COMMISSION STAFF WORKING DOCUMENT on the outcome of the peer review on legal form, shareholding and tariff requirements under the Services Directive Accompanying the document Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee on Evaluating national regulations on access to professions
Date: 2013-10-02
Institutions: European Commission
Subjects: access to a profession, competitiveness, consumer information, job creation, liberal profession, official market, self-employed person, single market, tax













EUR-Lex - 52013SC0402 - EN











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52013SC0402

COMMISSION STAFF WORKING DOCUMENT on the outcome of the peer review on legal form, shareholding and tariff requirements under the Services Directive Accompanying the document Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee on Evaluating national regulations on access to professions /* SWD/2013/0402 final */









Contents
Introduction. 3
1........... The peer review
process. 3
1.1........ Scope and methodology. 3
1.2........ Main objectives. 4
2........... Results of the Peer
Review.. 4
2.1........ Legal form and
shareholding requirements in the EU.. 4
2.2........ Effect of legal form and
shareholding requirements on establishment 6
2.2.1..... Restrictions on secondary
establishment 6
2.2.2..... Restrictions on primary
establishment 7
2.3........ Convergence of public
interest reasons across Member States. 8
2.4........ Divergent application of
the proportionality test 9
2.4.1..... The proportionality test
(Art. 15 Services Directive) 9
2.4.2..... Were restrictions assessed?. 10
2.4.3..... Were less restrictive
alternatives taken into account?. 10
2.5........ Alternative practices. 11
2.5.1..... Legal form and shareholding
requirements linked to the use of a professional title as opposed to being a
condition for the provision of the service. 11
2.5.2..... Capital vs. voting rights or
management control 12
2.5.3..... Control level thresholds. 12
2.5.4..... Majority requirements vs.
incompatibility rules. 13
2.6........ Tariffs in the EU.. 13
2.6.1..... Effect of fixed tariffs on
establishment 14
2.6.2.....  Public interest reasons
invoked by the Member States. 14
2.6.3..... Divergent application of the
proportionality test 15
3........... Conclusions. 15
ANNEX.. 17
Summary of work in clusters per profession. 17
1........... Accountants. 17
2........... Architects. 19
3........... Patent agents. 21
4........... Tax advisers. 22
5........... Veterinarians. 24
              introduction
In its
Article 15, the Directive 2006/123/EC on services in the internal market
("Services Directive") lists a series of requirements imposed on
service providers, among which legal form, shareholding and tariffs. 
These
requirements are not strictly prohibited but have been identified by the Court
of Justice of the EU as creating obstacles to the internal market in services.
They can only be maintained in so far as they are non-discriminatory, justified
by an overriding reason relating to the public interest and proportionate, i.e.
no less restrictive measure could be used. As part of the transposition of the
Services Directive, Member States were to screen their requirements and assess
whether they met this three-step test. 
The
report on the implementation of the Services Directive published in June 2012[1] shows that,
even though some Member States relaxed or suppressed some legal form and
shareholding requirements as part of their implementation of the Services
Directive, these requirements remain widespread among EU Member States. By
contrast, most compulsory tariffs seem to have been abolished in the EU, with
few exceptions, where they have been maintained by some Member States for
professional services.
The Commission therefore
announced in its Communication of 8 June 2012[2]
that it would conduct a peer review on legal form and shareholding requirements.
It also announced a Communication aimed at facilitating the mutual evaluation
of regulated professions foreseen in the revised Professional Qualifications
Directive. This latter Communication is published at the same time as this
Staff Working Document in order to ensure a comprehensive examination of the
national rules restricting the access to or the exercise of professions. It
will focus on the requirements reserving the exercise of certain activities or
the use of a professional title to the holders of specific professional
qualifications. 
The
peer review took place following a methodology agreed beforehand with Member
States. Discussions took place on 19 and 20 December 2012 in clusters of 7 to 8
Member States and were followed by plenary meetings of Member States’ experts
in January and February 2013. Fixed tariffs were also discussed in a plenary
meeting.
1.           The
peer review process
1.1.        Scope and methodology
The
main objective of the peer review was to make it possible for Member States,
together with the Commission, to better understand and compare the existing
national or regional requirements and their justification. 
In
order for the discussions to go into the substance of the requirements and
public interest justifications, the Commission decided to limit the peer review
to legal form, shareholding and tariffs requirements in five professions,
namely accountants, tax advisers, architects, veterinarians and patent agents.
The professions concerned were chosen in business services and construction
sectors, which were identified as key services sectors in the June 2012
Communication.
Discussions
took place in December 2012 in small clusters of Member States in respect of
legal form and shareholding requirements. The clusters were composed of Member
States with different regulatory approaches. Factual data sheets prepared in
advance by the Commission from the information gathered as a result of the
mutual evaluation (2010), the performance checks (2011) and the Services
Directive implementation report (2012), served as a basis for the discussions,
enabling the exchanges of views to focus on regulatory approaches and
proportionality issues rather than on information gathering.
Plenary
meetings of Member States' experts were organised following the cluster
meetings, both to gather feedback from the cluster discussions and to allow
some of those Member States, which do not impose legal form and shareholding
requirements, to present their regulatory systems. 
Tariffs
were discussed in a plenary meeting on the basis of factual data sheets
prepared by the Commission.
1.2.        Main objectives
The
peer review gave Member States an opportunity to explain the rationale for
their requirements, any changes made to their regulatory systems and the impact
of these changes.
The
purpose of the peer review was also to allow Member States to compare
approaches and at times challenge the justifications and proportionality of
different policy options. Member States were invited to explain how they used
the discretion left to them in the Services Directive and compare the methods chosen
to achieve public policy objectives. The aim of the discussions was to go
beyond the purely legal obligations set by the Directive and to look, in
particular, at the legal form, shareholding requirements and tariffs in a wider
context, so as to gain some insight into the potential economic and societal
benefits which the removal or relaxation of these requirements would bring.
2.           Results
of the Peer Review
2.1.        Legal form and shareholding requirements in the EU
The
peer review confirmed the diversity of approaches in the EU. Rules, which are
often complex, vary from one Member State to the other, reflecting the strong
weight of tradition and different historical evolutions. The peer review
confirmed the existence of two broad regulatory approaches among EU Member
States as regards the activities of regulated professions. 
Under
the first approach, regulated professionals traditionally used to perform their
activities as ‘liberal’ professionals, i.e. as sole practitioners.  Specific
legal forms, often civil law partnerships – also called professional companies,
were created to enable them to perform their activities collectively. Commercial
company forms are traditionally considered to be incompatible with the
‘liberal’ nature of the profession. The legal form requirements are often
combined with capital ownership requirements, to preserve the ‘liberal nature’
of the activities. The most widespread requirement is that the capital of the
company must be controlled by the qualified professionals who also work in the
company. In certain Member States, these partnerships may also participate as
majority shareholders in the capital of other professional companies. Restrictions
may also be imposed on the voting rights or management positions, which may
have to be reserved at least in part to qualified professionals. In
such ventures, the participating professionals often are jointly liable for
damages arising from their professional acts, though they can in some instances
benefit from limited liability. Such a regulatory approach exists mainly,
though with differences in substance and varying levels of intensity, in
Austria, Belgium, Bulgaria, Cyprus, France, Germany, Italy, Malta, Portugal,
Spain, Czech Republic, and Poland.
Since
the adoption of the Services Directive, a few Member States abolished their
legal form or shareholding requirements. This is the case, in particular, of Greece which did so for all professions, with limited exceptions. Hungary, by and large, did the same, and relies more on professional rules of conduct, as
an alternative method of protecting service recipients and consumers. 
Some
other Member States, while keeping legal form and shareholding requirements,
extended the choice of legal forms available to professionals and/or reduced
the scope and/or intensity of shareholding requirements, though usually
maintaining the obligation for professionals to hold a controlling stake. France, for instance, reduced its 75% shareholding requirement to 51% for several liberal
professions (with exceptions, e.g. veterinarians and lawyers). Italy, which traditionally only allowed sole practitioners, recently opened the possibility
to set up professional companies. The number of professionals
and their participation in the share
capital must be such as to
determine a 66,6 % majority in
the deliberations or decisions of shareholders. Spain
and Cyprus have opened further company forms to regulated professionals. Portugal reduced the minimum capital ownership obligation to 51% for several professions,
even though some exceptions remain. 
Under
the second approach, qualified professionals may provide their services via
companies, be it commercial companies, without any requirement to control such
companies. In practice, the professional will provide his services in the name
of the company and thus benefit from the company’s limited liability. This
approach exists in several Member States including Denmark, Finland, Hungary, Sweden, the Netherlands, and the United Kingdom and to some extent also in Germany. There are variations in the regulatory choices made in these Member States. Some
Member States regulate the activities (as opposed to) the professionals. This
results in some of Member States with no or very few legal form and
shareholding requirements having a fairly high number of regulated professions.
For example, the UK has 220 regulated professions, which contrasts with France’s 150.[3] Another
approach is not to regulate the provision of the service but rather to control
the quality of the service provided. A good example exists with regard to building
permit applications. While in some Member States building permit applications
may only be lodged by qualified architects and public authorities will only
check conformity with the land planning laws, other Member States, like Sweden, do not impose restrictions on who can lodge a building permit application, but
public authorities employ qualified architects who will check that the plans
are sound.
2.2.        Effect of legal form and shareholding requirements on
establishment
Restrictions
on legal form and shareholding have an impact on both secondary and primary
establishment.  Secondary establishment refers to the
situation where an undertaking already established in a Member State sets up a branch or subsidiary in another Member State. Primary establishment refers to
the creation of a first undertaking.
2.2.1.     Restrictions on secondary establishment
Subsidiaries
are the most common form of secondary establishment of companies wishing to
expand their operations, in their home or in another Member State. Restrictions on legal form and shareholding in the Member State in which secondary
establishment is sought, however, can prove a significant obstacle for incoming
service providers. 
Clearly,
the most stringent requirement is to only allow a professional activity to be
carried out as a sole practitioner. Such a rule makes the establishment of any
sort of legal structure impossible, be it as a secondary or as a primary
establishment. This type of restriction only subsists in rare cases.
When
Member States allow the collective performance of professional activities,
subject to legal form and shareholding requirements, the effect of these
requirements on the setting up of subsidiaries will depend on three aspects:
(1) Must the control of the company be in the hands of individual professionals
(i.e. natural persons)? (2) If “professional companies” may qualify as
controlling shareholders, under which conditions do companies from other Member
States which provide the same professional services qualify as “professional
companies”? (3) Can the professional services be provided by companies other
than “professional companies”?
The
rule requiring that professional companies be controlled by natural persons
means that legal persons cannot be controlling shareholders. This makes it
impossible for a professional company to be the subsidiary of another company. In
other words, a Danish company providing accounting services will not be able to
set up a subsidiary to provide the same services in Italy, because for any
company providing accounting services in Italy the number of professionals
registered with a professional order and their participation in the share capital must be
such as to determine a 66.6 %
majority in the deliberations or decisions of shareholders.   
Some
Member States allow professional companies (i.e., not just individual
professionals) to control other professional companies. This brings relative,
though welcome, flexibility. However, with regard to secondary establishment,
the key question will then be whether the Member State which allows
professional companies to control other professional companies recognises as
“professional companies” any company, which lawfully provide the same professional
services under the laws of another Member State.  This may not be the case if
the professional companies from other Member States are set up as commercial
companies, even if they provide their services lawfully under the rules of
their home Member State. If they are not recognised as professional companies
in the host Member State, they will not be able to set up subsidiaries there.
Such
rules on capital ownership create a bottleneck on secondary establishment in
particular where the Member State which imposes such rules, in addition, makes
of the legal form requirement a condition to provide the professional service. 
The
following example illustrates this. 
Member
 State A leaves professionals free to choose the legal
form under which they want to operate. A professional decides to set up a
commercial company through which he provides his professional services. 
Member
State B requires that professional companies be controlled by individual
professionals and/or other (civil) professional companies. 
Unless
the company of Member State A is considered a professional company in Member
State B (which is unlikely since it is a commercial company), it is left with
the following choice as regards setting up a secondary establishment in Member
State B: 
·       
either it sets up a subsidiary as a commercial
company, but that company will not be able to provide architectural services
(because it will not qualify as a professional company), 
·       
or individual professionals affiliated with it
set up a professional company in Member State B, but, by definition, the
individual professionals will control the professional company. It will
therefore not be a subsidiary of the company based in Member State A.
2.2.2.     Restrictions on primary establishment
Legal
form and shareholding restrictions do not only have an impact on secondary
establishment, they also affect primary establishment. 
Legal
form and shareholding requirements enable the collective performance of the
professional activity while preserving the 'liberal' character of the
profession and allegedly its independence. While the case is often made that
these restrictions are conducive to a high service quality and thus protect
service recipients (see paragraph 2.3 below), they also reduce the scope for
competition, hamper business development and innovation. 
As in
the case of secondary establishment, the rule limiting the professional
activity to sole practitioners constitutes the most stringent restriction to
primary establishment, as it excludes the collective performance of the service
activities. This is the case, for instance, of veterinarians in Luxembourg and France, and of patent agents in Belgium and Bulgaria. 
The
collective performance of service activities via legal forms with a high level
of personal liability, like partnerships without limited liability, is argued
to have a strong disciplinary effect on the professionals and to ensure a
better quality of service via mutual control by the business partners. Such
rules, however, can at the same time hamper the development of professional
activities and a balance should be found between the need to ensure the quality
and the restrictiveness of the measures taken. 
Where
Member States allow for the collective performance of the service activities
via company forms, the main issue in terms of business creation and development
will be the requirement that the majority of the share capital be held by the
professionals.  This will be the case in particular when this requirement
applies to many, if not all, regulated professions. Where this is the case, it
means that in practice professional companies can perform one type of activity
only. It makes it impossible to set up multidisciplinary companies.
For
example, the requirement that 51% of the shares of accounting firms must be
held by accountants will make it impossible for such firms to associate with
tax advisers, if tax advisers are subject to the same 51% ownership
requirement.
Such
ownership rules, which impose in practice a “one company – one activity” model,
hamper the emergence of new, more innovative business models which would enable
companies to offer a wider range of services. The discussions which took place
as part of the peer review confirmed this. 
These
requirements can also have a direct impact on the innovation and growth
capacity in certain sectors. The peer review showed that, where such rules
exist, innovation can be hampered by problems in accessing affordable capital.
An example was given, in the context of the legal profession, of software
currently being developed which delivers legal advice based on the analysis of the
complete case law. Such software requires significant investment which many law
firms cannot make because their compulsory capital structure does not allow
them to have recourse to outside capital.
Similar
issues may arise in other sectors like architecture or health, where access to
capital to acquire new tools (often IT-based) may be made more difficult by
requirements that capital ownership remains in the hands of individual
professionals.
2.3.        Convergence of public interest reasons across Member States
Even
though legal form and shareholding requirements are restrictions to the freedom
of establishment, they may nonetheless be maintained to the extent that they
are justified by an overriding reason relating to the public interest (article
15(2) Services Directive). 
The
peer review revealed a strong convergence of the “overriding reasons relating
to the public interest” invoked by Member States to justify legal form and
shareholding requirements. This contrasts strongly with the variety of
regulatory frameworks and the wide variations in the intensity of the
restrictions, which exist in the Member States.
The two
overriding public interest grounds, which Member States cited most often in the
peer review as justifying restrictions to the freedom of establishment, were
the need to ensure the quality of the service (thus indirectly consumer
protection) and the need to ensure the independence of professionals.  Other
overriding public interest grounds, such as professional secrecy, may come into
play in particular in other service activities which were not subject to the
peer review.
At
first sight, the need to ensure service quality per se seems indisputable. The actual
need for a high level of service quality, however, should be assessed in light
of the risk linked to poor service performance (see paragraph 2.4 below).
The
need to ensure the independence of professionals was considered both as
necessary because of the “liberal” nature of the professions and because of the
need to protect professionals from undue pressure, which could distract them
from their professional duty towards their clients. Holding a controlling stake
in their business venture would be necessary to shield them from the pressure
which a non-professional controlling shareholder could exert on them, e.g., to
enhance the venture’s profitability at the expense of service quality. Independence of a profession, therefore, is also often cited as necessary to ensure the
quality of the service provided.  
Interestingly,
however, the need to ensure the independence of professionals varies greatly between
Member States and from one profession to the other. For example, while one Member State will impose such restrictions on veterinarians, it will not do so on
accountants, or vice versa. Some other Member States will not have any such
restrictions, be it that they consider that the independence of the
professionals is not essential to the performance of that activity or that they
ensure independence by other means, like rules of conduct or rules on incompatibility.

Furthermore,
it was not always quite clear during the peer review discussions how precisely
legal form and shareholding requirements are necessary to meet the stated
public interest objectives, nor whether measures which would be less restrictive
on establishment were actually explored.
2.4.        Divergent application of the proportionality test
2.4.1.     The proportionality test (Art. 15 Services Directive)
Article
15 of the Services Directive[4]
imposes on Member States a three-stage proportionality test, when assessing
legal form and shareholding requirements: 
1.     
Ensure that the measure is non-discriminatory;
2.     
Identify the overriding reason related to the
public interest justifying the measure; and
3.     
Ensure that the measure is proportionate i.e.
that the public interest objective could not be met with a measure which is
less restrictive. 
Stage 1
does not seem to have raised too much difficulty and measures in place apply to
all professionals. By contrast, the implementation of stages 2 and 3 raises questions.
While
there is little doubt that a high quality of services is positive, this should
be assessed in light of the risk or consequences to which the provision of a
low quality service would expose consumers/service recipients. The risk will
evidently vary depending on the service activity concerned.  Clearly, service
quality will be of particular importance where it serves another public
interest objective, such as consumer protection, safety or protection of
health.  The same applies to the independence of the professionals. The need to
ensure service quality and the independence of the profession will not have the
same degree of intensity as a public interest objective whether one speaks of veterinary,
architectural, accounting, tax advising and patent agency services, to name
only the services considered in the peer review. Member States, however, do not
seem to have made a concrete assessment of the actual need to ensure service
quality and the independence of the profession in each case. 
In
accordance with Article 15 of the Services Directive Member States should have
examined whether their legal system makes access to and exercise of service
activities subject to compliance with requirements set out in paragraph 2 of
the same Article and whether the requirements satisfy the conditions of
non-discrimination, necessity and proportionality, set out in paragraph 3.
2.4.2.     Were restrictions assessed?
The
discussions in the mutual evaluation and the peer review revealed that some
Member States suppressed restrictions for some professions, or reduced them
(e.g., by making additional company forms available and/or by reducing the
majority control of the share capital by professionals from 75% to 51%), while
others maintained very strong restrictions such as 100% capital ownership and
sole practice. 
Of
course, there may be variations in the Member States’ assessment of their
public interest objective, even though there can be doubts as to whether the
proportionality assessment was carried out rigorously and consistently. This is
the case, in particular, when the restrictions applied within the same Member
States do not seem to rely on a clear methodology. It may be difficult to
understand for example which overriding reason relating to the public interest
justifies that patent agents may be subject in some Member States to stricter
legal form and shareholding requirements than veterinarians, even though the
latter’s activities seems more sensitive from a public interest point of view.
2.4.3.     Were less restrictive alternatives taken into account?
The
proportionality test requires that less restrictive alternatives be taken into
account. In general, this seems not to have been done, at least not in a
consistent and systematic way. 
In
particular, the assessment of proportionality requires that due consideration
be taken of the global environment in which the professional service activity
takes place. If other mechanisms and safeguards are in place which seek to meet
public interest objectives, these should be taken into account when determining
the need for legal form and shareholding requirements, and if so, the
restrictiveness of those requirements. 
Indeed,
when professionals (1) have a regulated professional qualification and (2)
benefit from a protected professional title and (3) a reserve of activities,
when in addition (4) their professional order issues rules of conduct
(including on the prevention of conflicts of interest) and (5) they are subject
to insurance/guarantee requirements to protect consumers, one can reasonably
question the extent to which legal form and shareholding requirements are
necessary in addition to all other safeguards to protect the
independence of the profession and ensure the quality of the service. In light
of the obstacles which legal form and shareholding requirements impose on
establishment, this question cannot be avoided. 
A
careful assessment of proportionality would have required assessing the actual need
for restrictions on establishment in light of the public interests to protect,
if any. It would have also required Member States to ensure that there were no
less restrictive measures capable of meeting the public interest objectives.  
2.5.        Alternative practices
The
peer review revealed the existence of some alternative models, even though
these may not necessarily be labelled as best practices. Variety also exists
among those regulatory regimes which maintain legal form and/or shareholding
requirements mainly in Austria, Spain, Italy, France, Belgium, Portugal, Luxemburg, and to some extent also in Greece, Cyprus and Germany. Among these models, some practices may have a less restrictive impact on
establishment than others.
2.5.1.     Legal form and shareholding requirements linked to the
use of a professional title as opposed to being a condition for the provision
of the service 
In many
cases, legal form and shareholding requirements are a pre-requisite to the
provision of professional services via an undertaking. As explained under
paragraph 2.2.1. above, when this requirement is combined with restrictions on
shareholders, it constitutes a strong obstacle to secondary establishment. 
In some
cases, however, the legal form and shareholding requirements will only be a
condition for the use of the professional title by the company, but not for the
provision of the service. 
For
architects in Germany, for example, the legal form and shareholding
requirements are exclusively linked to the use of the professional title by the
company, but not to the provision of the service. If the company is to bear the
professional title ‘architect’ in its name (e.g. “Schmidt Architekten”), then
it must meet legal form and shareholding requirements. But architects may set
up any other form of company, through which they can provide architectural
services, as long as the company does not include the word “architect” or
“architectural” as part of its name (e.g. “Schmidt Design”). 
In a
somewhat similar way, in Bulgaria the title "design office" can be
used subject to shareholding requirements without reserving the professional
activity to companies with such titles. In other words, the service must be
provided by qualified professionals, but the legal form and shareholding
requirements are only a condition for the use of the professional title by the
company, not for the provision of the service. 
Such a
rule is much less restrictive on establishment than shareholding requirement
for the provision of the service. It does not stop professionals from other
Member States, no matter their home regulatory regime, from setting up
subsidiaries. The only restriction is that their subsidiary may not bear the
professional title. Furthermore, such a rule, if extended to other professions,
has a much lighter effect on primary establishment, since it makes the setting
up of multidisciplinary firms possible.
2.5.2.     Capital vs. voting rights or management control
In
order to keep the control of a company in the hands of professionals, a common
approach is to require the majority shares to be held by the professionals.
This may be combined with the obligation for the professionals to hold the
majority of voting rights and to control the board of the company. However,
other Member States, which share the same public interest objective, require
only the majority of voting rights or management positions to be held by the
professionals and have no rule on capital ownership. This is the case, for
example, of Italy, which imposes on professionals the obligation to hold such a participation in the share capital as to
determine a 66.6 % majority in
the deliberations or decisions of shareholders.
Limiting the control obligation to voting rights or management control allows
for more flexibility with regard to the financing model of a company, while
allowing the control to be held by the professionals over the decisions which
may affect the quality of service, or to avoid some unwanted influences from
third parties. 
It
seems, however, that applying only voting rights/management position related
requirements without any imposing restrictions on shares, is rather limited. In
the majority of cases, the two or three requirements (majority shares, voting
rights, management position/membership of the Board) are applied concurrently,
which raises further doubts as to the proportionality of such combined
requirements.
2.5.3.     Control level thresholds 
It is
clear that while asking for majority shares to be held by professionals,
different levels of restrictions can be imposed. Only few Member States still
impose requirements to hold 100% of the capital and/or of voting rights. 
Austria
imposes an obligation for the professionals to exercise a decisive role in the
decision-making system of patent agency companies, without being subject to
instructions from or approval by other shareholders, and to hold 100% of voting
rights in veterinarian services companies. A 75% capital ownership requirement
exists in Slovakia for tax advisors, in France for veterinarians, though France reduced the minimum capital ownership requirement to 51% for most other professions.
Italy imposes an obligation on professionals to hold such a participation in the share capital as to determine
a 66.6 % majority in the
deliberations or decisions of shareholders,
no matter the service activity but allows that the voting rights be held by any
regulated professionals, irrespective of the type of activity. 
The
most common requirement, however, is to have 51 % of capital and voting rights to
be held by the professionals. 
With
51% being sufficient to control the day-to-day activity of a company, it is
quite difficult to understand the rationale for a 100% holding requirement, be
it for shares or voting rights. This is all the more so since reforms have
taken place in several Member States, leading to the reduction of such
requirements. In comparison, 100% requirements seem unduly restrictive and
their proportionality is very difficult to demonstrate. The same reasoning
applies to all thresholds above 51%, such as 75% and 66.6%, though of course
with less force than in the case of 100% capital ownership and/or voting rights
requirements.
Minimum
capital and or voting rights thresholds should of course be considered in
conjunction with other requirements that may apply concurrently, such as the
obligation to control the management of the company. The combination of several
requirements having the same objective raises prima facie doubts about
proportionality.
2.5.4.     Majority requirements vs. incompatibility rules 
As
mentioned above, requirements related to the majority of shares to be held by
professionals (natural or legal persons) of a given sector are mainly justified
by the need to avoid conflicts of interest /to ensure the independence and
impartiality of professionals and to ensure the quality of
the professional service. 
Where
needed, however, the independence of professionals can be achieved via rules on
the joint exercise of certain professions/activities.  Article 25 of the
Services Directive provides that restrictions on multidisciplinary activities
can be applied to regulated professions as long as they are justified to
guarantee the compliance with the rules of professional ethics and conduct,
which may vary from one profession to another. In addition, such restrictions
should be necessary to ensure the independence and impartiality of the
profession. 
The
peer review showed that some Member States make use of restrictions on joint
activities, defining in legislation which activities could or could not be exercised
jointly.  For example, in Belgium, Greece, Denmark, France and Spain, veterinarians may not associate with companies distributing medicines and sanitary
products. In Austria, architects cannot have multidisciplinary activities with
construction related businesses.
This
approach is less restrictive on establishment than controlling shareholding
requirements. Indeed, incompatibility rules will specifically target conflicts
of interest or situations which would put the independence of the professionals
at risk and thereby entail a possible risk for service recipients. Unlike stringent
majority shareholding requirements, such a targeted approach does not exclude
all forms of multidisciplinary associations.
2.6.        Tariffs
in the EU
The
peer review confirmed the conclusions of the 2011 report on the mutual
evaluation process, i.e. that most Member States either did not have fixed
tariffs or they abolished them when implementing the Services Directive. This
said, compulsory tariffs continue to exist in a limited number of Member
States, in particular for professional services. 
The focus
of the peer review was on fixed minimum tariffs as maximum tariffs were
identified in very few cases and on the same five professions as for legal form
and shareholding requirements.
Fixed
tariffs for architectural services seem to apply only in Germany. Minimum and maximum rates apply for certain architectural services, which are
considered to be indispensable for the proper execution of the contract, but it
is possible to agree to deviate from them. The Bulgarian Chamber of Architects
and the Greek Economic Chamber provide an indicative method for the calculation
of prices to be charged for architectural services. Professional Chambers in Slovenia, Slovakia and Liechtenstein also issue recommended rates. 
Tariffs
for tax advising services exist in Cyprus where minimum tariffs apply in the
absence of an agreement to the contrary between the parties. In Germany, minimum tariffs apply and the parties to a contract for tax services can only
agree a price that is higher than the minimum rate set by the Federal Ministry
of Finance. Recommended tariffs are also in force in Liechtenstein and the
Slovak professional chamber issues recommended tariffs. 
In Poland, the Ministry of Justice (after consultation with the professional bodies) sets
compulsory minimum tariffs for patent attorney services. In Slovakia, the Industrial Property Office gives guidance on the various aspects of tariff
settlement.
As
regards veterinarian services, a general system of fixed tariffs applies in Austria, and binding minimum fees apply in Bulgaria, without any possibility in either Member State to deviate from them by contractual agreement. In Germany, there are minimum
and maximum tariffs with the option to deviate from them subject to prior
written agreement. There is also possibility to apply different tariffs for the
long-term care of close herds. In Estonia and Slovenia, the professional bodies
set recommended minimum rates.  
No
tariffs apply to accounting services, except in Liechtenstein where recommended
tariffs exist.
              2.6.1. Effect
of fixed tariffs on establishment
Restrictions
in respect of fixed tariffs have an impact in respect of establishment, by
depriving service providers of the possibility of competing on price or on
quality. This restriction renders establishment (either principal or secondary)
in a Member State less attractive because new entrants cannot attract consumers
by offering lower prices (in case of fixed minimum tariffs) and would be
discouraged from offering higher quality services (due to fixed maximum tariffs).
Though not compulsory, 'recommended tariffs' could lead in practice to the same
effect as compulsory tariffs, certainly when applied in the context of
cross-border provision of services. 
              2.6.2. 
Public interest reasons invoked by the Member States
The few
Member States which maintain fixed tariffs justify them by a need to ensure
consumer/ service recipient protection. In case of minimum tariffs, such
protection would be derived from either a higher quality of service that a
minimum tariff would ensure. Maximum tariffs would arguably prevent service
providers from charging unjustified fees in cases when consumers are limited in
their choice because of the limited number of players on the market.
Nevertheless,
other Member States that do not have such tariffs or have abolished them
contested the fact that fixed minimum tariffs would ensure high-quality of
services, while at the same time such requirements clearly deprive consumers of
more competitively priced services.
              2.6.3. Divergent
application of the proportionality test
Article
15 of the Services Directive imposed on Member States a three-stage
proportionality test for tariffs, as explained above under section 2.4.1.
Similarly
as for legal form and shareholding requirements, the analysis of the need for
high quality of services needs to be assessed in line of the risk to which the
provision of low quality services would expose consumers/service recipients.
It is
however not always clear how such compulsory tariffs would necessarily lead to
better quality for the benefit of the consumers. Several Member States did not
have such tariffs in place to begin with so no proportionality test needed to
be performed. Other Member States considered that compulsory tariffs do not
ensure consumer protection and proceeded to abolish such minimum tariffs. In
particular, Spain, Greece, Italy, and Malta abolished fixed tariffs (and/or the
ability for professional orders to set fixed tariffs). Some other Member States
indicated they suppressed some of the applicable tariffs (e.g. architects in Belgium, veterinarians in Romania). 
In
respect of those Member States that maintained them, no information was
provided in respect of alternative, less restrictive measures which would have
been considered for meeting the public interest objective at stake.
In
particular, a general assessment of the global environment in which
professional activities take place should have been performed. In this respect,
general competition rules ensuring a functioning market, general contract rules
prohibiting abusive tariffs, professional rules and the proper information of
consumers would be sufficient to protect the consumer. 
Moreover,
as explained above, tariffs requirements should be considered in conjunction
with other concurrent ones, such as legal form and shareholding, which Member
States justify by similar objectives. The combination of several requirements
with the same objective raises prima facie doubts about proportionality 
3.           Conclusions
Legal form
and shareholding requirements can make the setting up of subsidiaries
impossible in practice. The restrictions apply both to primary and secondary establishment,
i.e. to the setting up of a business and to the setting up of subsidiaries,
which is the most common form of secondary establishment. Both legal form and
shareholding requirements have a negative impact on establishment. 
Legal
form requirements will be particularly restrictive when the capital must be
held by individual professionals and only professional companies may provide
the service. In such cases, professional companies from other Member States
will not be able to set up secondary establishments at all. Such obstacle means
that there are sectors of the economy where freedom of establishment is heavily
restricted.
Shareholding
requirements per se do not make establishment impossible. But the requirement
that professionals must hold a controlling stake makes the creation of
multi-disciplinary professional companies difficult or even impossible. The
higher shareholding requirements are, the more they restrict establishment.
Though further evidence of the precise economic and practical impact of such
requirements would be beneficial, it is clear that they limit the choice of
financial and business models for companies and thereby can hamper service
innovation, have adverse consequences on service prices, and a negative effect
on the competitiveness of such services.
In
light of the importance of professional services for the economy, structural
reforms in this field could continue to be addressed in the European Union via Country
Specific Recommendations to Member States, together with a closer monitoring of
their implementation. The most restrictive requirements on legal form and
shareholding, such as 100% capital ownership requirements and sole practice
obligations, for their part, could be best addressed with the Member States concerned,
possibly leading to infringement proceedings. 
While
Member States screened their legislations as part of the 2010 Mutual Evaluation
and several relaxed their rules, the peer review showed that they do not seem
to have carried out a thorough proportionality assessment of legal form and
shareholding requirements. The Commission, therefore, could work with Member
States to ensure that they a carry out systematic and robust proportionality
assessments in areas where the peer review has shown they are needed. In
addition, the cumulative impact of requirements could be usefully addressed in the
context of the forthcoming mutual evaluation of professional qualifications.
Similarly, the knowledge of those regulatory systems which do not impose legal
form and shareholding requirements and their possible impacts on the freedom of
establishment should be deepened.
As a
longer term action, a policy reflection should be launched on the steps which
would be required to ensure the freedom of establishment of companies providing
professional services in the Single Market, in particular in cross-border
situations. 
Fixed
tariffs, in general, and compulsory minimum tariffs, in particular, are serious
restrictions to the establishment of service providers. They also negatively
influence consumers’ choice and reduce competition on a market. It is highly
questionable to what extent imposing minimum tariffs ensures a high quality of
services. Member States do not seem to have analysed the proportionality of
this type of requirement in professional services, in particular where other
restrictions cater for the same public interest objective. Fixed tariffs only
remain in few Member States and, therefore, could be usefully addressed
bilaterally with the Member States concerned. 
ANNEX 
Summary of work in clusters per profession
1.           Accountants
1.1       Business context
The Commission selected
accountancy services as an activity for discussion because of its particular
importance to SMEs. 
Accountancy service
providers may be qualified accountants or unqualified accountants depending on
the Member State. Apart from large accounting firms, accountancy service
providers are often SMEs themselves. In certain instances, they seek cross-border
growth; this is particularly pertinent in instances where they want to
accompany their existing ‘home’ clients when the latter grow and also where
they themselves believe that they can be competitive in other Member States. 
Businesses, mainly
SMEs, often do not have the resources needed for day to day accounting and
bookkeeping. Entrepreneurs drive the business and need to focus on running the
business.
Given that accounting
and bookkeeping are indispensable needs of SMEs, it is important for them to
obtain these services at a reasonable cost.
1.2.      Scope
To avoid confusion
between accountancy services and audit services it is important to note that
accountancy services cover accounting and bookkeeping and include:
•                    
the recording of revenues and expenses;
•                    
the preparation of monthly, quarterly and annual
accounts;
•                    
maintenance of  'ledgers' (lists of sales,
expenses, debtors, creditors).
Audit on the other hand
is a statutory requirement that entails the examination of the accounts by an
independent third party. 
According
to the recently adopted Accounting Directive[5], which primarily applies to
undertakings with limited liability, a statutory audit is only required for
public interest entities (listed companies, credit institutions and insurance
undertakings), large and medium-sized undertakings. This statutory audit can
only be carried out by an approved statutory auditor or registered audit firm
approved by the competent authorities of a Member State as provided for in the
Statutory Audit Directive.[6]
Whereas accountancy
services can be provided by qualified as well as unqualified accountants, audit
can only carried out by qualified auditors.
Note: in certain Member
States auditors are referred to as (Chartered) Accountants. Although the latter
can also prepare accounts, for SMEs they would generally be more expensive than
'non-qualified' accountants.
It is, therefore,
important to make a distinction between audit services on the one hand and
accountancy and bookkeeping services on the other. Member States have to ensure
that the distinction is clear, especially for SMEs; the latter are the largest
users of ‘external’ accounting services. 
1.3.      Regulation
The general approach to
regulation varies in that accounting and bookkeeping (as opposed to audit) are
regulated in some Member States while not in others:
•                    
The Czech Republic, Malta, Norway, Belgium, Greece, Hungary, Italy, Austria, Luxembourg, France and Romania regulate the
accounting professions. 
The differences in
regulatory approaches essentially stem from:
•                    
The clear distinction between auditing and
accounting;
•                    
The different perceptions with regard to
independence, quality and verification.
Certain Member States
do not see the need for independence as such services essentially comprise the
outsourcing of internal functions. Also, a service provider is in any case
bound by accounting standards, which the accounts will have to comply with.
Moreover, if the service provider delivers a poor service the relationship could
in any case be discontinued.
The need for regulating
a function for which the ‘client’ bears eventual responsibility combined with
the fact that unqualified accountants have been providing these services in
various Member States for some time now raises the need for examining the level
of regulation, if any, necessary to protect public interest. The ‘public’ would
at least include the client, the service provider and the reader of the
accounts and it may be the opportunity to determine what the costs/benefits of
the approaches are. 
Other Member States
believe that a qualification, voluntary or obligatory, is an indication of
quality. Some specific examples of the level of regulation in Member States
are:
•                    
Malta's regulations for
'accountancy firms' are quite close to those for 'auditors' and there are
restrictions on the use of the name and voting rights.
•                    
In Belgium, Italy and France, there are
restrictions on the legal form and / or the shareholding.
As mentioned earlier,
we must avoid confusion with restrictions that are placed on auditors in this
regard. It is also worth noting that the Statutory Audit Directive currently in
force does not place any restriction on legal form, although it allows Member
States to have stricter requirements.
In view of the above,
it is quite important, from the Commission's perspective, to consider the
proportionality of the legal form and shareholding requirements for accountancy
services. 
1.4       Legal
form and shareholding requirements
In the Netherlands, the majority of shareholding
must be held by accountants (the legislation in the Netherlands focuses on the
statutory auditors, thus a link with statutory audit directive 2006/43/EC). In
the Czech Republic, a requirement limits the possibility for one individual to
be the sole shareholder of a maximum of three limited liability companies. 
Belgium
imposes also legal form requirements: only a ‘professional company’ can provide
the services. As regards voting rights requirements, professionals (natural
persons or ‘professional companies’ for ‘comptable agréé’) must hold the
majority of the voting rights in Belgium and 66.6% in Italy (any professional registered with a professional order). In addition, Belgium provides that the board of the company must be controlled by the professionals.  
In
Malta, voting and management requirements (more than 50% of the voting rights
must be hold by accountants, accountants account for more than 60% of
the company's administrative and management bodies) are imposed but this is not
the case for shareholding requirements. Accountancy services can be provided by
the companies no fulfilling this requirement, but they cannot use the title
“Certified Public Accountancy Firm”.
1.5       Reasons of public interest
As
regards public interest objectives in the regulation of accountants, Member
States mentioned during the peer review the need for consumer protection,
independence of the profession and quality of service, avoidance of tax fraud
and money laundering, as well as professional secrecy. 
2.           Architects
2.1       Regulation
Architects
are a regulated profession in practically all Member States. Some Member States
regulate only a certain type of architectural services or use of a specific
title (e.g. Slovenia, Romania, and Denmark). In a number of Member States
(Finland, Sweden, Norway, Netherlands) architects are not a regulated
profession and in some of the Member states (Norway, Sweden, the Netherlands)
the necessary checks are carried out by public authorities, for example, upon
submission of building plans. In Denmark and the Netherlands, the title of an
architect is protected without any reserve of activity.
2.2       Legal
form requirements
Legal
form requirements exist only in Croatia (only sole practice and
partnerships are allowed). Other Member States allow for all legal forms
available under national law. In some cases, there are limitations for exercise
in practice for commercial companies.  A couple of Member States used to have
legal form requirements but have abolished them. This is the case notably for Cyprus and Greece.
2.3       Shareholding
requirements
There
is a difference between cases where requirements apply to all forms of
companies and cases where these are applied only to "professional"
companies/companies with a reserved title. Member States where shareholding
requirements are applied to all legal forms include Austria (100% of shares by
natural or legal persons), Cyprus (100%), France (more than 50% of shares and
voting rights to belong to natural or legal persons qualified as professionals);
in Ireland, the requirement of "the control and management to be held by a
registered person or persons" could amount in practice here too to a 100%
requirement; Italy imposes upon professionals to hold such a participation in the share capital as to determine a 66,6 % majority in the deliberations or decisions of
shareholders (any professional); Slovakia (majority
of shares); Netherlands (majority of board).
Shareholding
and voting right requirements are applied only in Belgium to professional/civil
companies called "sociétés d'architecture" (60% owned and
controlled by professionals as natural persons), while for commercial forms,
the requirement to have the majority of shares applies in Bulgaria (‘design
office’, minimum 50% of the capital held by professionals), in Czech Republic
(majority in limited liability companies to be held by professionals), in Germany
if the title "architect" is used in the company's name (majority of
shares to be held by professionals), in Spain (for professional companies 51%
of voting rights and capital to be held by professionals), in Malta (only sole
practitioners or professional partnerships).
2.4       Shareholding
by professionals from other Member States
There
seem to be no clear restrictions in the majority
of cases as the same rules apply to professionals from other Member States and
to domestic ones. In order to fall into the percentage of capital to be held by
professionals, shareholders must have their qualifications recognised. If
shares are held by professionals from other Member States as non-professionals
(no recognition of professional qualifications), they fall under the
percentage open to third parties. In Member States where no shareholding and/or
voting right requirements are imposed, the main requirement seems to be to have
at least one professional (in a commercial company) either employed or mandated
by the company in order to carry out the activity that is regulated.
2.5       Subsidiaries
and branches
Often
no clear distinction is made between secondary
and primary establishment and mainly the same rules as for domestic/primary
establishment apply to subsidiaries and branches. Some exceptions of
clear distinction exist for example in Germany and Slovakia.
2.6       Reasons
of public interest
All
the Member States invoke mainly the same overriding reasons of public interest,
such as the independence of profession, the quality of the service, consumer
protection/protection of recipient of service. They are achieved via different
approaches, which are roughly the following:
·                   
Prior control of qualifications, regulating the
ownership and legal form;
·                   
More market oriented approach, often relying on
self-regulation and voluntary associations (acting as quality filter);
·                   
Reliance on checks done by public authorities.
3.           Patent
agents
3.1       Regulation

Patent
agents are a regulated profession in many Member States. However, it is not a
regulated profession in Sweden, Iceland and the UK (in these three countries
the use of the title is protected), Denmark, Greece and Norway. In Cyprus and
Malta, the patent agent profession is not a profession by itself and patent
agent services are usually provided by lawyers.
3.2       Scope

The
activity of filing patents on behalf of others is reserved to patent agents in
Austria, Belgium, Bulgaria and the Czech Republic (lawyers or certain lawyers
are allowed to carry out the activity too), Germany (shared with lawyers),
Estonia, Spain, France, Ireland, Hungary, Italy, Lichtenstein, Lithuania,
Luxembourg, Poland, Portugal, Romania, Slovenia, Slovakia and Croatia. In
Cyprus, the activity is reserved to lawyers.
In
Belgium, Spain and Latvia, non EU-residents (and non-nationals in Latvia)
cannot file themselves their patent application and need to do so through a
patent agent. In Iceland, non-residents must use a patent agent that can be
registered anywhere in the EEA.
3.3       Legal
form requirements
In
general, there are no legal form requirements with the exception of Belgium and
Bulgaria where only sole practitioners are allowed (Bulgaria has announced
plans to allow legal persons to operate).
Cooperative
societies cannot be used in the Czech Republic (this is subject to change). In
Germany, commercial partnerships cannot be used (a general rule for all liberal
professions). In Cyprus, the legal forms accessible for lawyers would need to
be respected. In Croatia, there is an establishment requirement together with a
legal form requirement. 
3.4       Shareholding
requirements
In
Austria, 100% of capital must be held by professionals, whereby former patent
agents, their spouses and children are also allowed to hold capital.
Professionals must be registered with the professional order. In Italy, the number of professionals (registered with any
professional order) and their participation in the share capital must be such as to determine a 66,6 % majority in the deliberations or decisions of
shareholders. In Germany, 51% of the shares and the
majority of voting rights must be held by patent agents and shares must not be
held for a third party. 
In
Poland, in limited liability companies and joint stock companies, the majority
of shares should be owned by patent agents. They should also hold the majority
of voting rights and be in majority in the supervisory board. In France, 51% of
capital and voting rights should be held by professionals registered at the
order. In Liechtenstein, the majority of the shares and of the voting rights
must belong to EEA nationals.
Spain
applies the majority rule for shareholding and voting rights only when
professional companies are used for the provision of the service. This legal
form is optional. In a professional company, the qualifying percentage of
shares must be held by 'active practicing professionals' as the objective is to
secure their professional engagement in the company.
3.5       Multidisciplinary
activities and secondary establishment
It
seems that Austria is the only Member State applying restrictions to
multidisciplinary activities by patent agents. In Austria, there is a total ban
on any other activity. 
In
Austria, professionals from other Member States can only act as sole
practitioners. In case of setting up of a subsidiary or a branch of a company
established in another Member State, national rules on shareholding would need
to be respected in Germany and Poland. Spain "recognises"
professional companies from other Member States.
3.6       Public
interests at stake
The
public interests at stake identified by Member States are the protection of
consumers, the support to innovation and ensuring correctness of proceedings.
Sweden indicated as a public interest, the credibility of professionals when
providing services outside the country. There are very different degrees of
regulation and restrictiveness in the various Member States.
4.           Tax
advisers
4.1       Scope
It is important that
Member States define tax advisory services as a service distinct from audit and
legal advice. The potential is vast, especially for expansion in other Member
States as tax compliance regarding payroll, VAT and income tax for SMEs
throughout the EU is indispensable. 
To avoid confusion
between tax services on the one hand and audit and legal services on the other
it is important to note that tax services cover:
·                        
The preparation of the tax computation /
calculation,
·                        
Preparation of VAT returns,
·                        
Preparation of payroll,
·                        
Acting on behalf of the client before the tax
authorities as the client's 'tax agent'.
In 'established'
businesses, these functions are performed by in-house experts. But for smaller
businesses this is done by an external service provider. It is worth noting that
often for small businesses both accountancy and tax services may be carried out
by the same service provider.
For the purposes of
this discussion, we remain focussed on the needs of SMEs and not on complex tax
structuring and advice, which is a business in itself. In some countries there
is the possibility to qualify as a tax adviser independently of being an
auditor or even a lawyer. For the purpose of the peer review discussions, we
are excluding auditors and lawyers who provide tax services. 
It is important for
SMEs to appreciate and recognise that for their day to day requirements they
are not obliged to go to qualified accountants / lawyers; this would avoid the
higher fees that such qualified professionals would charge.
4.2       Regulation
Tax advisors (as
opposed to auditors and lawyers) are regulated in some Member States while not
in others:
·                   
Cyprus, Liechtenstein, France and Luxembourg
reserve the activity for certain regulated professions. 
·                   
The Czech Republic, Germany, Poland, Croatia,
Hungary, Greece, Austria, Portugal (specifically for tax returns), Slovakia,
and Romania regulate tax advisors (who are neither lawyers nor auditors). 
The differences in regulatory approaches of Member States
essentially stem from:
·                   
The clear distinction between audit, legal
advice and tax advice;
·                   
The different perceptions with regard to
independence, quality and verification.
Certain Member States
do not see the need for independence as such services essentially comprise the
outsourcing of a function that is after all the responsibility of the business
entity. Also, a service provider is in any case bound by tax laws, which the
tax returns, calculations and computations have to comply with. Moreover, if
the service provider delivers a poor service the relationship could in any case
be discontinued.
4.3       Legal
form and shareholding
The divergent
perceptions in different Member States towards the activity have resulted in
different approaches:
·                   
Cyprus, Liechtenstein, France and Luxembourg
apply requirements on the professions for whom the activity of tax advice is
reserved. 
·                   
In Germany, Poland, Belgium, Italy, Slovakia,
Austria there are restrictions on legal form and / or the shareholding.
Portugal has restrictions deriving from the use of a professional company (for
the preparation and submission of tax returns).
·                   
The main differences in approaches appear to
stem from different perspectives on where the responsibilities lie (with the
business itself or with the tax advisor).
·                   
Certain Member States believe that reserving or
regulating tax advice enhances the quality and reliability of the tax
calculations. It is not clear what the position is if the tax return is
prepared in house by an in-house tax expert.
·                   
To examine the case for continuing regulation it
may be worth considering if the regulation of tax advice improves tax control
and if Member States that do not regulate 'suffer' in this regard with regard
to the assessment and verification of tax calculation.
4.4       Public
interests at stake
There
are two very different models regarding the public objectives. Tax advice is
not regulated in certain Member States (e.g. Netherlands) since it's the
client's responsibility to decide if he wants a qualified professional and to
face potential consequences. The main interest of working with tax specialists
is minimizing taxes. On the contrary, in other Member States (e.g.
Germany) tax advisers are a liberal profession in charge of public policy
objectives: respect of fiscal regulation and prevention of tax evasion. 
5.           Veterinarians
5.1       Regulation
Veterinary
surgeon is a regulated profession in all Member States. 
The
regulatory approaches are less restrictive in some Member States than in others.
Restrictions on legal forms and shareholding requirements are not the most
common approach followed by Member States. Many Member States rely on other
means to fulfil the objective of protecting public health and in particular on
deontological rules, veterinary legislation and controls exercised by the
national veterinary services. 
In
general, national rules apply to branches and subsidiaries. In some cases this
prevents the opening of a branch or a subsidiary or makes it very difficult.
5.2       Legal
form requirements
Legal
form requirements apply in some Member States. These requirements are more or
less stringent: 
·                   
sole
practitioner (Liechtenstein – but reforms are envisaged),
·                   
professional
companies (Italy, France, Luxembourg),
·                   
in
Germany, different legal form requirements exist in different Länder: e.g in
Bavaria and Berlin, veterinarians can only practice as sole practitioners,
whereas in other Länder, veterinarians can practise as legal persons under
private law. 
Considerable
legislative changes have taken place recently in Greece, where a requirement to
practice as sole practitioner only has been replaced by the right to set up any
form of company, without any restrictions on shareholding. A reform is on-going
in Liechtenstein and is envisaged in France. A debate has started in Germany.
5.3       Shareholding,
voting rights and management requirements
Capital
ownership requirements apply in some Member States where professionals are
required to hold a percentage of the capital. This percentage differs:
Luxembourg 100%, France 75%, Spain 51% (of both capital and voting rights in
‘professional companies’) and some German landers 51%. In Italy, the number of professionals and their participation
in the share capital must be such
as to determine a 66,6 % majority
in the deliberations or decisions of
shareholders (but any category of regulated professionals
could hold shares).
In some
cases, these professionals must be active in the company (e.g in
Mecklenburg-Vorpommern in Germany). In some Member States, some professions are
banned from participating in the capital of veterinarian practices. For
instance, this is the case in France for companies distributing veterinary
medicines and farmers. 
In some
other Member States, no shareholding requirements apply but voting rights and
management requirements do (e.g. Sachsen in Germany). In Austria, veterinarians
must hold 100% of voting rights.
5.4       Limitations
on the number of practices and on multidisciplinary activities
In
Liechtenstein and Portugal limitations seem to exist regarding participation in
more than one veterinary practice. In Portugal, a veterinarian can only
participate in another practice if his partners in the first practice agree. 
Multidisciplinary
activities are considered an asset in some Member States and a danger in some
others (e.g. vets/training of dogs, vets/grooming, vets/pet shop, vets/pharmacy).
In France, in Spain and in some German Länder, it seems that there is a
complete ban on any multidisciplinary activities. 
In
other Member States, there are targeted bans on certain multidisciplinary
activities. For instance, in Belgium, Greece and Denmark, sale, manufacturing
and distribution of veterinary medicinal products cannot be performed jointly
with a veterinarian practice; in Germany, in some Länder, a positive list of
possible joint activities exist (e.g. Baden-Wurttemberg, Berlin, Brandenburg,
Bremen). In some Member States, an authorisation seems to be required before
some joint activities can be performed (e.g. Belgium, Italy and Croatia).  
5.5       Public interests at stake
The
public objective pursued by this regulation is the protection of public health.
Member States also identified animal health, independence of veterinarians, the
quality of veterinary services and safety and quality of food as reasons in the
public interest which may justify regulating the exercise of the profession.
[1] http://ec.europa.eu/internal_market/services/services-dir/implementation/implementation_report/index_en.htm
[2] "Communication on the implementation of the Services
Directive: A partnership for new growth in services 2012-2015". COM (2012) 261 final
  http://ec.europa.eu/internal_market/services/docs/services-dir/implementation/report/COM_2012_261_en.pdf
[3]  http://ec.europa.eu/internal_market/qualifications/regprof/index.cfm
[4] The
criteria defined in Article 15(3) of the Services Directive
(non-discrimination, necessity, proportionality) are the same as those set out
in Article 59 of the proposed Professional Qualifications Directive. Article
15(3) of the Services Directive applies them to several conditions for access
to and exercise of the professional activity, while Article 59 of
the Professional Qualifications Directive provides for a new transparency and
mutual evaluation which will cover restrictions pertaining to the requirements
to become a qualified professional and be recognised as such (qualification
requirements and related reserved activities). 
[5] Directive 2013/34/EU of
the European Parliament and of the Council of 26 June 2013 on the annual
financial statements, consolidated financial statements and related reports of
certain types of undertakings, amending Directive 2006/43/EC of the European
Parliament and of the Council and repealing Council Directives 78/660/EEC and
83/349/EEC (OJ L 182, 29.6.2013, p. 19).
[6] Directive 2006/43/EC of the European Parliament and of the Council
of 17 May 2006 on statutory audit of annual accounts and consolidated accounts (OJ
L 157, 9.6.2006, p. 87).