Proposal for a COUNCIL REGULATION on the Statute for a European Foundation (FE)
Date: 2012-02-08
Institutions: European Commission
Subjects: European legal status, foundation, operation of the Institutions, single market, social economy

EUROPEAN COMMISSION 

Brussels, 8.2.2012  
COM(2012) 35 final 

2012/0022 (APP) 

Proposal for a 

COUNCIL REGULATION 

on the Statute for a European Foundation (FE) 

(Text with EEA relevance) 

{SWD(2012) 1 final} 
{SWD(2012) 2 final} 

 
 
  
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

1.1. General context 

Foundations  play  an  important  role  in  the  EU,  particularly  in  civil  society.  Through  their 
various activities in numerous areas, they contribute to the fundamental values and objectives 
of the Union, such as respect for human rights, the protection of minorities, employment and 
social progress, protection and improvement of the environment or the promotion of scientific 
and technological advances. In this context, they make a substantial contribution to achieving 
the  ambitious  goals  of  smart,  sustainable  and  inclusive  growth  set  by  the  Europe  2020 
strategy1.  They  also  enhance  and  facilitate  a  more  active  involvement  of  citizens  and  civil 
society  in  the  European  project.  Nonetheless,  the  exercise  of  their  activities  encounters 
various obstacles across the EU. 

The Single Market Act Communication2 adopted in April 2011 highlighted the need to put an 
end  to  market  fragmentation  and  to  eliminate  barriers  and  obstacles  to  the  movement  of 
services, innovation and creativity in order to deliver growth and employment, and promote 
competitiveness. It stressed the importance of strengthening citizens' confidence in the single 
market  and  of  ensuring  that  its  benefits  are  passed  on  to  citizens.  In  the  context  of 
foundations'  contribution  to  the  social  economy  and  to  financing  innovative  initiatives  of 
public benefit, the Single Market Act called for action to remove obstacles that foundations 
face  in  operating  on  a  cross-border  basis.  The  same  call  was  made  in  the  EU  Citizenship 
report 2010 "Dismantling the obstacles to EU citizens' rights"3, which stressed the importance 
of enhancing the European dimension of the activities of public benefit purpose foundations 
with a view to promoting citizen action at EU level.  

The  Commission  also  underlined  the  importance  of  developing  European  legal  forms  for 
entities in the social economy sector (e.g. foundations, cooperatives or mutuals) in its "Social 
Business Initiative" (SBI) Communication of 25 October 20114. The SBI aims to support the 
development  of  businesses  which  primarily  focus  on  creating  social  impact  through  their 
activities  and  its  actions  also  address  and  benefit  those  social  economy  entities  (including 
foundations)  that  meet  the  general  criteria  for  a  "social  business"  set  out  in  the 
Communication.  

The European Parliament called for an appropriate legal framework for foundations (as well 
as  for  mutual  societies  and  associations)  in  its  resolution  responding  to  the  Commission’s 
Single  Market  Act;  it  argued  in  favour  of  introducing  Statutes  for  these  legal  entities  in  its 
written declaration 84/2010 of March 2011; and it urged the Commission to work towards this 
objective in its previous resolutions of 2009 and 20065. The European Economic and Social 

1 
2 
3 
4 
5 

COM(2010) 2020. 
COM(2011) 206.  
COM(2010) 603. 
COM(2011) 682. 
EP resolution of 6 April 2011 on a Single Market for Europeans (2010/2278(INI)); written declaration 
resolution  of  19  February  2009  on  Social  Economy 
84/2010,  P7_DCL(2010)0084;  EP 
(2008/2250(INI)); and EP resolution of 4 July 2006 on recent developments and prospects in relation to 
company law (2006/2051(INI)). 

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Committee  advocated  a  Statute  in  its  2010  own  initiative  opinion6,  which  set  out  its 
reflections  on  how  such  a  Statute  should  be  developed,  and  the  Committee  of  the  Regions 
supported  the  Commission’s  announcement  of  the  initiative  on  foundations  in  the  Single 
Market Act7.  

1.2. Grounds for and objectives of the proposal 

Foundations  cannot  channel  funds  efficiently  on a  cross-border  basis  in  the  EU.  When  they 
decide to operate across borders, foundations have to spend part of the resources they collect 
on legal advice and fulfilling legal and administrative requirements laid down by the different 
national laws. 

The  present  initiative  creates  a  new  European  legal  form  intended  to  facilitate  foundations' 
establishment and operation in the single market. It will allow foundations to more efficiently 
channel private  funds to public benefit purposes on a cross-border basis in the EU. This, in 
turn, should result – for instance, due to lower costs for foundations – in more funding being 
available for public benefit purpose activities and therefore, should have a positive impact on 
European citizens' public good and the EU economy as a whole.  

This  proposal  does  not  aim  to  deal  with  the  particular  situation  of  political  foundations 
affilated to political parties at European level. These foundations have been subject to specific 
rules under EU law since 2007, in particular as regards their access to EU funding (together 
with political parties at European level)8. The Commission is currently reviewing these rules 
and will adopt a legislative proposal amending them in the course of 20129. 

2. 

RESULTS  OF  CONSULTATIONS  WITH  INTERESTED  PARTIES  AND 
IMPACT ASSESSMENT 

In  preparing  the  current  proposal  the  Commission  relied  widely  on  external  expertise  and 
engaged comprehensively with different stakeholders.  

First,  a  feasibility  study  —  by  a  Consortium  consisting  of  the  Max  Planck  Institute  for 
Comparative  and  International  Private  Law  in  Hamburg  and  the  University  of  Heidelberg 
(Centre for Social Investment)10 — was carried out and published in 2008; it suggested that a 
Statute  for  a  European  Foundation  (with  or  without  addressing  tax  issues)  would  be  the 
preferable policy option to address the problems identified. 

Secondly,  the  Commission  held,  between  February  and  May  2009,  a  public  consultation  on 
the recommendations of the feasibility study. While foundations expressed strong support for 
the  Statute,  national  authorities  and,  to  some  extent,  business  organisations  were  more 
sceptical as to the need for and feasibility of such a legal form. A more general consultation 
on  the  Communication  ‘Towards  the  Single  Market  Act’  in  2010-2011  also  showed  strong 
interest in the Statute from the non-profit sector. 

6 
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8 

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INT/498 - CESE 634/2010 - April 2010. 
CdR 330/2010 fin.  
See Regulation (EC) No 1524/2007 on the regulations governing political parties at European level and 
the rules governing their funding of 18.12.07 amending Regulation (EC) 2004/2003 of 04.11.03. 
Commission work programme for 2012, Item n.76. 
See  http://ec.europa.eu/internal_market/company/docs/eufoundation/feasibilitystudy_en.pdf,  hereafter 
the ‘feasibility study’. 

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In  addition,  the  Commission  gathered  further  information  about  concrete  problems 
encountered through bilateral discussions with foundations, in particular during the ‘European 
Foundation  Week’  in  June  2010  and  via  contacts  with  the  European  Foundation  Centre 
(EFC). 

The Commission also collected information on the relevant national legislation from national 
authorities  through  a  questionnaire  and  subsequent  discussions  within  the  Company  Law 
Expert Group (CLEG)11 in 2009, 2010 and 2011. Many Member States expressed reservations 
as to the need for new European legal forms, including for foundations.  

The  Commission  took  the  above  comments  and  concerns  into  account  when  drafting  the 
proposal by basing itself on an analysis of foundations' needs and of national legal systems, 
and  by  opting  for  solutions  (e.g.  in  terms  of  the  scope  of  the  initiative)  on  which  a 
compromise might be more easily reached given the diversity of national laws. 

The impact assessment has been built upon the data gathered as mentioned above. The overall 
problem  identified  was  the  fact  that  the  variety  of  national  civil  and  tax  rules  made 
foundations'  cross-border  operations  costly  and  cumbersome  and  that,  as  a  result,  the  cross-
border channelling of funds to public benefit purposes through foundations was largely under-
exploited. The more specific problems identified included uncertainty about recognition as a 
public  benefit  purpose  foundation  in  other  Member  States,  the  costs  of  pooling  and 
distributing funds on a cross-border basis, and limited cross-border donations. 

The  following  options  have  been  considered:  (1)  no  new  policy  action  at  EU  level;  (2)  an 
information campaign and a voluntary quality charter; (3) a Statute for a European Foundation 
(with or without addressing tax issues); and (4) limited harmonisation of laws on foundations.  

The no policy action  option would rely on  ongoing initiatives, including infringement  cases 
and  work  in  the  tax  area,  ensuring  completeness  of  the  implementation  of  the  Services 
Directive, non-legislative initiatives in the area of research, and foundation sector initiatives 
to support cross-border giving. 

The  information  campaign  option  would  seek  to  improve  foundations’  knowledge  of  their 
rights and obligations under national laws when operating on a cross-border basis. In addition, 
a  quality  charter,  to  be  drawn  up  by  foundations  on  a  voluntary  basis,  and  an  associated 
"European  quality  label"  that  foundations  complying  with  the  charter  could  be  awarded, 
would aim to ensure the quality and trustworthiness of foundations' activities. 

The option of the Statute for a European Foundation without addressing tax issues proposes 
an alternative legal form for foundations; it would not call for changes to the existing forms of 
national  foundations  and  its  use  would  be  voluntary.  The  Statute  would  lay  down  certain 
requirements (e.g. minimum founding assets, public benefit purposes as agreed in most of the 
Member States) in order to become a European Foundation.  

The option of the Statute for a European Foundation addressing tax issues would, in addition, 
require  Member  States  to  regard  a  European  Foundation  as  equivalent  to  domestic  public 
benefit purpose foundations, and therefore grant it the same tax benefits that are provided to 

11 

CLEG brings together company law experts from national administrations and meets three times a year, 
under the chairmanship of DG Internal Market and Services. 

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those  domestic  foundations.  The  same  solution  would  apply  with  respect  to  donors  to  and 
beneficiaries of the European Foundation.  

Limited  harmonisation  of  laws  on  foundations  would  mean  harmonising  those  requirements 
that  foundations  need  to  meet  to  be  able  to  register  and  operate  abroad,  i.e.  the  acceptable 
purposes  of  a  public  benefit  purpose  foundation,  minimum  assets,  registration  requirements 
and  some  aspects  of  internal  governance.  Member  States  would  have  to  allow  foundations 
fulfilling  harmonised  criteria  to  operate  in  their  country  without  imposing  any  additional 
requirements.  The  options  of  more  extensive harmonisation of national laws on foundations 
and harmonisation of the tax treatment of foundations and their donors were also considered. 

The analysis of the impacts of the options proposed showed that the Statute for a European 
Foundation  with  automatically  applied  non-discriminatory  tax  treatment  would  be  the  most 
appropriate  option,  removing  cross-border  obstacles  for  foundations  and  donors  and 
facilitating the efficient channelling of funds for public benefit purposes. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

3.1. 

Legal basis  

The  legal  basis  for  the  proposed  Regulation  on  the  Statute  for  a  European  Foundation  is 
Article 352 TFEU, which provides the appropriate legal basis when no other provision in the 
Treaty gives the necessary powers to the EU institutions to adopt a measure.  

Article  352  is  the  legal  basis  chosen  for  the  existing  European  legal  forms  in  the  field  of 
company law, i.e. the European Company, the European Economic Interest Grouping and the 
European Cooperative Society. The European Court of Justice confirmed in its judgment12 on 
the European Cooperative Society that Article 352 was the correct legal basis.  

3.2. 

Subsidiarity and proportionality 

The proposed action fully complies with the principle of subsidiarity. EU action is needed in 
order  to  remove  the  current  national  barriers  and  restrictions  encountered  by  foundations 
when  operating  across  the  EU.  The  current  situation  demonstrates  that  the  problem  is  not 
properly  addressed  at  national  level  and  that  its  cross-border  character  requires  a  common 
framework to enhance foundations' mobility. Action by Member States alone would not allow 
the single market to deliver optimum results for EU citizens. This initiative gives foundations 
the option to choose the proposed European legal form and have their cross-border activities 
facilitated.  

The  proposed  action  would  be  suitable  and  would  not  go  beyond  what  is  necessary  to 
satisfactorily achieve the objectives that have been set, therefore complying with the principle 
of  proportionality.  It  aims  to  create  a  new  legal  form  in  addition  to  the  national  forms, 
leaving unchanged the different national laws already in existence. It would leave the Member 
States the choice and scope to uphold and develop their national legal forms. Moreover, as far 
as  taxation  is  concerned,  it  would  not  replace  Member  States'  laws  on  the  tax  treatment  of 
public benefit purpose foundations (and their donors) with a new set of harmonised rules but 
would  just  render  those  existing  rules  automatically  applicable  to  the  European  Foundation 
(and  its  donors).  The  proposed  action  would  tackle  the  most  significant  obstacles  that 

12 

C-436/03 European Parliament v Council of the European Union. 

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foundations  encounter  when  operating  across  borders,  without  laying  down  exhaustively  all 
the  rules  applicable  to  the  European  Foundation  and  without  introducing  a  new  set  of  tax 
rules.  

3.3. 

Choice of legal instrument  

A Regulation is the most appropriate means to ensure the uniformity of the Statute in all the 
Member States as a European legal form requires the uniform and direct application of rules 
across the EU. 

4. 

DETAILED EXPLANATION OF THE PROPOSAL 

Chapter I (General provisions) contains the subject matter, the rules applicable to the FE, and 
a set of definitions to ensure the clarity of the terms used for the purpose of the Regulation. 

It  lays  down  the  main  features  of  the  FE:  the  FE  is  an  entity  with  a  public  benefit  purpose 
with  legal  personality  and  full  legal  capacity  in  all  the  Member  States  of  the  EU;  it  has  a 
cross-border dimension in terms of activities or a statutory objective of carrying out activities 
in at least two Member States; its founding assets are equivalent to at least 25 000 euro. The 
FE is allowed to engage in economic activities as long as the profit is used in pursuance of its 
public benefit purpose(s), in accordance with the Regulation. An exhaustive list of the public 
benefit  purposes  accepted  under  civil  and  tax  laws  in  most  Member  States  is  provided  for 
reasons of legal certainty. 

Chapter II (Formation) lays down the methods of formation of the FE, the minimum content 
of the statutes and the registration requirements.  

With regard to its formation, the FE can be formed ex nihilo (by a testamentary disposition, 
by notarial deed or by means of a written declaration by any natural and/or legal person(s) or 
public  body(ies)  in  accordance  with  the  applicable  national  law),  by  the  merger  of  public 
benefit  purpose  entities  legally  established  in  one  or  more  Member  States  or  by  the 
conversion of a national public benefit purpose entity legally established in a Member State 
into the FE.  

The  Chapter  establishes  a  list  of  documents  and  particulars  that  should  accompany 
applications  for  registration  and  should  be  disclosed.  Moreover,  in  order  to  facilitate  the 
process of registration, the registries are required to cooperate with each other with regard to 
the documents and particulars of the FE.  

Chapter  III  (Organisation  of  the  European  Foundation)  lays  down  rules  regarding  the 
governing board, managing directors and supervisory board, including on conflicts of interest. 
In  order  to  ensure  its  credibility  and  trustworthiness,  the  FE  has  to  apply  high  standards  of 
transparency and accountability. 

Chapter  IV  (Registered  office  and  its  transfer).  The  FE  can  transfer  its  registered  office  to 
another Member State, while maintaining its legal personality and not having to wind up. 

Chapter  V  (Involvement  of  employees  and  volunteers)  contains  rules  concerning  the 
information  and  consultation  of  employees  and  volunteers,  in  accordance  with  the  relevant 
EU law. The proposal does not contain rules on employee participation in the board as board-
level participation in public benefit purpose entities exists in very few Member States. 

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Chapter VI (Dissolution of the FE). The Regulation allows the conversion of the FE back into 
a public benefit purpose entity governed by the law of the Member State in which it has its 
registered office upon the condition that the conversion is permissible under the statutes of the 
FE.  It  also  contains  rules  on  winding  up  in  cases  where  the  purpose  of  the  FE  has  been 
achieved or cannot be achieved, the time for which it was set up has expired or it has lost all 
its assets. 

Chapter  VII  (Member  State  supervision)  gives  robust  powers  to  the  competent  national 
supervisory  authorities,  in  order  to  enable  them  to  effectively  oversee  the  activities  of  the 
public benefit purpose entities they are responsible for. They have, for instance, the power to 
approve  a  change  to  the  purpose  of  the  FE,  to  inquire  into  the  affairs  of  the  FE,  to  issue 
warnings to the governing board and to order the governing board to comply with the statutes 
of the FE, the Regulation and the applicable national law, to dismiss or propose the dismissal 
of  a  board  member  to  a  court  or  to  wind-up  or  propose  winding-up  of  the  FE  to  a  court. 
Supervisory  authorities  are  also  required  to  cooperate  and  exchange  information  with  one 
another and rules are included as regards cooperation of registries and supervisory authorities 
with tax authorities.  

Chapter VIII (Tax treatment). The Regulation provides for the automatic application to the FE 
and  its  donors  of  the  same  tax  benefits  granted  to  domestic  public  benefit  purpose  entities. 
This  is  because  Member  States  would  be  required  to  regard  the  FE  as  equivalent  to  public 
benefit  purpose  entities  established  under  the  legislation  of  the  Member  States  concerned. 
Donors to and beneficiaries of the FE should be treated in accordance with the same principle. 

Chapter  IX  (Final  provisions)  requires  Member  States  to  lay  down  rules  on  penalties 
applicable  to  infringements  of  the  provisions  of  this  Regulation  and  to  take  all  measures 
necessary to ensure that they are implemented. The proposal incorporates a review clause. 

5. 

BUDGETARY IMPLICATION  

The proposal has no implication for the budget of the European Union. 

6. 

ADDITIONAL INFORMATION  

The proposed Regulation is relevant to the European Economic Area.

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2012/0022 (APP) 

Proposal for a 

COUNCIL REGULATION 

on the Statute for a European Foundation (FE) 

(Text with EEA relevance) 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 352 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national Parliaments, 

Having regard to the consent of the European Parliament13,  

Having regard to the opinion of the European Economic and Social Committee14,  

Having regard to the opinion of the Committee of the Regions15,  

Acting in accordance with a special legislative procedure, 

Whereas: 

(1) 

(2) 

Public benefit purpose entities, through their activities in numerous areas, contribute 
to  the  fundamental  values  and  objectives  of  the  Union  such  as  respect  for  human 
rights,  protection  of  minorities,  employment  and  social  progress,  the  protection, 
conservation and improvement of the environment or the promotion of scientific and 
technological advances.  

The legal framework in which public benefit purpose entities carry out their activities 
in  the  Union  is  based  on  national  laws,  without  harmonisation  at  Union  level.  In 
addition,  there  are  substantial  differences  between  civil  and  tax  laws  across  the 
Member  States.  Such  differences  make  cross-border  operations  of  public  benefit 
purpose entities costly and cumbersome. As a result, the cross-border channelling of 
funds to public benefit purposes remains largely underexploited.  

13 
14 
15 

OJ C , , p. . 
OJ C , , p. . 
OJ C , , p. . 

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(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

In  view  of  the  problems  faced  by  public  benefit  purpose  entities  and  the  fact  that 
there  is  no  other  European  legal  form  which  they  could  use  for  their  activities,  a 
European  form  specifically  designed  for  such  entities,  which  could  be  created 
throughout the Union, should be provided for. This legal form should be as uniform 
as  possible  across  the  Union  to  best  promote  cross-border  public  benefit  purpose 
activities. 

The European Parliament adopted resolutions on 6 April 2011 on a Single Market for 
Europeans16,  on  19  February  2009  on  Social  Economy17,  and  on  4  July  2006  on 
recent developments and prospects in relation to company law18, and issued a written 
declaration on 10 March 2011 on establishing European statutes for mutual societies, 
associations  and  foundations19,  in  which  it  called  for  a  Statute  for  a  European 
Foundation.  

The European Economic and Social Committee issued an opinion on 28 April 2010 
on  the  European  Foundation  Statute20.  The  Committee  of  the  Regions  issued  an 
opinion  on  1  April  2011  on  the  Single  Market  Act21.  Both  opinions  supported  the 
initiative of the Commission to establish a Statute for a European Foundation.  

The European Foundation (hereinafter ‘FE’) should be governed by the substantive 
rules set out in this Regulation and by the statutes of the FE. Provisions of national 
law applicable to public benefit purpose entities should apply to matters that are not 
regulated by the Regulation or the statutes of the FE or are only partly regulated by 
them.  

The  FE  should  promote  public  benefit  purposes  only,  understood  as  benefiting  a 
broadly  defined  group  of  beneficiaries.  Since  activities  of  public  benefit  purpose 
entities  focus  on  areas  that  are  important  for  European  citizens  and  the  European 
economy,  such  scope  would  bring  the  highest  social,  economic  and  environmental 
benefits.  In  order  to  ensure  legal  certainty,  the  public  benefit  purpose  should  be 
defined by means of a comprehensive list of purposes.  

The main purpose of the Statute is to remove obstacles that  foundations face when 
operating across borders within the Union. Therefore, the Union action should focus 
on  those  public  benefit  purpose  entities  that  already  carry  out  activities  in  other 
Member States or have the intention, stated in their statutes, of doing so.  

The  FE  should  have  assets  of  a  certain  minimum  value  to  make  it  trustworthy  for 
donors and public authorities, to prove the seriousness of its purpose and to prevent 
misuse  of  the  legal  form.  However,  the  requirement  of  a  minimum  value  of  assets 
should  not  make  the  European  Foundation  too  costly  to  establish  and  thus  make  it 
more difficult to use such a legal form. 

16 
17 
18 
19 
20 
21 

2010/2278(INI). 
2008/2250(INI). 
2006/2051(INI). 
Written declaration 84/2010, P7_DCL(2010)0084. 
INT/498 - CESE 634/2010 - April 2010. 
CdR 330/2010 fin.  

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(10) 

(11) 

(12) 

(13) 

(14) 

(15) 

(16) 

(17) 

In order to be fully operational, the FE should have legal personality and full legal 
capacity  in  all  Member  States,  and  should  be  able  to  undertake  any  activities 
necessary for the pursuit of its public benefit purpose, as long as they are in line with 
its statutes and this Regulation.  

The ability to carry out economic activities, both related and unrelated to its public 
benefit  purpose,  would  provide  the  FE  with  a  substantial  source  of  finance  and 
means  of  increasing  the  funds  available  for  public  benefit  purposes,  and  should  be 
permitted. However, in the interest of ensuring appropriate use of assets and creditor 
protection, a threshold for permitted unrelated economic activities should be set.  

To  allow  the  FE  to  pursue  its  cross-border  activities,  it  should  enjoy,  where 
necessary, a right of establishment within the meaning of Article 49 of the Treaty on 
the Functioning of the European Union.  

In order to make the FE widely accessible to founders and foundations, it should be 
possible  to  create  the  FE  ex  nihilo,  by  merger  between  national  public  benefit 
purpose entities or by converting national public benefit purpose entities into the FE. 
In order to facilitate the creation of the FE by conversion or by cross-border merger, 
the  Regulation  should  lay  down  rules  on  their  respective  procedures.  Mergers 
between  public  benefit  purpose  entities  having  their  registered  office  in  the  same 
Member State should be governed by the law of that Member State. 

In  order  not  to  impose  unnecessary  burdens  on  public  benefit  purpose  entities,  the 
formalities  for  the  registration  of  the  FE  should  be  limited  to  those  requirements 
which  are  necessary  to  ensure  legal  certainty.  The  national  registries  should  notify 
the Commission of their registered FEs.  

In order to allow the FE to have legal structures that can be adapted to its needs and 
size and are able to evolve as activity develops, the FE should be free to decide in its 
statutes the internal organisation that suits it best. However, some mandatory rules on 
governance, as well as in particular on the role and duties of the governing board and 
the minimum number of its members should be laid down by the Regulation. The FE 
should be able to establish a supervisory board or other bodies. In order to facilitate 
independent opinions and critical challenge, the governing board and the supervisory 
board of the FE should be sufficiently diverse as regards age, gender, educational and 
professional  background.  Gender  balance  is  of  particular  importance  to  ensure 
adequate  representation  of  population.  Due  to  differences  in  national  regimes,  the 
liability of directors should be governed by the applicable national law.  

It  is  essential  that  the  assets  of  the  FE  are  used  for  the  furtherance  of  its  public 
benefit  purpose.  Clear  rules  should  be  provided  in  order  to  avoid  any  conflict  of 
interests  that  would  jeopardise  this  principle.  In  this  regard,  it  should  be  noted  that 
not only an actual conflict of interest, but also the mere appearance of a conflict of 
interest can impact on the reputation and image of the FE.  

For the sake of credibility and trustworthiness, the FE should apply high standards of 
transparency  and  accountability.  The  FE  should  keep  records  of  its  financial 
transactions  and  annual  accounts.  Those  accounts  should  be  audited  in  accordance 
with the requirements laid down in Directive 2006/43/EC of the European Parliament 
and  of  the  Council  of  17  May  2006  on  statutory  audits  of  annual  accounts  and 

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(18) 

(19) 

consolidated  accounts,  amending  Council  Directives  78/660/EEC  and  83/349/EEC 
and repealing Council Directive 84/253/EEC22 and be disclosed.  

In order to enable the FE to reap the full benefits of the single market, it should be 
able to transfer its registered office from one Member State to another.  

Given  the  specific  characteristics  of  the  FE,  it  should  be  supervised  by  a  state 
supervisory  authority.  This  is  currently  the  case  in  all  Member  States  for  national 
public  benefit  purpose  entities.  In  order  to  benefit  from  the  procedures  already 
developed by national authorities, the supervision should take place at national level. 
The  Regulation  should  set  minimum  but  strong  supervisory  powers  to  guarantee 
adequate  and  sufficiently  uniform  powers  for  supervisory  authorities  across  the 
Union.  For  the  sake  of  efficient  supervision,  cooperation  between  the  supervisory 
authorities of Member States should be ensured.  

(20)  Member  States  enjoy  broad  freedom  to  determine  the  tax  treatment  applicable  to 
public  benefit  purpose  entities  and  their  donors  with  respect  to  income  and  capital 
gains  taxes,  gift  and  inheritance  taxes,  property  and  land  taxes,  transfer  taxes, 
registration taxes, stamp duties and similar taxes. At the same time, it is necessary to 
ensure that Member States do not discriminate against foreign public benefit purpose 
entities and their donors.  

(21)  Many Member States provide for beneficial tax treatment for public benefit purpose 
entities  and  their  donors.  The  FE  should,  therefore,  in  order  to  bring  the  highest 
added  value  possible  to  public  benefit  purpose  entities  in  the  Union,  be  able  to 
benefit from the same tax advantages which the Member State where the FE has its 
registered  office  grants  to  domestic  public  benefit  purpose  entities.  Such  non-
discriminatory treatment should also apply to donors giving to the FE and to the FE's 
beneficiaries within or across borders. In all cases, this treatment should be applied 
without  any  need  for  the  FE  or  its  donors  or  beneficiaries  to  prove  that  the  FE  is 
equivalent to domestic public benefit purpose entities. 

(22)  Member  States  should  grant  to  FEs  the  same  tax  treatment  for  their  economic 
activities,  including  permitted  unrelated  economic  activities,  as  to  domestic  public 
benefit  purpose  entities.  Any  preferential  tax  treatment  for  economic  activities, 
including  permitted  unrelated  economic  activities,  should  respect  the  Treaty 
provisions on competition, including State aid rules.  

(23) 

Provisions  must  be  adopted  to  guarantee  the  right  of  the  FE’s  employees  to  be 
informed and consulted at the appropriate transnational level in situations where the 
FE  has  a  significant  number  of  employees  in  different  Member  States.  In  order  to 
ensure  that  they  are  suited  to  the  specific  situation  of  each  FE,  the  practical 
arrangements for the transnational information and consultation of employees should 
be determined primarily by means of an agreement between the parties in the FE or, 
in  the  absence  thereof,  through  the  application  of  a  set  of  subsidiary  requirements 
contained in Directive 2009/38/EC of the European Parliament and of the Council of 
6  May  2009  on  the  establishment  of  a  European  Works  Council  or  a  procedure  in 
Community-scale undertakings and Community-scale groups of undertakings for the 

22 

OJ L 157, 9.6.2006, p. 87. 

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11 

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purposes  of  informing  and  consulting  employees23.  In  view  of  the  importance  of 
volunteering in foundations, long-term volunteers should be involved in the process 
of information and consultation in the FE. 

(24) 

For the effective application of this Regulation, Member States should ensure that the 
provisions they adopt in relation to this Regulation do not result in disproportionate 
regulatory restrictions with respect to the FE or in discriminatory treatment of the FE 
as compared with public benefit purpose entities governed by national law.  

(25)  Member States should lay down rules on penalties applicable to infringements of the 
provisions of this Regulation, including infringement of the obligation to regulate in 
the  statutes  of  the  FE  the  matters  prescribed  by  this  Regulation,  and  should  ensure 
that  they  are  enforced.  Those  penalties  must  be  effective,  proportionate  and 
dissuasive.  

(26) 

(27) 

The  Treaty  on  the  Functioning  of  the  European  Union  does  not  provide,  for  the 
adoption of this Regulation, powers other than those under Article 352. 

Since  the  objectives  of  the  proposed  action  to  facilitate  cross-border  activities  of 
public benefit purpose entities cannot be sufficiently achieved by the Member States 
in  so  far  as  they  involve  the  creation  of  a  public  benefit  purpose  entity  form  with 
common features throughout the Union and can therefore, by reason of the scale of 
the  action,  be  better  achieved  at  Union  level,  the  Union  may  adopt  measures,  in 
accordance with the principle of subsidiarity laid down in Article 5 of the Treaty on 
the European Union. In accordance with the principle of proportionality as set out in 
that Article, this Regulation does not go beyond what is necessary to achieve those 
objectives. 

(28) 

This Regulation is without prejudice to the rules on political foundations at European 
level laid down by Regulation (EC) N° 2004/2003 of the European Parliament and of 
the  Council  of  4  November  2003  on  the  regulations  governing  political  parties  at 
European level and the rules regarding their funding24.  

23 
24 

OJ L 122, 16.5.2009, p. 28. 
OJ L 297, 15.11.2003, p. 1. 

EN 

12 

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HAS ADOPTED THIS REGULATION: 

Chapter 1 

General provisions 

SECTION 1 

SUBJECT MATTER, APPLICABLE RULES AND DEFINITIONS 

Article 1 

Subject matter 

This  Regulation  lays  down  the  conditions  governing  the  establishment  and  operation  of  a 
European Foundation (Fundatio Europaea, hereinafter ‘FE’).  

Article 2 

Definitions  

For the purposes of this Regulation, the following definitions apply: 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

'assets'  means  any  tangible  or  intangible  resource  capable  of  being  owned  or 
controlled to produce value;  

'unrelated  economic  activity'  means  an  economic  activity  of  the  FE,  not  serving 
directly the public benefit purpose of the public benefit purpose entity;  

'testamentary disposition' means any legal document, according to the national law of 
the  Member  State  where  the  testator  is  resident,  which  describes  how  the  testator's 
property is to be managed and distributed after his/her death;  

'public  body'  means  any  entity,  whether  or  not  legally  part  of  the  state,  national, 
regional  or  local  government,  or  other  legally  constituted  public  authority,  which 
provides public services or carries out public functions on a statutory basis;  

'public  benefit  purpose  entity'  means  a  foundation  with  a  public  benefit  purpose 
and/or similar public benefit purpose corporate body without membership formed in 
accordance with the law of one of the Member States;  

'home  Member  State'  means  the  Member  State  in  which  the  FE  has  its  registered 
office  immediately  before  the  transfer  of  its  registered  office  to  another  Member 
State; 

EN 

13 

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(7) 

'host Member State' means the Member State to which the registered office of the FE 
is transferred.  

1. 

2. 

1. 

2. 

Article 3 

Rules applicable to the FE 

The FE shall be governed by this Regulation and the statutes of the FE.  

In  matters  that  are  not,  or  are  only  partly,  regulated  by  this  Regulation  and/or  the 
statutes of the FE, the FE shall be governed by the following rules: 

(a) 

(b) 

the  provisions  adopted  by  Member  States  in  order  to  ensure  the  effective 
application of this Regulation;  

for  matters  not  covered  by  point  (a),  the  provisions  of  the  national  law 
applicable to public benefit purpose entities. 

Article 4 

Disclosure  

Information  concerning  the  FE  to  be  disclosed  pursuant  to  this  Regulation  shall  be 
disclosed  in  accordance  with  the  applicable  national  law  in  such  a  way  that  it  is 
easily accessible to the public. 

The letters and order forms of the FE, whether they are in paper or electronic form, 
as well as any website of the FE shall state the following particulars: 

(a) 

(b) 

the  information  necessary  to  identify  the  registry  referred  to  in  Article  22(1), 
with the number of entry of the FE in that registry;  

the name of the FE, the Member State in which the FE has its registered office, 
the address of its registered office and,  

(c)  where  appropriate,  the  fact  that  the  FE  is  the  subject  of  insolvency  or 

dissolution proceedings. 

EN 

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SECTION 2 

GENERAL REQUIREMENTS FOR THE FE  

Article 5  

Public benefit purpose 

1. 

2. 

The FE shall be a separately constituted entity for a public benefit purpose.  

The FE shall serve the public interest at large.  

It  may  be  created  only  for  the  following  purposes,  to  which  its  assets  shall  be 
irrevocably dedicated:  

(a) 

arts, culture or historical preservation; 

(b) 

environmental protection; 

(c) 

civil or human rights;  

(d) 

elimination  of  discrimination  based  on  gender,  race,  ethnicity,  religion, 
disability,  sexual  orientation  or  any  other  legally  prescribed  form  of 
discrimination; 

(e) 

social welfare, including prevention or relief of poverty; 

(f) 

humanitarian or disaster relief; 

(g)  development aid and development cooperation;  

(h) 

assistance to refugees or immigrants; 

(i) 

protection of, and support for, children, youth or elderly; 

(j) 

assistance to, or protection of, people with disabilities; 

(k)  protection of animals; 

(l) 

science, research and innovation; 

(m)  education and training; 

(n)  European and international understanding; 

(o)  health, well-being and medical care; 

(p) 

consumer protection;  

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15 

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(q) 

assistance to, or protection of vulnerable and disadvantaged persons; 

(r) 

amateur sports;  

(s) 

infrastructure support for public benefit purpose organisations. 

Article 6  

Cross-border component  

At the time of registration, the FE shall have activities or a statutory objective of carrying out 
activities in at least two Member States. 

Article 7 

Assets  

1. 

2. 

The assets of the FE shall be expressed in euro.  

The FE shall have assets equivalent to at least EUR 25 000.  

Article 8 

Liability 

The liability of the FE shall be limited to its assets. 

SECTION 3 

LEGAL PERSONALITY AND LEGAL CAPACITY 

Article 9 

Legal personality  

The FE shall have legal personality in all Member States. 

The  FE  shall  acquire  legal  personality  on  the  date  on  which  it  is  entered  in  the  registry  in 
accordance with Articles 21, 22 and 23. 

EN 

16 

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Article 10 

Legal capacity 

1. 

The FE shall have full legal capacity in all Member States.  

Unless restricted by its statutes, the FE shall have all rights necessary to pursue its 
activities,  including  the  right  to  own  movable  and  immovable  property,  to  make 
grants, to raise funds, to receive and hold donations of any kind, including shares and 
other negotiable instruments, inheritances and gifts ‘in kind’ from any lawful source 
including from third countries. 

Where  necessary  for  the  pursuance  of  its  activities,  the  FE  shall  have  the  right  of 
establishment in any Member State. 

2. 

The FE may act in pursuit of its purpose in any lawful manner allowed by its statutes 
which  is  consistent  with  its  public  benefit  purpose  and  is  in  compliance  with  this 
Regulation.  

3. 

Unless restricted by its statutes, the FE may carry out activities in any third country.  

Article 11 

Economic activities  

1. 

2. 

Unless restricted by its statutes, the FE shall have the capacity and be free to engage 
in trading or other economic activities provided that any profit is exclusively used in 
pursuance of its public benefit purpose(s).  

Economic activities unrelated to the public benefit purpose of the FE are allowed up 
to 10% of the annual net turnover of the FE provided that the results from unrelated 
activities are presented separately in the accounts.  

EN 

17 

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Chapter II 

Formation  

SECTION 1 

METHODS OF FORMATION  

Article 12 

Methods of formation 

1. 

The FE may be formed by one of the following methods:  

(a) 

testamentary disposition of any natural person, as provided for in Article 13; 

(b)  notarial  deed  or  written  declaration  of  any  natural  and/or  legal  person(s)  or 
public body(ies) in accordance with the applicable national law, as provided for 
in Article 13;  

(c)  merger  of  public  benefit  purpose  entities  legally  established  in  one  or  more 

Member States, as provided for in Articles 14, 15 and 16;  

(d) 

conversion  of  a  national  public  benefit purpose  entity  legally  established  in  a 
Member State into the FE, as provided for in Articles 17 and 18.  

2. 

The FE shall be set up for an indefinite period of time or, where expressly laid down 
in its statutes, for a specified period of time of not less than two years. 

Article 13 

Formation by testamentary disposition, notarial deed or written declaration  

The testamentary disposition, notarial deed or written declaration shall at least: 

(a) 

express the intention to establish the FE; 

(b) 

express the intention to donate to the FE; 

(c)  determine the FE's initial assets;  

(d)  determine the public benefit purpose of the FE. 

EN 

18 

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Article 14 

Formation by merger 

1. 

2. 

3. 

1. 

2. 

The FE may be created by a merger between public benefit purpose entities legally 
established in one or more Member States provided that the following conditions are 
met:  

(a) 

the merger between national public benefit purpose entities is permitted under 
the applicable national law;  

(b) 

the merger is permitted under the statutes of each of the merging entities.  

The governing board of each of the merging entities shall decide on the merger. The 
decision  shall  meet  the  quorum  and  majority  requirements  that  would  apply  to  a 
national public benefit purpose entity wanting to merge with another national public 
benefit purpose entity, or, in the absence of such rules, the requirements that would 
apply to a national public benefit purpose entity wanting to amend its statutes. 

Without  prejudice  to  Article  16,  a  merger  between  public  benefit  purpose  entities 
legally established in the same Member State shall take place in accordance with the 
applicable national law.  

A  merger  between  public  benefit  purpose  entities  legally  established  in  different 
Member States shall take place in accordance with Article 15. 

Article 15 

Request for a cross-border merger  

A detailed request for a merger decided by the governing boards pursuant to Article 
14(2) shall be submitted by each of the merging entities to the competent authority in 
the  Member  State  where  each  entity  is  legally  established,  and,  where  applicable, 
published in accordance with the rules of that Member State.  

The request for a merger shall include the decision of the governing board referred to 
in  Article  14(2)  and  the  common  draft  terms  of  merger  containing  at  least  the 
following particulars: 

(a) 

the name and address of each of the merging public benefit purpose entities; 

(b) 

the name and address of the intended registered office for the FE; 

(c) 

the proposed statutes of the FE;  

(d) 

the forms of protection of the rights of creditors and employees of the merging 
entities.  

EN 

19 

   EN 

 
3. 

4. 

5. 

1. 

2. 

1. 

2. 

3. 

Each competent authority shall treat the request for a merger in accordance with the 
same procedures and principles as if it had been a request for a merger resulting in a 
national public benefit purpose entity.  

In each Member State concerned, the competent authority shall issue, without undue 
delay, a certificate of the completion of the pre-merger acts and formalities.  

Following the registration of the FE pursuant to Articles 21, 22 and 23, the registry 
shall notify, without delay, the competent authorities referred to in paragraph 1 and 
where applicable, the authority responsible for the registration of the public benefit 
purpose entities dissolved by the merger.  

Removal of the old registration, where applicable, shall be effected without delay but 
not before the notification has been received. 

Article 16 

Consequences of the merger 

In case of merger by the formation of a new legal person, all assets and liabilities of 
each  public  benefit  purpose  entity  shall  be  transferred  to  the  new  FE,  and  the 
merging entities shall cease to exist. 

In case of merger by absorption, all assets and liabilities of the public benefit purpose 
entity  being  absorbed  shall  be  transferred  to  the  absorbing  public  benefit  purpose 
entity, the entity being absorbed shall cease to exist and the absorbing legal person 
shall become the FE.  

Article 17 

Formation by conversion 

The  FE  may  be  formed  by  conversion  of  a  public  benefit  purpose  entity  legally 
established in a Member State, provided that it is permitted under the statutes of the 
converting entity.  

The governing board of the entity shall decide on the conversion to the FE and the 
necessary amendments to the statutes.  

The  formation  of  the  FE  by  conversion  shall  not  result  in  the  winding  up  of  the 
converting  public  benefit  purpose  entity  or  any  loss  or  interruption  of  its  legal 
personality or affect any right or obligation existing before the conversion.  

EN 

20 

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Article 18 

Request for conversion 

1. 

2. 

3. 

4. 

5. 

A detailed request for conversion decided by the governing board pursuant to Article 
17(2) shall be submitted to the competent authority in the Member State where the 
entity is legally established, and, where applicable, published in accordance with the 
rules of that Member State.  

The request for conversion shall include the decision of the governing board referred 
to in Article 17(2) and the draft terms of conversion containing at least the following 
particulars:  

(a) 

the name and address of the converting public benefit purpose entity;  

(b) 

the name and the address of the intended registered office for the FE; 

(c) 

the proposed statutes of the FE;  

(d) 

the forms of protection of the rights of the employees of the converting public 
benefit purpose entity. 

The competent authority shall treat the request for conversion in accordance with the 
same procedures and principles as if it had been a request to amend the statutes of the 
public benefit purpose entity.  

The competent authority shall issue, without undue delay, a certificate of completion 
of the pre-conversion acts and formalities.  

Following the  registration  of the FE pursuant to Article 21, 22 and 23, the registry 
shall  notify,  without  delay,  the  competent  authority  referred  to  in  paragraph  1  and 
where  applicable,  the  authority  responsible  for  the  registration  of  the  converting 
public benefit purpose entity.  

Removal of the old registration, where applicable, shall be effected without delay but 
not before the notification has been received. 

SECTION 2 

STATUTES  

Article 19 

Minimum content of the statutes  

1. 

The statutes of the FE shall include at least: 

(a) 

the names of the founders 

EN 

21 

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(b) 

the name of the FE 

(c) 

the address of the registered office 

(d) 

a description of its public benefit purposes 

(e) 

the assets at the time of formation 

(f) 

the financial year of the FE 

(g) 

the number of members of the governing board 

(h) 

rules on the appointment and dismissal of the governing board 

(i) 

the bodies of the FE other than the governing board and their functions, where 
applicable 

(j) 

the procedure for amending the statutes 

(k) 

the specified period of time the FE shall exist for if it is not established for an 
indefinite period of time 

(l) 

the distribution of net assets after winding up 

(m) 

the date when the statutes were adopted 

2. 

The statutes of the FE shall be in writing and subject to the formal requirements of 
the applicable national law. 

Article 20 

Amendment of statutes 

1. 

2. 

3. 

4. 

Where the existing statutes have become inappropriate for the functioning of the FE 
the governing board may decide on amendment to the statutes.  

The purpose of the FE may only be changed if the current purpose has been achieved 
or cannot be achieved or where the current purpose(s) have clearly ceased to provide 
a suitable and effective method of using the FE’s assets. 

Any  amendment  of  the  statutes,  insofar  it  affects  the  purpose  of  the  FE,  shall  be 
consistent with the will of the founder.  

The governing board shall adopt by unanimity any change to the purpose of the FE 
and submit it to the supervisory authority for approval.  

EN 

22 

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SECTION 3 

REGISTRATION 

Article 21 

Registration 

1. 

2. 

3. 

4. 

1. 

2. 

3. 

The FE shall be registered in one Member State.  

The  FE  formed  by  a  merger  between  two  public  benefit  purpose  entities  legally 
established in the same Member State shall be registered in that Member State.  

The  FE  formed  by  a  cross-border  merger  shall  be  registered  in  one  of  the  Member 
States where the merging entities were legally established.  

The  FE  formed  by  conversion  shall  be  registered  in  the  Member  State  where  the 
converted entity was originally legally established.  

Article 22 

Registry  

Each Member State shall designate a registry for the purposes of registration of the 
FE and notify the Commission thereof.  

The  registries  designated  pursuant  to  paragraph  1  shall  be  responsible  for  storing 
information about registered FEs. 

The  registries  shall  cooperate  with  each  other  with  regard  to  the  documents, 
information and particulars concerning the FEs. 

The registries shall notify the Commission, by 31 March each year, of the name, the 
address of the registered office, registration number and sector of activity of the FE 
registered in, and removed from, the registry in the preceding calendar year as well 
as the total number of the registered FEs at 31 December of the preceding year. 

Article 23 

Formalities relating to registration 

1. 

Applications for registration as FE shall be accompanied by the following documents 
and particulars in the language required by the applicable national law: 

EN 

23 

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(a) 

the  name  of  the  FE  and  the  address  of  its  intended  registered  office  in  the 
European Union; 

(b) 

the founding documents; 

(c) 

a  signed  statement  of  the  assets  to  be  set  aside  for  the  purposes  of  the  FE  or 
other  proof  of  the  payment  of  consideration  in  cash  or  of  the  provision  of 
consideration in kind, and details thereof; 

(d) 

the statutes of the FE; 

(e) 

the names and addresses, and  any other information necessary,  in  accordance 
with the applicable national law, to identify 

(i) 

all members of the governing board, and their alternates, if any, 

(ii) 

any other person who is authorised to represent the FE in dealings with 
third parties and in legal proceedings, 

(iii) 

the auditor(s) of the FE; 

(f)  whether  the  persons  in  points  (i)  and  (ii)  of  point  (e)  represent  the  FE 

individually or jointly; 

(g) 

(h) 

the  names,  purposes  and  addresses  of  founding  organisations  where  these  are 
legal entities, or similar relevant information as regards public bodies; 

the  names  and  addresses  of  offices  of  the  FE,  if  any  and  the  information 
necessary to identify the competent registry and the number of entry; 

(i)  where the FE was formed as a result of a merger, the following documents 

(i) 

the terms of merger;  

(ii) 

the  certificates  referred  to  in  Article  15(4),  issued  less  than  six  months 
before the date of submission of the application;  

(iii)  proof that the requirements of the applicable national law as regards the 

protection of creditors and employees have been complied with;  

(j)  where the FE was formed as a result of a conversion, the following documents 

(i) 

the terms of conversion;  

(ii) 

the  certificate  referred  to  in  Article  18(4),  issued  less  than  six  months 
before the date of submission of the application; 

(iii)  proof that the requirements of the applicable national law as regards the 

protection of employees have been complied with;  

(k) 

a certificate from the criminal records office and a declaration of the members 
of the governing board that they have not been disqualified from serving as a 
board member.  

EN 

24 

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Member States shall require no other documents or particulars for the registration. 

The  registry  or,  where  applicable,  other  competent  authority  shall  check  the 
conformity of the documents and particulars with the requirements of this Regulation 
and the applicable national law. 

The registry or, where applicable, any other competent authority, shall check whether 
the applicant complies with the requirements of this Regulation. 

The  registry  shall  register  the  FE  where  it  has  submitted  all  documents  and 
particulars referred to in paragraph 1 and where it complies with the requirements of 
this Regulation within twelve weeks from the date of application.  

No further authorisation by Member State shall be required after registration. 

The decision of the registry together with the information referred to in points (a) and 
(d) to (h) of paragraph 1 of this Article shall be disclosed.  

Article 24 

Changes to documents and particulars submitted for registration 

The governing board or any person authorised to represent the FE shall submit any 
change with respect to the documents or particulars referred to in Article 23(1) to the 
registry within 14 calendar days of the day on which the change takes place.  

After every amendment to the statutes, the FE shall submit the complete text of the 
statutes  to  the  registry  as  amended  to  date.  Any  submission  of  a  change  in  the 
registered  information  shall  be  accompanied  by  documentary  evidence  that  the 
change has been decided lawfully. 

The registration of changes with respect to the documents and particulars referred to 
in Article 23(4) shall be disclosed.  

Article 25 

Name of the FE 

The name of the FE shall include the abbreviation ‘FE’.  

Only the FE may use the abbreviation ‘FE’ in its name.  

However,  entities  the  names  of  which  contain  ‘FE’  or  are  followed  by  the 
abbreviation ‘FE’ and were registered in a Member State before the date of entry into 
force of this Regulation shall not be required to alter their names or that abbreviation. 

2. 

3. 

4. 

1. 

2. 

3. 

1. 

2. 

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25 

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Article 26 

Liability for acts undertaken before the registration of the FE 

Liability  for  acts  undertaken  before  the  registration  of  the  FE  shall  be  governed  by  the 
applicable national law. 

Chapter III 

Organisation of the FE  

Article 27 

Governing board  

1. 

2. 

3. 

1. 

The FE shall be governed by a governing board composed of an uneven number of at 
least three members as laid down in the statutes of the FE.  

Each member of the board shall have one vote when voting on the resolutions.  

Unless otherwise provided for in the statutes of the FE or this Regulation, the board 
shall decide by the majority of its members.  

Article 28 

Members of governing board 

Members of the governing board shall have full legal capacity and not be disqualified 
under the laws of any Member State or a judicial or administrative decision in any 
Member State from serving as a board member.  

2. 

Members of the governing board may resign at any moment.  

A member of the governing board shall resign in any of the following situations: 

(a) 

the member does not meet the requirements set out in paragraph 1; 

(b) 

the member does not meet the admission requirements set out in the founding 
documents or the statutes of the FE;  

(c) 

the member is found guilty by a court of financial impropriety; 

(d) 

the member has been proven, by the member's acts or omissions, to be clearly 
unfit to fulfil the duties of a board member.  

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3. 

Where  the  statutes  of  the  FE  so  provide,  the  governing  board  or  the  supervisory 
board  may  dismiss  a  member  of  the  governing  board  for  the  reasons  set  out  in  the 
second subparagraph of paragraph 2. 

The  supervisory  authority  may  dismiss  a  member  of  the  governing  board  for  the 
reasons set out in the second subparagraph of paragraph 2 or where provided for in 
the applicable national law, propose the dismissal to a competent court. 

Article 29 

Duties of the governing board and its members 

1. 

The governing board shall have the following duties: 

(a) 

(b) 

take  responsibility  for  the  proper  administration,  management  and  conduct  of 
the FE’s activities;  

ensure  compliance  with  the  statutes  of  the  FE,  this  Regulation  and  the 
applicable national law. 

2. 

Members of the governing board shall act in the best interest of the FE and its public 
benefit purpose and observe a duty of loyalty in the exercise of their responsibilities.  

Article 30 

Managing directors 

1. 

2. 

The  governing  board  may  nominate  one  or  more  managing  directors  to  be 
responsible for the day-to-day management of the FE, subject to its directions.  

The chairman and the majority of the members of the governing board shall not be 
managing directors at the same time. 

Managing  directors  shall  act  in  the  best  interest  of  the  FE  and  its  public  benefit 
purpose and observe a duty of loyalty in the exercise of their responsibilities. 

Article 31 

Other bodies of the FE 

The statutes of the FE may provide for a supervisory board and other bodies. 

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Article 32 

Conflicts of interest 

1. 

2. 

3. 

The founder and any other board members who may have a business, family or other 
relationship  with  the  founder  or  with  each  other,  that  could  create  an  actual  or 
potential conflict of interest such as to impair his/her judgment, shall not constitute 
the majority of the governing board. 

No person may at the same time be a member of both the governing board and the 
supervisory board.  

No  benefit,  direct  or  indirect,  may  be  distributed  to  any  founder,  governing  or 
supervisory board member, managing director or auditor, nor extended to any person 
having  a  business  or  close  family  relationship  with  them,  unless  it  is  for  the 
performance of their duties within the FE.  

Article 33 

Representation of the FE in relation to third parties 

The governing board, as well as any other person that the governing board has authorised and 
is  under  its  instructions,  may  represent  the  FE  in  relations  with  third  parties  and  in  legal 
proceedings.  

Article 34 

Transparency and accountability 

1. 

2. 

The FE shall keep full and accurate records of all financial transactions. 

The  FE  shall  draw  up  and  forward  to  the  competent  national  registry  and  to  the 
supervisory  authority  annual  accounts  and  an  annual  activity  report  within  six 
months from the end of the financial year.  

The first reporting period shall be from the date on which the FE is entered into the 
registry in accordance with Articles 21, 22 and 23 to the last day of the financial year 
as laid down in the statutes of the FE.  

3. 

The annual activity report shall contain at least the following: 

(a) 

information on the activities of the FE;  

(b)  description of the way the public benefit purposes for which the FE has been 

established have been promoted during the given financial year;  

(c) 

a  list  of  the  grants  distributed,  taking  into  account  the  right  of  privacy  of  the 
beneficiaries.  

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4. 

5. 

The annual accounts of the FE shall be audited by one or more persons approved to 
carry out  statutory  audits  in accordance with the national rules adopted pursuant to 
Directive 2006/43/EC of the European Parliament and of the Council.  

The  annual  accounts,  duly  approved  by  the  governing  board,  together  with  the 
opinion  submitted  by  the  person  responsible  for  auditing  the  accounts,  and  the 
activity report shall be disclosed. 

Chapter IV 

Registered office and its transfer 

Article 35 

Seat of the FE 

The  FE  shall  have  its  registered  office  and  its  central  administration  or  principal  place  of 
activities in the European Union.  

Article 36 

Transfer of registered office 

1. 

The FE may transfer its registered office from one Member State to another.  

Such  transfer  shall  not  result  in  the  winding  up  of  the  FE  or  the  creation  of  a  new 
legal entity or affect any right or obligation existing before the transfer. 

2. 

3. 

The transfer shall take effect on the date of registration of the FE in the host Member 
State.  

The  FE  shall  not  transfer  its  registered  office  where  it  is  the  subject  of  the  use  of 
supervisory powers laid down in the second subparagraph of Article 46(2), when it is 
in  dissolution  in  accordance  with  Article  40,  or  if  proceedings  for  winding-up, 
insolvency or similar proceedings have been brought against it or where the transfer 
is against the statutes of the FE or would jeopardize the fulfilment of the purpose of 
the FE.  

4. 

Registration  in  the  host  Member  State  and  removal  from  the  registry  in  the  home 
Member State shall be disclosed.  

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Article 37 

Transfer procedure  

1. 

2. 

3. 

4. 

5. 

6. 

The  governing  board  of  the  FE  shall  submit  a  transfer  proposal  to  the  competent 
authority of the home Member State. 

The transfer proposal shall include at least the following particulars: 

(a) 

the  name  of  the  FE,  the  address  of  its  registered  office  in  the  home  Member 
State,  the  information  necessary  to  identify  the  registry  referred  to  in  Article 
22(1) and the number of the FE in that registry; 

(b) 

the proposed name of the FE and the address of its intended registered office in 
the host Member State; 

(c) 

the amended statutes of the FE, where appropriate;  

(d) 

the proposed timetable for the transfer;  

(e) 

a  report  explaining  and  substantiating  the  legal  and  economic  aspects  of  the 
proposed  transfer  and  explaining  the  implications  of  the  transfer  for  creditors 
and employees of the FE.  

The  competent  authority  of  the  home  Member  State  shall  verify  that  the  situations 
listed  in  Article  36(3)  are  not  met  and  issue,  without  undue  delay,  a  certificate 
attesting to the completion of the acts and formalities to be accomplished before the 
transfer. 

The  FE  shall  submit  the  following  documents  and  particulars  to  the  competent 
authority in the host Member State: 

(a) 

the certificate referred to in paragraph 3; 

(b) 

the transfer proposal approved by the governing board; 

(c) 

the documents and particulars listed in Article 23(1). 

The competent authority of the host Member State shall verify, without undue delay, 
that  the  substantive  and  formal  conditions  provided  for  under  this  Chapter  for  the 
transfer  of  the  registered  office  are  met  and  communicate  its  decision  to  the 
competent registry of the host Member State.  

The competent authority of the host Member State can refuse the transfer only on the 
grounds that the conditions referred to in the previous subparagraph are not met.  

The  competent  registry  of  the  host  Member  State  shall  register  the  FE.  The 
competent  authority  of  the  host  Member  State  shall  notify,  without  delay,  the 
competent registry of the home Member State of the registration of the FE in the host 
Member State.  

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The  competent  registry  of  the  home  Member  State  shall  remove  the  FE  from  the 
registry without delay but not before the notification has been received.  

Chapter V 

Involvement of employees and volunteers 

Article 38 

Representation of employees and volunteers 

1. 

2. 

Where the total number of employees employed within the Union by the FE and its 
offices reaches or exceeds 50 and at least 10 in each of at least two Member States, 
the FE shall establish a European Works Council representing the employees of the 
FE in accordance with paragraph 2. 

The FE with up to 200 employees shall establish a European Works Council on the 
request  of  at  least  20  of  its  employees  in  at  least  two  Member  States  or 
representatives of those employees. 

The FE with more than 200 employees shall establish a European Works Council on 
the  request  of  at  least  10%  of  its  employees  in  at  least  two  Member  States  or 
representatives of those employees.  

The national measures on the subsidiary requirements set out in subpoints (a) to (e) 
of point 1 of Annex I to Directive 2009/38/EC of the European Parliament and of the 
Council shall apply to the establishment of the European Works Council.  

3. 

Representatives of volunteers engaged in formal volunteering activities in the FE for 
a sustained period shall be given an observer status in the European Works Council.  

The  number  of  such  representatives  shall  be  of  at  least  one  per  Member  State  in 
which at least 10 such volunteers are present. 

Article 39 

Information and consultation of employees and volunteers 

1. 

2. 

The  employees  and  volunteers  of  the  FE  shall  be  informed  and  consulted  at  Union 
level  on  the  situation,  evolution,  organisation  and  employment  matters  of  that  FE 
through the European Works Council established in accordance with Article 38. 

The  European  Works  Council  and  the  governing  board  or,  where  applicable,  the 
managing directors of the FE may conclude an agreement on practical arrangements 
for the information and consultation of employees in the FE.  

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3. 

Where no such agreement is concluded or to matters not covered by such agreement, 
the national measures on the subsidiary requirements set out in points 2-6 of Annex I 
to Directive 2009/38/EC of the European Parliament and of the Council shall apply. 

Chapter VI 

Dissolution of the FE 

Article 40 

Methods of dissolution 

The FE may be dissolved by one of the following methods: 

(a) 

conversion  of  the  FE  into  a  public  benefit  purpose  entity  under  national  law,  as 
provided for in Article 41 and 42; 

(b) 

winding up the FE, as provided for in Article 43 and 44. 

Article 41 

Dissolution by conversion 

1. 

2. 

3. 

1. 

2. 

The FE may be converted into a public benefit purpose entity governed by the law of 
the Member State in which it has its registered office, provided that the conversion is 
permitted under the statutes of the FE.  

The conversion may only take place after two years from the registration of the FE.  

The  governing  board  of  the  FE  shall  decide  on  the  conversion  and  the  necessary 
amendments to the statutes.  

The conversion shall not result in winding up of the entity or in the creation of a new 
legal person or affect any right or obligation existing before the conversion. 

Article 42 

Request for dissolution by conversion  

The FE shall submit a detailed request for dissolution by conversion to the competent 
authority  in  the  Member  State  where  it  has  its  registered  office  in  accordance  with 
the law of that Member State.  

The request for dissolution by conversion shall include the decision of the governing 
board of the FE referred to in Article 41(2), name and address of the registered office 

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of the converting FE, the proposed name, address and the statutes of the new public 
benefit purpose entity, and the forms of protection of the rights of the employees of 
the converting FE.  

Where the competent authority approves the request for dissolution by conversion, it 
shall forward it to the registry and, where applicable, to the authority responsible for 
the registration of the new public benefit purpose entity.  

Upon receipt of the approved request for dissolution by conversion, the registry shall 
remove the FE from the registry without delay, provided that the legal establishment 
of the new public benefit entity has been completed.  

The  conversion  shall  take  effect  on  the  date  on  which  the  FE  is  deleted  from  the 
competent registry.  

3. 

4. 

5. 

The conversion shall be disclosed.  

Article 43 

Decision to wind up  

1. 

The governing board of the FE may decide to wind up the FE in one of the following 
cases: 

(a) 

the purpose of the FE has been achieved or cannot be achieved;  

(b) 

the time for which it was set up has expired;  

(c) 

it has lost all its assets. 

The governing board shall submit its decision to wind up the FE to the supervisory 
authority for approval. 

2. 

The  supervisory  authority  may,  after  having  heard  the  governing  board  of  the  FE, 
decide  to  wind  up  the  FE  or,  where  provided  for  in  the  applicable  national  law,  to 
propose its winding up to a competent court in one of the following situations:  

(a)  where the governing board has not acted in the cases referred to in paragraph 1;  

(b)  where  the  FE  continuously  violates  its  statutes,  this  Regulation  or  the 

applicable national law.  

Article 44 

Winding up 

1. 

Where  the  supervisory  authority  has  approved  the  decision  of  the  governing  board 
pursuant  to  the  second  subparagraph  of  Article  43(1)  or  where  the  supervisory 

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authority or, where applicable, a court has decided to wind up the FE, the assets of 
the FE shall be used in accordance with paragraph 2 of this Article.  

2. 

3. 

Once the creditors of the FE have been paid in full, any remaining assets of the FE 
shall  be  transferred  to  another  public  benefit  purpose  entity  with  a  similar  public 
benefit purpose or otherwise used for public benefit purposes as close as possible to 
those for which the FE was created. 

Final  accounts  until  the  date  when  the  winding  up  takes  effect  shall  be  sent  to  the 
supervisory  authority  by  the  governing  board  or  the  liquidator  responsible  for  the 
winding  up  together  with  a  report  including  information  on  the  distribution  of  the 
remaining assets. These documents shall be disclosed. 

Chapter VII 

Member State supervision  

Article 45 

Supervisory authority  

Each Member State shall designate a supervisory authority for the purpose of supervising FEs 
registered in that Member State and notify the Commission thereof.  

Article 46 

Powers and duties of the supervisory authority  

1. 

2. 

The  supervisory  authority  shall  ensure  that  the  governing  board  acts  in  accordance 
with the statutes of the FE, this Regulation and the applicable national law. 

The supervisory authority shall have the power to approve the change to the purpose 
of the FE pursuant to Article 20(4) and the winding up of the FE pursuant to second 
subparagraph of Article 43(1). 

For  the  purposes  of  paragraph  1,  the  supervisory  authority  shall  have  at  least  the 
following powers:  

(a)  where  the  supervisory  authority  has  reasonable  grounds  to  believe  that  the 
governing board of the FE is not acting in accordance with the statutes of the 
FE , this Regulation or the applicable national law, to inquire into the affairs of 
that FE and, for that purpose, to require the directors and employees of the FE 
as  well  as  its  auditor(s)  to  make  available  all  necessary  information  and 
evidence; 

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(b)  where  there  is  evidence  of  financial  impropriety,  serious  mismanagement  or 
abuse, to appoint an independent expert to inquire into the affairs of the FE at 
the expense of the FE; 

(c)  where there is evidence that the governing board has not acted in accordance 
with  the  statutes  of  the  FE,  this  Regulation  or  the  applicable  national  law,  to 
issue  warnings  to  the  governing  board  and  to  order  the  governing  board  to 
comply with the statutes of the FE, this Regulation and the applicable national 
law; 

(d) 

(e) 

to  dismiss  a  member  of  the  governing  board  or  where  provided  for  in  the 
applicable  national  law,  to  propose  the  dismissal  to  a  competent  court  in 
accordance with the second subparagraph of Article 28(3); 

to decide to wind up the FE or, where provided for in the applicable national 
law, to propose the winding up of the FE to a competent court in accordance 
with Article 43(2).  

3. 

Notwithstanding paragraph 2, the supervisory authority shall have no power to act in 
the administration of the FE. 

Article 47 

Co-operation between supervisory authorities 

1. 

2. 

3. 

In order to carry out supervisory powers and take the necessary steps provided for in 
Article 46, the supervisory authority of Member State where the FE has its registered 
office and the supervisory authorities of Member States where the FE carries out its 
activities shall cooperate with each other.  

The supervisory authorities shall provide each other with all relevant information in 
the event of infringements or suspected infringements by the FE of its statutes, this 
Regulation or the applicable national law.  

On request of the supervisory authority of a Member State where the FE carries out 
its  activities,  the  supervisory  authority  of  the  Member  State  where  the  FE  has  its 
registered office shall investigate suspected infringements by that FE.  

The requested supervisory authority shall inform the requesting supervisory authority 
of  the  conclusions  which  it  draws  from  the  information  available  to  it  and  of  any 
action taken.  

Article 48 

Co-operation with tax authorities 

1. 

The supervisory authority of the Member State where the FE has its registered office 
shall inform the tax authorities of that Member State as soon as it starts an inquiry 

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2. 

3. 

1. 

2. 

3. 

1. 

into  suspected  irregularities  pursuant  to  point  (a)  of  the  second  subparagraph  of 
Article 46(2) as well as when it designates an independent expert pursuant to point 
(b) of the second subparagraph of Article 46(2).  

It  shall  also  inform  those  tax  authorities  of  the  progress  and  outcome  of  those 
inquiries as well as about any warnings issued or sanctions imposed.  

The registry as well as the supervisory authority of the Member State where the FE 
has  its  registered  office  shall  make  available  to  the  tax  authority  of  any  Member 
State, on its request, any documents or information concerning the FE. 

Chapter VIII 

Tax treatment  

Article 49  

Tax treatment of the FE 

With respect to  income and  capital gains  taxes, gift and inheritance taxes, property 
and land taxes, transfer taxes, registration taxes, stamp duties and similar taxes, the 
Member State where the FE has its registered office shall subject the FE to the same 
tax  treatment  as  is  applicable  to  public  benefit  purpose  entities  established  in  that 
Member State.  

With regard to the taxes referred to in paragraph 1, Member States other than those 
in  which  the  FE  has  its  registered  office  shall  subject  the  FE  to  the  same  tax 
treatment  as  is  applicable  to  public  benefit  purpose  entities  established  in  those 
Member States.  

For  the  purposes  of  paragraphs  1  and  2,  the  FE  shall  be  regarded  as  equivalent  to 
public benefit purpose entities established pursuant to the law of the Member States 
concerned.  

Article 50 

Tax treatment of donors to the FE 

Any  natural  or  legal  person  donating  to  the  FE  within  or  across  borders  shall  be 
subject,  with  respect  to  income  taxes,  gift  taxes,  transfer  taxes,  registration  taxes, 
stamp  duties  and  similar  taxes,  to  the  same  tax  treatment  that  is  applicable  to 
donations  made  to  public  benefit  purpose  entities  established  in  the  Member  State 
where the donor is resident for tax purposes.  

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2. 

For the purposes of paragraph 1, the FE receiving the donation shall be regarded as 
equivalent  to  public  benefit  purpose  entities  established  pursuant  to  the  law  of  the 
Member State where the donor is resident for tax purposes. 

Article 51 

Tax treatment of beneficiaries of the FE 

Beneficiaries of the FE shall be treated, with respect to the grants or other benefits received, 
as  if  they  were  given  by  a  public  benefit  purpose  entity  established  in  the  Member  State  in 
which the beneficiary is resident for tax purposes. 

Chapter IX 

Final provisions 

Article 52 

Effective application  

Member States shall make such provision as is appropriate to ensure the effective application 
of this Regulation two years after its entry into force at the latest.  

Article 53 

Penalties 

Member States shall lay down rules on penalties applicable to infringements of the provisions 
of this Regulation and shall take all measures necessary to ensure that they are implemented. 
The  penalties  provided  for  must  be  effective,  proportionate  and  dissuasive.  Member  States 
shall notify those provisions to the Commission by [two years following the entry into force] 
at the latest and shall notify it without undue delay of any subsequent  amendment  affecting 
them.  

Article 54 

Review of the Regulation 

Seven years after the entry into force of this Regulation, the Commission shall forward to the 
Council  and  the  European  Parliament  a  report  on  the  application  of  the  Regulation  and 
proposals for amendments, where appropriate.  

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Article 55 

Entry into force 

This Regulation shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

It shall apply from [2 years from the entry into force]. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, 8.2.2012 

For the Council 
The President 

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