4.

The second paragraph of Article 52 of the EEC Treaty provides that: ‘Freedom of establishment shall include the right to ... set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article 58, under the conditions laid down for its own nationals by the law of the country where such establishment is effected ... ’. The first paragraph of Article 52 extends the removal of restrictions on the freedom of establishment of nationals of one Member State in the territory of another Member State ‘to restrictions on the setting up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State’. That provision must be read in conjunction with Article 58 of the Treaty, according to which : ‘companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Community shall, for the purposes of this Chapter, be treated in the same way as natural persons who are nationals of Member States’. The fundamental principle of equal treatment of nationals of the Member States, which is thus guaranteed by Article 52 after the expiry of the transitional period and independently of the directives provided for in Articles 54 and 57 for its implementation (see Case 2/74 Reyners [1974] ECR 631, paragraphs 24 to 30 of the decision), therefore applies not only to natural persons but also to companies, provided that they fulfil the two cumulative conditions laid down in the first paragraph of Article 58, namely that they must be formed in accordance with the law and that they must have the requisite connection with one of the Member States. Freedom of establishment therefore consists of the right for any national of a Member State to establish, even on an ancillary basis, a company in another Member State under the conditions which its law imposes on its nationals (second paragraph of Article 52) and the right for a company to conduct its businesss in another Member State through an agency, branch or a subsidiary (first paragraph of Article 52). On that last point the Court, in its judgment of 28 January 1986 in Case 270/83 (Commission v France [1986] ECR 273) concerning the refusal of France to grant tax exemption to French branches and agencies of insurance companies whose registered office is in another Member State, stated in the following terms the extent to which companies are treated as natural persons for the purposes of Article 58 of the Treaty: ‘With regard to companies, it should be noted in this context that it is their registered office in the ... sense (of Article 58) that serves as the connecting factor with the legal system of a particular State, like nationality in the case of natural persons’. The Court concluded that: ‘Acceptance of the proposition that the Member State in which a company seeks to establish itself may freely apply to it a different treatment solely by reason of the fact that its registered office is situated in another Member State would ... deprive that provision of all meaning’ (Case 270/83, paragraph 18 of the decision). As I have just stated, the fact that the registered office of Mr Seger's company is in London is the sole basis for the rejection of his application. From that point of view the rejection must therefore be regarded as discriminatory. But that is not all. In addition to that first finding of principle, another conclusion is to be drawn from the facts of the case. There is no danger that such a difference of treatment in the application of social security provisions may have the effect of dissuading a national already established in the Netherlands, irrespective of his nationality, from setting up a company abroad or from becoming a majority shareholder in such a company. Seen in that light, it is the right of natural persons guaranteed by the second paragraph of Article 52 of the EEC Treaty to set up and manage companies in another Member State which would ultimately be deprived of any meaning. From that point of view again, the difference in the application of social security provisions which the Association seeks to establish appears to constitute an obstacle to the exercise of the right of establishment of Community nationals residing in the Netherlands inasmuch as it withdraws from the companies run by such persons the entitlement to equal treatment with national companies accorded to companies whose directors have maintained their registered office in the territory of that State.