantly lowered. However, a new draft-law has been submitted in 2015, introducing a wide range of activities, exclusively reserved to lawyers, such as giving oral and written consultations and statements on issues of law, preparation of complaints, drafting of notary acts, testaments, etc. The level of qualification required is Master's degree in law, six-months professional traineeship, successful completion of a Bar exam and 2 years of relevant professional experience. Candidates holding an educational and scientific degree of "Doctor of laws", as well as individuals who have a legal service record of more than 5 years may register with the Supreme Bar Council without passing an examination. Professional liability insurance is mandatory. Only a limited number of legal forms are possible, whereas shareholding requirements provide for 100% capital ownership for lawyers.

Patent agents The profession of industrial property representative is regulated in Bulgaria by way of reserved activities and protected title. The activity of filing patents is exclusively reserved to industrial property representatives. They share with lawyers the activity of representation before the courts in intellectual property matters. The total duration of the education required is 7 years (Master's degree in law, technical disciplines or intellectual property), two years of professional experience in intellectual property and a specific State exam. Membership in a professional association is not required, but there is an obligation to enrol in the Register of Industrial Property Representatives. Incompatibility rules exclude involvement in trade and in salaried activities, as well as with the status of civil servant. Additional requirements have not been identified, except for clean criminal record. Real estate agents The profession is not regulated in Bulgaria. There have been several requests from members of a professional association to regulate the profession in 2013, triggering petitions against a possible regulation from other professionals or consumers. After reviewing the regulatory framework and based on the existing rules on consumer protection, the Government decided not to introduce regulation of the profession. Tourist guides In 2016 the profession has been regulated by Ministerial decree by way of title protection and reserves of activities. However, a proper proportionality assessment of the qualification requirements and the reserved activities has not been submitted yet. The scope of the reserved activities is very wide, covering not only the provision of reliable, accurate and true information during the trips, but also escorting tourists from the airport to their hotel or escorting tourists for departure to the relevant airports, railway stations, bus and marine stations. In terms of education, although there are several routes to obtain qualification, the education comprises in general 5 years (master's degree) and a specific State exam, organised by the Ministry of Tourism. There is a general obligation to follow continuous professional development courses, but no specific requirements as regards the content, the duration and the sanctions foreseen. Mandatory registration in a State register is compulsory, but membership in a professional association remains voluntary. Additional requirements have not been identified.



CROATIA

_______________________ I. Overview On 1 November 2016 Croatia had submitted information about 261 regulated professions. Among those professions, 11,1% concern business services, 2,8% the construction sector and 0,6% the real estate sector. According to a recent EU wide survey , 31% of Croatian labour force can be considered as working in regulated professions. This is significantly higher than the EU average (21%). As indicated in chart 1, for legal and architectural activities business churn (or turnover) rate is higher in Croatia than in the EU on average. This may be interpreted as an indication of the relatively high dynamism and competition within regulated professions present in these sectors in Croatia. Business churn rate for accounting related activities is lower than in the EU on average which may indicate a relative lower dynamism in this sector.

Chart 1: Business churn rate in selected occupations, Croatia and the EU, 2013-14 (%) Croatia was not among the most active countries participating in the mutual evaluation exercise. On 10 October 2016, Croatia still needs to submit 12 % of the general information on different regulated professions and only 19 of the 274 professions have been analysed as to the proportionality of their regulation. The national action plan was submitted in the summer of 2016., It comprises a series of measures and actions to be carried out from 2016 to 2018 to facilitate access to and exercise of regulated professions in Croatia, in particular by reducing the number of regulated professions and by revising existing regulation in some specific sectors. In 2016, the European Commission addressed a country specific recommendation to Croatia in the area of regulated professions: Remove unjustified regulatory restrictions hampering access to and the practice of regulated professions. II. Situation concerning the analysed professions The level of restrictiveness is higher in Croatia compared to the EU weighted average except for the profession of patent agent where it is lower. Amongst the professions analysed, restrictiveness is highest for lawyers. Chart 2 presents the results of the quantification made by the Commission on the restrictiveness level in the selected professions. Chart 2: Restrictiveness indicator, 2016, Croatia and the EU Source: European Commission services Architects/Civil engineers ("certified" civil engineer) Both generic professions are covered by the same law and are regulated by reserves of activities and also by protecting the use of the title. The legislation exclusively reserves a number of activities for both profession, and it seems that they do not appear to be shared even between engineers and architects. Certified architects and certified engineers may perform design and/or professional construction supervision tasks as sole practitioners, in a joint-practice office or in a legal person registered for this activity. A contractor (a legal person or a natural person-craftsman) must have in its employment site engineer and/or works manager as the responsible person (a natural person of the architectural, civil engineering, mechanical engineering or electrical engineering profession) when carrying out the construction. It appears that the Croatian legislation provides different education requirements for the ones who want to use the official Croatian title (certified architect, certified engineer and indeed there are neighbouring professions with specific titles regulated in Croatia) and for the ones who intend to work without using the title. There are more detailed and heavier requirements for the ones who intend to obtain the title as well. Both professions require higher education training and professional experience (some modalities can be seen as traineeship) as well (it seems that the experience/traineeship requirement for architects is very heavy), but there are a few different pathways for obtaining the qualification. For the modality when professionals intend to use the title there is a compulsory state exam as well, afterwards the registration with the professional body is automatic (and implicitly compulsory). For the same modality, there is a general continuous professional development obligation in the Croatian legislation, but architects and engineers have a wide discretion on how they comply with this requirement. Membership in the Chamber and the right to use a professional title shall be acquired on the basis of a decision on the registration in the appropriate directory of members of the relevant Chamber. Regarding the joint exercise of the profession, the only limitation is that a company/individual professional who performs the "project management" cannot actually execute the project, to avoid conflict of interest. The indemnity insurance is compulsory for professionals, and a mutual recognition clause concerning insurances from other EEA Member States is in place. Accountants Croatia did not report on the regulation of chartered accountants, but regulates tax advisers, by way of reserves of activities. As exclusive reserves, tax advisers might provide tax advice, fill in tax applications, and they can also represent clients before administrative bodies/courts (shared with lawyers), and can monitor correctness of the accounts (shared with auditors).

As qualification requirement a diploma in economy or law is required (legislation seem to accept Bsc level qualifications) as well as minimum 5 years professional experience after the qualification was obtained. Once this experience is obtained, tax advisers still need to pass a state exam as well to be able to work independently. Accordingly, there is only this pathway to become a fully qualified tax adviser. Chamber membership is compulsory, and there is a monthly fee (without limitative nature) to pay. There is no continuous professional development obligation linked to the chamber membership. Licence is valid for the entire territory of Croatia. Tax advisers can practice as individual professionals, or provide services as a non-limited liability company (public society) composed by only tax advisers. The Croatian regulation of this profession is currently under reform concerning legal form and shareholding requirements, but the scope of reserved activities which is very wide doesn't seem to be addressed. The indemnity insurance is compulsory for professionals, and any evidence of insurance from other EEA Member States is accepted. Other authorisation requirements include good repute and proof of no previous bankruptcy, or the obligation to reside on the national territory. Lawyers Lawyers are regulated by reserves of activities and title protection. The three main reserves concern: giving legal advice (shared with law professors and to a certain extent tax advisers); representing clients in front of courts or authorities (shared to a certain extent with tax advisers); drafting various legal documents or actions (shared with notaries). The education requirement is a minimum higher education diploma, traineeship and passing a state examination. Following that, it is compulsory to register with the Croatian Bar Association. The Bar also runs a special register for established foreign attorneys providing services under their home titles. The registration is valid for the entire territory of Croatia, and there is no age restriction provided by the legislation. Lawyers need to follow the Code of Ethics, which provides an ethical obligation for continuous professional development (renew, expand and perfect their legal and general knowledge), however this obligation is by no means linked to the registration. Interesting to observe an existing provision in Croatian law according to which if a lawyer is not practising law for more than six months without a good reason, he/she might be deprived of the right to exercise the legal activity. Lawyers can only establish individual practices, joint legal offices or law firms (these can be public societies which are without limited liability, or limited liability companies). They cannot operate as any other legal persons. Shares have to be held by attorneys only. Those lawyers who have their individual practices can only establish one office in the territory of Croatia. There is a general ethical obligation on not performing activities which are incompatible with maintaining good reputation and/or independence of attorneys. Lawyers are required to obtain professional indemnity insurance, and the Croatian legislation also recognises insurances obtained in other Member States. Patent agents The profession is regulated by reserves of activities (representation before the Patent Office or other administrative authorities), but this activity is shared with lawyers. Patent agents need to follow (a) either a minimum bachelor level higher education training in a number of technical natural sciences, and pass a state exam; (b) other higher university studies, followed by a minimum 5 years work experience in the field of industrial property and afterwards completion of a state exam; or (c) be a lawyer enrolled with the Bar and pass the specific state exam. The agents need to be members of the Chamber in order to be able to carry out their activities. The registration is valid for the entire territory of Croatia. There is neither continuous professional development requirement, nor obligatory insurance mentioned in the Croatian legislation. As regards potential company forms the Croatian legislation is quite flexible: activities of patent agents might be carried out by sole professionals, or by a legal person which employs at least one patent agent. Real estate agents Real estate agents are regulated by reserves of activities but all the reserves (establishing/facilitating contacts and negotiations, obtaining information on properties, displaying properties) might be shared with lawyers. In the field of real estate representation, the two roles are the role of the agent (always a natural person), and that of the intermediary, which can be a company, individual merchant or individual craftsman. Real estate agents only need to pass a professional exam, the entry requirement of this is to have a high school qualification (final exam), there is no traineeship or professional exam requirement. There is a state register of real estate agents who passed the above professional exam. There is no continuous professional development obligation for this profession. As regards insurance requirement, it is important to observe that the legal persons need to be insured, but there is no similar requirement for the natural person professionals. As regards legal persons (when we are talking about intermediaries), the requirement is to employ at least one qualified and licensed professional. Otherwise, the Croatian regulation of this profession is fully liberal concerning shareholding requirements, voting rights, restrictions on corporate forms or on the joint exercise of the profession. Tourist guides Croatia exclusively reserves some activities (accompanying and guiding tourists on cruises and sightseeing tours) of tourist guides for qualified professionals. The law also specifically provides that expert guide services at a museum, gallery, protected natural area, archaeological site etc. are not to be considered as activities of tourist guides.

There is no specific training requirement enshrined in the legislation: following a high school degree (final exam) candidates need to pass a specific examination. The tourist guide certification exam shall be conducted before and consists of a general part, that is unique for all the candidates and a special part which relates to tourist sites (localities) in a specific region / county. Successful candidates are then put on a register. Tourist guides may therefore provide services in the area of tourist sites (localities) and in other parts of the Republic of Croatia which are not designated as tourist sites (localities) if they have passed the general part of the certification exam for tourist guide and the special parts of the certification exam which relates to tourist sites (localities). As a result, tourist guides are currently limited by territorial restrictions as they are only allowed to provide services in the county where they have passed the professional exams. Given that national tourist guides are disadvantaged in relation to providers from other Member States who can provide tourist guide services occasionally or temporarily anywhere in the territory of Croatia, it has been announced that the relevant act should be amended in order to abolish those territorial restrictions. There is no continuous professional development obligation for this profession. As regards potential company forms the legislation is quite flexible: activities of tourist guides might be carried out by sole professionals, or by a company (tourist agency). In the latter case the agency needs to be insured, but not the individual professional.



CYPRUS

___________________________ I. Overview On 1 November 2016 Cyprus had submitted information about 114 regulated professions. Among those professions, 16,7% concern business services, 4,4% the construction sector and 0,4% the real estate sector. According to a recent EU wide survey , 19% of Cyprus’ labour force can be considered as working in regulated professions. This is lower than the EU average (21%). As indicated in chart 1, for accounting, legal and architectural activities business churn (or turnover) rate is lower in Cyprus than in the EU on average as well as compared to the average for the total Cypriot economy. This may be interpreted as an indication of the relatively low dynamism and competition within regulated professions present in these sectors in Cyprus. Chart 1: Business churn rate in selected occupations, Cyprus and the EU, 2013-14 (%) Cyprus was not active in the mutual evaluation exercise. On 10 October 2016, it had submitted 70% of the general information regarding its regulated professions, but has only provided 15% of the proportionality assessment of the rules regulating professions. On the other hand Cyprus has been subjected to an MoU by the troika, and a review and opening of their regulated professions has been on the agenda for a number of years, with varying success. Cyprus has not submitted any national action plan. II. Situation concerning the analysed professions The level of restrictiveness is higher in Cyprus compared to the EU weighted average for the professions of tourist guide, real estate agent, patent agent and civil engineers and to a lesser extent for lawyer and architect. Amongst the professions analysed, restrictiveness is highest for lawyers and patent agents. Chart 2 presents the results of the quantification made by the Commission on the restrictiveness level in the selected professions. Chart 2: Restrictiveness indicator, 2016, Cyprus and the EU

Source: European Commission services Architects Cyprus regulates the profession of architect by way of reserve of activities and protection of title. The reserves of activities to architects and their nature as exclusive or shared ones derive from a number of legal provisions which include those dealing with construction and similar requirements. A number of activities are shared with other engineers while architects have the exclusive right to sign plans to be submitted to the authorities for the issuance of building permits and to the extent they relate to architectural work. Access to the profession is open to persons with (a) a 4 years of University (or equivalent) studies, or 6 years' University (or equivalent) studies, 3 years of which should be full-time, and (b) a post-diploma 1-year practical training in architecture. Registration to the Technical Chamber of Cyprus is also necessary. Architects may form general and limited liability partnerships, and private limited liability companies. Public limited liability companies and other company forms are not allowed. Shareholding of these companies should be held in their entirety by members of the Chamber of Engineers (ETEK). Recently a new law allowed for natural and legal persons already legally established in another Member State to be able to become shareholders in Cypriot companies just by proving that they are legally established in their Member State of origin, without imposing any condition for registration with ETEK. The new law also allowed for legal persons already established in another Member State to establish in Cyprus by setting up a branch or an agency, with no shareholding requirements imposed based on the Cypriot law. Cyprus provides for a specific regime of qualifications and registration for professionals (including architects) and companies allowed to undertake public works' contracts. Public works are classified in categories on the basis of a number of criteria. In parallel, both professionals and companies are put in corresponding categories which allows them to undertake relevant works. Civil engineers Cyprus regulates the profession of civil engineering by way of reserve of activities and protection of title. The reserves of activities to civil engineers and their nature as exclusive or shared ones derive from a number of legal provisions which include those dealing with construction and similar requirements. A number of activities are shared with other engineers and architects. All plans that are submitted to the authorities for the issuance of a building permit and relate to civil engineering work need to be submitted and signed exclusively by a licenced civil engineer. Access to the profession is open to persons holding (a) a University diploma (or equivalent) which should allow the holder to exercise the profession in the country delivering the diploma, and after (b) completion of a 1-year post-diploma practical training. Registration to the Technical Chamber of Cyprus is also necessary. Engineers may form general and limited liability partnerships, and private limited liability companies. Public limited liability companies and other company forms are not allowed. Shareholding of these companies should be held in their entirety by members of the Chamber of Engineers (ETEK). Recently a new law allowed for natural and legal persons already legally established in another Member State to be able to become shareholders in Cypriot companies just by proving that they are legally established in their Member State of origin, without imposing any condition for registration with ETEK. The new law also allowed for legal persons already established in another Member State to establish in Cyprus by setting up a branch or an agency, with no shareholding requirements imposed based on the Cypriot law. Cyprus provides for a specific regime of qualifications and registration for professionals (including civil engineers) and companies allowed to undertake public works' contracts. Public works are classified in categories on the basis of a number of criteria. In parallel, both professionals and companies are put in corresponding categories which allows them to undertake relevant works. Accountants Cyprus regulates the profession of Certified Public Accountant and Registered Auditor. On the contrary, it does not appear that the profession of Accountant is regulated. Membership of Accountants with ICPAC (the Institute of Certified Public Accountants of Cyprus) does not appear to be obligatory for the exercise of the profession of accountant (as opposed to registered auditors). Nonetheless, the practical effect of the conditions for, the effects and the consequences of the award of the title "Certified Public Accountant" by ICPAC to its members needs to be better understood. No restrictions have been identified on corporate forms, shareholdings/voting rights or regarding the joint exercise of professions. Lawyers The legal profession is regulated by way of a protected title and a number of reserves of activities, some of which are exclusive and the others are shared. Representing clients in court and the provision of legal advice are the most prominent reserved ones. The education requirement is 4 years of legal training and a supervised traineeship of

18 months. A state exam needs to be passed before appointment.

Lawyers have to register with the Bar Association to get an authorisation to practice, and they also have to demonstrate a clean criminal record and take an oath. There is also a "habitual residence" requirement, established in the law. The habitual residence requirement does not however seem to cover EU lawyers which are established in Cyprus under their home country title. There is no obligation to collect continuous professional development points per year. Lawyers can either work independently, as sole practitioners, in a partnership with other lawyers or in law firms. Law firms may choose between a number of legal forms, namely partnerships, limited partnerships, and private limited companies. All partners or shareholders of law firms have to be lawyers and any transfer of shares in a limited company need to be communicated and approved by the Bar. Partnerships and limited partnerships of lawyers may be shareholders in a law firm which has the form of a private limited company. Cypriot law contains an obligation for lawyers to have professional liability insurance, the minimum level and conditions of which are set by decision of the Bar. Patent agents The profession of patent agent is not regulated in Cyprus. However, the law on lawyers reserves the submission of patents and trademarks to lawyers who also have the right to provide legal advice, including on issues relating to patents and trade mark law. In that respect, the conditions for accessing and for exercising the activities which correspond to those of a patent agent, are those that apply to lawyers. The assessment therefore of the regulatory regime applicable to patent agents should be the one applicable to lawyers. Real estate agents The profession of real estate agent is a regulated profession. A licence is required and regulation takes the form of a protection of title and, in some way, of reserved activities. In essence, while the involvement of a real estate agent is not necessary for the conclusion of real property transactions, if a professional is involved in a real estate transaction, it has to be a licensed real estate agent. In addition, all contracts for the provision of real estate agency services entered into by non-licenced agents are void. These specific activities of real estate agents do not appear to be shared with other professions. Obtaining a licence is dependent upon specific qualifications and training which amount to a minimum of 4 years. Training needs to be of a post-secondary nature of a period of at least 3 years at a University or equivalent level and should be on issues having a relevance to the profession. Subsequent professional training of 12 months is also required and takes the form of work as assistant real estate agent. Legal persons can offer real estate services and they need to be licensed. The law provides that the legal persons may take the form of general partnerships, limited partnerships and SRLs while limited company by shares are not included in that list. There are no specific shareholding requirements but the legal persons need to employ a licenced real estate agent as the person responsible to ensure compliance with professional obligations (that person is described as Director in the relevant licence application form). Tourist guides Tourist guides are a regulated profession. The exercise of the profession without a licence is a criminal offence (a register of licensed tourist guide is kept at the Cyprus tourist Organisation). Tourist guides need to have a diploma of a tourist Guide school (or equivalent) or to have exercised the profession in another Member State; knowledge of Cyprian history, art, archaeological and historic places, the natural environment and the current affairs of Cyprus; a very good knowledge of Greek and at least of another foreign language. Tourist guides enjoy exclusive activities. Tourist Offices may not employ non-registered tourist guides for excursions, sightseeing tours or simply customer guiding. In addition, Tourist Offices are obliged to place a licenced tourist guide to each sightseeing tour, with some exceptions (e.g., tours which do not comprise archaeological sites, museums, etc., and walking, cycling, motorbike and riding tours).



CZECH REPULIC

_______________________ I. Overview On 1 November 2016 the Czech Republic had submitted information about 366 regulated professions. Among those professions, 18,6% concern business services, 5,2% the construction sector and 0,3% the real estate sector. According to a recent EU wide survey , 25% of the Czech labour force can be considered as working in regulated professions. This is slightly higher than the EU average (21%). As indicated in chart 1, for accounting, legal, architectural and travel agency related activities business churn (or turnover) rate is lower in the Czech Republic than in the EU on average as well as compared to the average for the total Czech economy. This may be interpreted as an indication of the relatively low dynamism and competition within regulated professions present in these sectors in the Czech Republic. Chart 1: Business churn rate in selected occupations, Czech Republic and the EU, 2013-14 (%)

The Czech Republic has been participating very actively in the mutual evaluation exercise. On 10 October 2016, the Czech Republic has submitted almost all of the general information on different regulated professions and all professions have been assessed as to the proportionality of their regulation. In its national action plan, the Czech Republic presents an overview of the regulatory framework of the regulated professions, but only announces changes for a limited number of professions. In most cases reforms have been designed to reduce the overall administrative burden. The Czech Republic also announces the forthcoming regulation of additional professions, such as tourist guides and real estate agents. II. Situation concerning the analysed professions The level of restrictiveness is higher in the Czech Republic compared to the EU weighted average for the professions of architect, civil engineer and lawyer. It is lower than the EU average for the professions of accountant and patent agent. Amongst the professions analysed, restrictiveness is highest for lawyers. Chart 2 presents the results of the quantification made by the Commission on the restrictiveness level in the selected professions. Chart 2: Restrictiveness indicator, 2016, Czech Republic and the EU Source: European Commission services Architects/Engineers Both professions are regulated by reserved activities and protected title. The activities, reserved to chartered architects are described as follows: preparation of land-use planning documents including land-use planning data documents, preparation of design documents of buildings, preparation of design documents of garden and landscape arrangement and treatment including relevant land-use planning data documents and a relevant parts of land-use planning documents, participation in preparation of design documents of engineering structures, conduct of building and architectural or urban surveys, issuance of expert statements, preparation of documents and opinions for partial environmental impact assessment of a building, preparation of design documents for interior decoration of buildings, execution of supervision of building implementation, management and implementation of a simple building, conduct of geodesic measuring for designing activity and alignment works, acting on behalf of a developer, performance of professional functions in the sections of land-use planning or Building Code at state administration authorities. While architectural design and planning is only shared with engineers, the rest of the activities is shared with both engineers and chartered technicians. Chartered engineers are entitled, within scope of granted authorisation, to pursue following activities: to prepare project documentation of constructions (including appropriate territorial planning supporting documentation) excluding ground constructions (determined as important from the architectural or urbanism point of view, this exception shall not have effect on conclusion of binding relations according to generally valid legal regulations; to take part in preparation of project documentation for ground constructions determined as important from the architectural or urbanism point of view and which is being prepared by a chartered architect, to prepare supporting documentation for territorial planning and relevant parts of the territorial planning documentation, to perform statics and dynamics calculations of structures, to perform building-technical or engineering surveys, to perform testing and diagnostics of structures, unless stated otherwise in a special regulation, to issue expert opinions; to process documentation and reviews, for partial impact assessment of the construction on the environment and also for the purposes of proceeding before state bodies, to manage implementation of construction on the construction site, to conduct of geodesic measuring for designing activity and alignment works, unless stated otherwise by a special regulation, to provide author or technical supervision over the implementation of a construction, to act on behalf a builder before administrative proceedings, to pursue professional functions in the area of territorial planning or construction code in the bodies of state administration, unless stated otherwise by a special regulation. In terms of qualification for architects 5 years of education (Master's degree) and 3 years of mandatory practice are required (8 years in total). To qualify as a chartered engineer 4 years’ Bachelor’s degree with 5 years’ mandatory practice or Master's degree with 3 years of mandatory practice are required. For both professions there is a general obligation to follow continuous professional development courses. Membership is compulsory in the two professional chambers monitoring professional practice, namely the Czech Chamber of Architects (CKA) and the Czech Chamber of Chartered Engineers and Technicians Active in Construction (CKAIT). As regards incompatibility, there is a general obligation to avoid conflict of interests. It appears that for both professions there are certain restrictions on the corporate form/type of entity to be used to exercise related activities, as well as shareholding requirements. According to the relevant provisions regulating legal form (Act. no. 360/1992 Coll.) authorised persons (i.e. certified architects, certified engineers and certified technicians) are allowed to carry out their activities in a limited liability company, where authorised persons shall represent majority both among partners and executives in such a company; should a concerned company have only one partner or executive, he/she shall be only an authorised person. Professional indemnity insurance is mandatory for both architects and engineers. No other authorisation requirements have been reported.

Accountants The Czech Republic regulates two professions in the sector by way of reserved activities: daňový poradce (tax adviser) and Činnost účetních poradců, vedení účetnictví, vedení daňové evidence (accountant). The scope of the reserved activities for tax advisers is defined as follows: providing legal assistance and economic advice in financial matters, taxes, levies, fees and other payments, as well as in matters directly related to taxes (especially the processing of tax returns and representation before tax authorities, if necessary). Tax advisers may also represent clients in judicial proceedings in tax matters and prepare opinions. While representation and assistance before tax authorities as well as representation in court and tax advice are shared with lawyers, payroll activities, book-keeping and drawing up annual financial statements and consolidated financial statements are shared with accountants. Accountants provide advice concerning bookkeeping and tax accounting; prepare financial statements and consolidated financial statements, annual reports and consolidated annual reports. The activity is regulated when exercised in a self-employed capacity or as a company. The legal entities must appoint a person who meets the qualification requirements. For salaried employees, qualification is not required. Whereas for a tax adviser there is a qualification requirement of 3 years of university education and a state exam, the training for accountants takes approximately 5 years (general secondary education with a school-leaving examination and 5 years' professional experience, accredited requalification course and 5 years' professional experience or university education and 3 years' professional experience). For the profession of tax advisers registration in a chamber is compulsory and professional liability insurance is mandatory. No such conditions exist for accountants. Additional requirements have not been reported. Lawyers The legal profession of advocate is regulated by way of reserved activities and protected title. The core of the activities, reserved to the legal profession, consist in representing clients in criminal cases, in proceedings before Constitutional Court, the Supreme Court and the Supreme Administrative Court. However, the Czech Republic also indicates as reserved activities the following: drawing up legal documents (shared with patent attorneys), legal advice - including in tax matters and representation before administrative authorities (shared with patent attorney and tax adviser) and other forms of legal aid where these are provided on a permanent basis and for a fee (e.g. public procurement administration). It is however unclear whether general legal advice is reserved to lawyers. The qualification required to practise the profession is a University degree in law, followed by a professional training for a minimum of three years and a Bar examination. Advocates must be registered with the Czech Bar Association. An advocate may practise the legal profession as a sole practitioner or jointly with other lawyers as a member of a consortium, or a member of a company. Salaried practice is also allowed. The incompatibility rule appears to be wide: according to the law, a lawyer may not "have another profession nor conduct any other activity incompatible with the profession of a lawyer". Multidisciplinary restrictions are also foreseen, since lawyers cannot team-up with other professions within the same company. Only lawyers may hold shares in law firms. Professional liability insurance is compulsory. The National Action Plan indicates that it was examined whether the requirements under the Czech national legal system are non-discriminatory on the basis of nationality or residence and proportionate. The conclusion was that all requirements under the Czech legal system should be maintained. Patent agents The profession is regulated by way of reserved activities. All activities, reserved to patent agents, namely: providing expert advice to natural persons and legal entities in matters relating to industrial property, representation before public bodies and in proceedings before courts, as well as other services related with protection of industrial property, are shared with lawyers. The qualification requirement includes a bachelor's degree with at least 3 years’ professional experience in the field of intellectual property. In addition, the candidate has to pass a professional examination at the Industrial Property Office and register to the Chamber of Patent Attorneys.

Professional indemnity insurance is compulsory. Additional requirements, restricting the access to the profession have not been identified. The National Action Plan indicates that following the assessment within the transparency exercise for regulated profession of patent attorney, the competent authorities concluded that the regulation and qualification requirements are non-discriminatory and proportional and the current system should be maintained. Real estate agents The profession is not regulated. Real estate activities are considered as trade and applicants are only obliged to comply with the general rules set by the Trade Licensing Act (legal capacity and integrity/good repute). The Association of Real Estate Offices has a system of self-regulation and in order to be a member one must obtain a certificate according to ISO and CEN standard. However, the Czech national action plan announced the upcoming regulation of the profession to ensure a higher level of consumer protection. The Czech Republic considers that the absence of regulation for this profession has led to unprofessionalism and unfair activities which harm consumers as well as those real estate agents who are fair and competent. The currently low degree of regulation is inadequate because it does not protect consumers from unprofessionalism and unfair and even criminal activities, and contributes to atmosphere of distrust of real estate agents. This opinion also corresponds to results of a survey, according to which both consumers and real estate agents themselves ask for regulation of this profession. According to a survey, 81% of the consumers and 76% of the real estate agents think that it is necessary to set up rules for performing the real estate activities. The new rules are expected to specify the conditions for pursuing the profession of real estate agent. The draft bill foresees the introduction of a mandatory professional qualification (for instance completion of secondary education and 3 years of relevant experience). The real estate agents will also need to be covered by mandatory liability insurance and be subject to some information obligations. There is an intention to create a publicly accessible electronic database of all natural persons having the required qualifications. The bill was submitted to the Government in August 2016. Tourist guides The profession is no longer regulated since 2008. Previously, national rules required the possession of professional qualification and linguistic skills. Now to obtain the trade licence for tourist guide, the applicant only needs to meet general conditions, set by the Trade Licensing Act (legal capacity and integrity/good repute). According to the Czech Republic, the liberalisation of the profession lead to a number of complaints received by the professional association from consumers related to poor quality services being provided by persons who indicated to be tourist guides and that often a receipt on the provision of service has not been given to the consumers. The competent supervision authorities claim that it is difficult to identify unlawful service providers as there can be thousands of trade licence holders. The authorities stress that the liberalisation had negative impact on the number of issued trade licences, whereas at the same time the illegal business in the provision of tourist guide services increased and the service quality and competitiveness of tourist guides declined. The Ministry of Regional Development cooperates with the selected professional associations in tourism, one of them being the Czech Tourist Guide Association. The Ministry of Regional Development is currently preparing new legislation in order to regulate the profession, most probably by way of "protected title".



DENMARK

_______________________ I. Overview On 1 November 2016 Denmark had submitted information about 161 regulated professions. Among those professions, 14,9% concern business services, 11,2% the construction sector and 0,6% the real estate sector. According to a recent EU wide survey , 14% of Danish labour force can be considered as working in regulated professions. This is lower than the EU average (21%). As indicated in chart 1, for all the professions selected, business churn (or turnover) rate is higher in Denmark than in the EU on average. This may be interpreted as an indication of the relatively high dynamism and competition within regulated professions present in these sectors in Denmark. Chart 1: Business churn rate in selected occupations, Denmark and the EU, 2013-14 (%)

Denmark has actively participated in the mutual evaluation exercise. It has setup an inter-ministerial taskforce in charge of reviewing all regulated professions and come with proposals for simplifying complex regulation or removing them where unnecessary. On

6 October 2016, Denmark still needed to submit 3 g