COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a Directive of the European Parliament and of the Council on the legal and operational framework of the European services e-card introduced by Regulation ....[ESC Regulation]....
Date: 2017-01-10
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
Subjects: Internet, administrative formalities, application of EU law, expatriate worker, freedom to provide services, information system, professional qualifications, provision of services, service, single market

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 10.1.2017  SWD(2016) 437 final   COMMISSION STAFF WORKING DOCUMENT  IMPACT ASSESSMENT  Accompanying the document Proposal for a Directive of the European Parliament and of the Council on the legal and operational framework of the European services e-card introduced by Regulation ....[ESC Regulation].... {COM(2016) 823 final} {SWD(2016) 438 final}  
 
 
Contents 
1.  Context and background .................................................................................................... 4 

1.1 The Services Directive ..................................................................................................... 5 

1.2 Scope of the impact assessment – sectors covered .......................................................... 6 

1.3. Scope of the impact assessment – horizontal issues ..................................................... 11 

2.  Problem definition ........................................................................................................... 11 

2.1.  What is the problem and how important is it? .......................................................... 11 

2.2.  Problem drivers ......................................................................................................... 13 

2.2.1.  Driver 1 – Uncertainty and administrative complexity faced by service providers 
when going cross-border ................................................................................................. 15 

2.2.2.  Driver 2 – Lack of well-structured cooperation mechanisms under the Services 
Directive .......................................................................................................................... 21 

2.2.3.  Driver 3 - Insurance coverage in cross-border situations .................................. 25 

2.2.4.  Driver 4 – National regulations in key business services with negative spill-over 
effects to other sectors ..................................................................................................... 26 

2.3.  How would the problem evolve, all things being equal? ......................................... 30 

3.  Need for action at EU level ............................................................................................. 31 

3.1.  Legal base for the EU to act ..................................................................................... 31 

3.2.  Value-added of action at EU-level ........................................................................... 31 

4.  Objectives ........................................................................................................................ 32 

4.1.  Policy objectives ....................................................................................................... 32 

4.2.  Consistency with other EU policies and the Charter for fundamental rights ........... 33 

5.  Policy options .................................................................................................................. 34 

5.1.  Baseline scenario: No EU policy change ................................................................. 34 

5.2.  Overview of different policy options ........................................................................ 34 

5.3.  Description of policy options ................................................................................. 35 

5.3.1. 

Policy option 1: European services e-card attesting legal establishment ......... 35 

Policy option 2A: A European services e-card for a more ambitious 

5.3.2. 
administrative simplification ............................................................................................. 38 

5.3.2.1. 

A European services e-card for temporary cross-border provision ............... 41 

5.3.2.2. 

A European services e-card for secondary establishment .............................. 44 

5.3.2.3. 

Technical facilities linked to secondment of staff ........................................... 47 

Policy option 2B: Action to address regulatory obstacles for providers in key 

5.3.3. 
business services wanting to set up cross-border branches and agencies ....................... 49 

5.3.4. 

Policy option 3: Facilitate access to insurance in a cross-border context ......... 51 

2 

 
 
5.3.5. 

Policy option 4: Harmonisation of requirements for key business services ....... 52 

5.4.  Combinations of policy options ("packages") ....................................................... 54 

6.  Analysis of impacts ......................................................................................................... 55 

6.1.  Baseline scenario: No EU policy change ................................................................. 55 

6.2.  General considerations on the packages to be assessed ........................................... 55 

6.3.  Package 1: Policy options 1 and 3.1a ....................................................................... 61 

6.4.  Package 2: Policy options 2A and 3 ......................................................................... 64 

6.5.  Package 3: Policy options 2A, 3 and 4 ..................................................................... 69 

6.6.  Package 4: Policy options 2A, 2B, 3 and 4. ............................................................. 71 

7.  Comparison of packages ................................................................................................. 74 

7.1.  Comparison in terms of effectiveness, efficiency and coherence ....................... 74 

7.2.  Choice of preferred package .................................................................................. 75 

7.3.  Choice of legal instrument ...................................................................................... 77 

7.4. 

Subsidiarity and proportionality of the options ................................................... 78 

8.  Monitoring and evaluation .............................................................................................. 78 

Annexes 

Annex 1: Procedural information (pg. 78) 

Annex 2: Stakeholder consultation (pg. 81) 

Annex 3: Who is affected and how? (pg. 99) 

Annex 4: Evaluation (pg. 101) 

Annex 5: Problem definition – additional evidence (pg. 133) 

Annex 6: Consistency with other EU policies (pg. 164) 

Annex 7: Administrative burden reductions under the different policy options (pg. 166) 

Annex 8: Administrative costs for authorities (pg. 196) 

Annex 9: Impact of addressing regulatory obstacles in business services (pg. 211) 

Annex 10: Choice of legal instrument (pg. 218) 

Annex 11: Monitoring and evaluation (pg. 219) 

3 

 
 
 
 
 
1.  Context and background 

One of the 10 political priorities put forward by the Juncker Commission is to enable a deeper 
and fairer Internal Market. This includes improving the functioning of the internal market in 
services, making it a launch pad for our companies to thrive in the global economy while at 
the same time ensuring less abuse or circumvention of rules.  Furthermore, one of the pillars 
of the Investment Plan for Europe consists in further reinforcing the Single Market.  

Articles 49 and 56 of the TFEU provide for basic fundamental freedoms of establishment and 
temporary cross-border provision of services across the internal market. Secondary legislation 
has, over the years, strived to implement these freedoms. This includes the Services Directive1 
which has become a cornerstone to put into practice the fundamental freedoms of the Treaty.    

Since  its  adoption  in  2006,  the  Services  Directive  underwent  a  period  of  implementation  in 
partnership  between  the  Commission  and  all  the  Member  States.  The  Commission  did  not 
limit  its  efforts  to  supporting  Member  States  until  the  transposition  deadline  in  2009.  It 
undertook numerous additional efforts, notably on the basis of Communications in 2011 and 
2012, to  encourage  Member States to  continue implementing  the Directive through national 
reforms.  These  efforts  have  also  been  supported  under  the  European  semester  policy 
according 
the  Council  agreed  country  specific 
recommendations.   

the  Commission  and 

to  which 

Since  the  autumn  of  2014,  the  Commission  has  been  carrying  out  a  range  of  analyses  and 
stakeholder  consultations  to  analyse  the  impact  of  the  implementation  of  the  Services 
Directive. These show that despite some progress, a genuine internal market for services is far 
from being achieved. Instead, service providers in several important sectors still face a range 
of  obstacles  when  expanding  cross-border.  Annex  4  (evaluation)  confirms  this  conclusion 
based on an in-depth evaluation of the implementation of the Services Directive. 

Out of the total identified potential for growth offered by the Services Directive (2.6% of EU 
GDP increase) only 0.9% has been captured so far – leaving 1.7% of additional GDP growth 
unexploited.2 This is a missed opportunity. Remaining obstacles hinder an efficient allocation 
of resources thereby slowing down the modernisation of the EU economy.  

For this reason, the Commission in its Single Market Strategy adopted on 28 October 20153 
announced  three  initiatives  building  on  the  Services  Directive  with  a  particular  focus  on 
business services and construction services:  

  Legislative initiative introducing a services passport4; 

1 Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on Services in the 
Internal Market 
2 European Commission, "Update on the study on the economic impact of the Services Directive", 2015  
3 Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social  Committee  and  the  Committee  of  the  Regions,  "Upgrading  the  Single  Market:  more  opportunities  for 
people and business", 2015 
4  The  term  services  e-card  is  used  in  this  impact  assessment,  in  light  of  discussions  with  stakeholders  on  a 
suitable name for the initiative. 

4 

 
 
                                                 
  Legislative  action  to  address  regulatory  barriers  for  key  business  services  and,  if 

appropriate, organisational requirements in construction companies; 
If necessary, action on insurance requirements. 

 

1.1 The Services Directive 

The  Services  Directive  addresses  a  range  of  obstacles  to  free  movement  of  services  by 
requiring  Member  States  to  adopt  reforms  aimed  at  removing  or  reducing  them.5  These 
include regulatory  barriers but  also obstacles of administrative nature dissuading in practice 
service providers to operate cross-border. In addition, the Directive also touches upon quality 
related aspects of service provision such as standards (excluded from this impact assessment6) 
and insurance requirements.7 The provisions of the Services Directive most relevant for this 
impact assessment are shortly described below.  

Administrative simplification 

The  Services  Directive  requires  Member  States  to  reduce  administrative  burden  faced  by 
services  providers.  Firstly,  all  procedures  and  formalities  applicable  to  access  a  service 
activity and to the exercise thereof have to be examined by Member States and simplified if 
necessary (Art 5).  Secondly, points of single contact have to be set up, through which service 
providers  should  be  able  to  access  information  as  well  as  complete  all  procedures  and 
formalities needed for access to and exercise of their service activities (Art 6). Finally, fully 
functioning  and  interoperable  electronic  procedures  have  to  be  set  up  (Art  8).  Service 
providers should be able to complete at a distance all formalities necessary to provide a given 
service.  

Removing barriers to the freedom of establishment 

Firstly, Member States are required to review existing authorisation schemes and make them 
compliant with Articles 9 to 13 of the Services Directive. Secondly, Art 14 of the Directive 
provides a list of requirements ("blacklist") which Member States are not allowed to impose 
for access to or exercise of a service activity under any circumstances. Finally, Art 15 of the 
Directive  includes  a  list  of  requirements  ("grey  list")  which  are  only  allowed  if  non-
discriminatory, exceptionally  justified by a public interest and proportionate. These include, 
for  example,  obligations  on  a  service  provider to  take a  specific  legal  form  or  requirements 
which relate to the shareholding structure of a company.  

Removing barriers to the freedom to provide (temporary cross-border) services 

Articles  16  to  18  deal  with  requirements  Member  States  may  impose  on  service  providers 
who provide services cross-border on a temporary basis. Member States may not impose their 
own  requirements  on  incoming  service  providers  except  where  these  requirements  are  non-
discriminatory,  justified  by  reasons  of  public  policy,  public  security,  public  health  or  the 
protection of the environment and proportionate.  

5 Its provisions regarding establishment also impact purely national situations. 
6 See Single Market Strategy and Communication of 1 June 2016 on European Standards for the 21st century 
7 A more detailed description of the relevant provisions of the Services Directive is provided in annex 4 

5 

 
 
                                                 
Professional Indemnity insurance  

Article 23 concerns professional liability insurance and guarantees. A Member State may only 
impose  insurance  coverage  requirements  when  the  services  in  question  present  a  direct  and 
particular  risk  to  the  health  and  safety  of  the  recipient  or  a  third  person,  or  to  the  financial 
security  of  the  recipient.  In  addition,  the  Member  State  where  a  service  provider  wants  to 
establish  will  have  to  take  into  account  essentially  equivalent  or  comparable  insurance  or 
guarantee requirements to which the provider may already be subject to in the Member State 
of first establishment.  

Multidisciplinary activities  

Art  25  requires  in  principle  Member  States  to  remove  requirements  on  service  providers  to 
exercise a given specific activity exclusively as well as requirements restricting the exercise 
of different activities jointly or in partnership. Such requirements are only allowed in case of 
regulated  professions  as  well  as  for  providers  of  certification,  accreditation,  technical 
monitoring, test or trial services in so far as justified in order to ensure their independence and 
impartiality. 

1.2 Scope of the impact assessment – sectors covered 

The purpose of this initiative is to make it easier for service providers in a number of services 
sectors to expand their activities to other Member States. Introducing a European services e-
card would require some  additional efforts also of Member States' authorities.  Therefore, in 
order  to  ensure  a  meaningful  and  proportionate  action  there  is  a  need  to  focus  on  those 
services sectors where such an initiative would have most impact.  

The initial focus of the initiative would be on two specific services sectors: business services 
and construction. The following criteria were used as a basis for selection of these sectors: 

  The sectors are entirely covered by the Services Directive on which this initiative is 

building; 

  An important amount of obstacles to the Single Market still remain in both sectors; 
  There is potential for further single market integration; 
  The  sectors  represent  an  important  level  of  economic  activities  and  economic 

performance in both sectors shows difficulties. 

The sectors are entirely covered by the Services Directive on which this initiative is building 

Graph 1 below shows the different services sectors that are covered by the Services Directive 
(in  colour).  Accordingly,  a  number  of  services  sectors  are  not  covered  by  the  Services 
Directive.  

6 

 
 
 
 
 
Graph 1 – Sectors covered by the Services Directive 

Source: Eurostat, Commission analysis, 2013 

Firstly, a group of large sectors such as financial services, transport services, network services 
(including e.g. telecom services and energy services) and audio-visual services are excluded 
from the scope of the Services Directive. These sectors have more advanced harmonised rules 
at  EU-level  which  govern  their  functioning  in  detail.8  For  example,  the  financial  services 
sector has a proper regime in place regarding the functioning of its single market which takes 
into account specific challenges of the sector (such as the financial stability of banks). For the 
same  reason,  the  EU  has  developed  sector  based  policies  in  the  areas  of  energy, 
telecommunications and audio-visual services. Additional efforts have been made over recent 
years  to  further  harmonise  these  sectors,  including  introducing/strengthening  systems  of 
supervision.  Any  problems  in  these  sectors  related  to  the  single  market  (or  in  general 
competitiveness  and  growth)  are  better  dealt  with  in  the  context  of  these  sector-related 
policies/instruments. 

Secondly, other services sectors that are excluded from the Services Directive include health 
care, temporary employment agencies and transport. Other policies recognised in the Treaty 
play  a  major  role in  these  sectors  such  as  national  systems  of  health  care  (Art.  168  TFEU), 
social  protection  of  workers  of  temporary  employment  agencies  (Art.  153  TFEU)  and  the 
common  transport  policy  (Art.  90  TFEU).  Also  for  these  sectors,  the  EU  has  developed 
specific policies9 subject to proper evaluations and possible future initiatives.      

Thirdly, a final group of services excluded from the Services Directive concerns sectors such 
as  gambling,  social  services  mandated  by  a  Member  State,  notaries  and  private  security 
services. These are not governed by secondary legislation. Internal market integration for the 
provision of these services is governed directly by Treaty provisions. Regulatory disparity is 
very high in these sectors given that Member States enjoy a much larger degree of discretion 
when regulating these sectors at national level.  

8  For  this  reasons  also  travel  agencies  and  a  very  limited  number  of  business  services  (lawyers  and  statutory 
auditors) are excluded 
9  For  example,  social  protection  of workers of  temporary employment  agencies under Directive 2008/104/EC; 
Patients' Right Directive 2011/24/EU. 

7 

 
 
 
                                                 
Finally,  while  the  initiative  focuses  on  business  services  at  large,  three  specific  business 
service activities (testing and analysis, lawyers and statutory auditors) are excluded, given that 
the  freedom  to  provide  services  in  these  sectors  is  mostly  excluded  from  the  scope  of  the 
Services Directive, governed by sector-specific EU legislation10 some of which have recently 
been  subject  to  evaluation.  The  sector  of  statutory  auditors  has  furthermore  been  subject  to 
major  changes11  in  the  aftermath  of  the  financial  crisis.  Furthermore,  among  construction 
services, natural persons providing  services of installation, servicing, maintenance, repair or 
decommissioning of equipment that contains fluorinated greenhouse gases are also subject to 
sector-specific EU legislation and are excluded from the scope.12 

An important amount of obstacles to the Single Market still remain in both sectors  

For  those  sectors  covered  by  the  Services  Directive  an  in-depth  evaluation  of  its 
implementation  (see  annex  4)  shows  that  it  has  been  only  partially  effective  until  today. 
Whereas  in  some  services  sectors  (including  tourism  and  real  estate)  many  obstacles  have 
been removed through the implementation of the Services Directive, service providers in key 
services  sectors  still  face  an  important  number  of  barriers.13  This  explains  also  why  the 
Commission  has  over  recent  years  prioritised  regarding  the  implementation  of  the  Services 
Directive on certain services sectors including business services, retail and construction.14   

The Services Directive offers a harmonised framework for making better use of the classical 
single  market  freedoms  of  physically  providing  services  cross-border  or  setting  up  an 
establishment in  another  Member State. The key issues  for exercising these freedoms differ 
between  sectors.  Ensuring  a  proper  functioning  of  the  single  market  in  the  retail  sector 
requires  a  different  discussion  and  assessment.  Cross-border  service  provision  in  the  retail 
sector mostly concerns e-commerce activities, which give rise to a range of issues not covered 
by the Service Directive. In addition, permanent market entry in the retail sector is controlled 
by Member States in a very specific way (often through local planning rules which regulate 
opening  up  outlets  in  specific  locations).  The  Single  Market  Strategy  of  October  2015 
foresees accordingly a separate action for 2017 in order to facilitate retail establishment and 
reduce operational restriction in the sector. The retail sector will therefore not be covered by 
this impact assessment.   

There is potential for further integration in these sectors 

An important number of business services as well as the construction sector are showing low 
levels  of  internal  market  integration.  In  other  words,  very  few  service  providers  in  these 
sectors  provide  services  cross-border  or  set  up  a  secondary  establishment.  This  is  further 
discussed in section 2.1 (problem definition).  

10  See  for  testing  and  analysis  Regulation  (EC)  765/2008,  on  the  European  system  of  accreditation  and 
certification. See for lawyers Directives 77/249/EC ("The Lawyers' Directive") and 1998/5/EC ("The Lawyer's 
Establishment Directive). See for statutory auditors Directive 2006/43/EC.  
11 See Directive 2014/56/EC as well as Regulation 537/2014. 
12 See Regulation (EU) 517/2014, of the European Parliament and of the Council of 16 April 2014 on fluorinated 
greenhouse gases (OJ L 150, 20.5.2014, p. 195). 
13 European Commission, "Study on the economic impact of the Services Directive", 2012 
14 See for example European Commission, "Work plan for reporting on national reforms in services", 2014 

8 

 
 
                                                 
The  potential  for  further  integration  of  the  EU  business  services  market  is  widely 
recognised.15 Regarding the construction sector, in their joint letter of 22 November 2016, 10 
Member  States  identified  this  sector  as  one  of  the  priority  sectors  where  this  initiative  can 
bring  about  the  greatest  economic  benefit.  On  the  other  hand,  several  stakeholders  have 
highlighted  in  the  public  consultation  (annex  2)  that  construction  is  a  local  business  with 
limited potential for more cross-border activities. For some construction services, temporary 
cross-border provision of services by SMEs is indeed complicated, also given the importance 
of local networks of suppliers. Nevertheless, this is much less a problem for more specialised 
construction activities (e.g., in the area of energy efficiency). In addition, the limited mobility 
of  construction  companies  is  mostly  relevant  in  the  case  of  mobile  entry  modes.  Several 
difficulties preventing construction companies to provide temporary cross-border services can 
be overcome by entering the market in a more permanent way (e.g. through a branch set up 
for  long-term  local  business  development  in  the  host  market).  For  this  reason,  construction 
companies going abroad prefer a permanent establishment when the host market is unfamiliar, 
risky  or  with  intense  competition.16  This  was  also  confirmed  by  stakeholder  contacts  in  the 
context  of  the  on-going  fitness  check  for  the  construction  sector.17  Finally,  it  should  be 
highlighted that posting of workers in the context of cross-border provision of services is of 
high  importance  in  construction  with  43%  of  all  postings  in  the  EU  taking  place  in 
construction.18 

The sectors represent an important level of economic activities and economic performance 
in both sectors shows difficulties 

Firstly, business services and construction represent a major part of our economy. They cover 
18% of EU GDP and 20% of total employment, representing 45 million jobs. Together, these 
two sectors cover about 40% of all activities under the Services Directive. In addition, more 
than 9 million companies are active in these sectors with 1 million start-ups per year.  

Table 1 – Business services and construction 

% of EU value 
added 

Business 
services 

Computer and information services 
Professional, scientific and technical 
activities 
Administrative and support service 
activities 

Construction services 

Total 

2.3% 

6.4% 

4.1% 

5.3% 

18.2% 

Source: Eurostat, Commission analysis, 2013 

Persons 
employed 
(million) 
3.6 

Total # 
companies 
(million) 
0.73 

13.4 

13.6 

14.4 

45.1 

4.04 

1.32 

3.27 

9.37 

15 See for example World Bank, "EU Regular Economic Report – Growth, jobs and integration: services to the 
rescue", 2016 
16 Chuan C. (2008), "Entry mode selection for international construction markets: the influence of host country 
related factors", Construction Management and Economics, Vol. 26, No. 3 
17 European Commission, "Supporting study for the Fitness Check on the construction sector: EU internal market 
and energy efficiency legislation", forthcoming 
18 F. De Wispelaere and J. Pacolet, "The impact of intra-EU cross-border services, with special attention to the 
construction sector", 2016 

9 

 
 
 
 
                                                 
This  initiative  aims  to  reduce  obstacles  for  those  service  providers  that  want  to  go  cross-
border. A rough estimate on the basis of a number of surveys19 shows that about 10% of these 
companies  go  cross-border  or  might  consider  going  cross-border  in  the  future.  Hence,  the 
initiative  would  directly  address  a  target  group  of  almost  1  million  companies  and  about 
100,000 new potential target companies per year (assuming that 10% of the target group will 
go cross-border).   

Secondly,  both  sectors  face  important  issues  of  competitiveness  with  no  or  limited 
productivity  growth  over  the last  15  years  (graph  2).  Labour  productivity  levels  in  business 
services20  and  construction  stand  respectively  at  95%  and  98%  of  what  they  were  in  2000 
(compared to for example 118% for the overall economy, 142% in the manufacturing sector, 
120% in the financial services sector and 107% in the real estate sector). This shows that both 
sectors  face  important  issues  of  competitiveness  which  are  more  problematic  than  in  other 
large  services  sectors.  These  productivity  problems  –  in  particular  in  the  area  of  business 
services – have negative effects also on industry. 

Graph 2 – Labour productivity growth major economic sectors 

150
145
140
135
130
125
120
115
110
105
100
95
90
85
80

All economy

Manufacturing

Construction

Wholesale & retail

Transport

Financial services

Real estate activities

Business services

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Source: Eurostat, Commission analysis 

There  are  obviously  many  drivers  to  a  lagging  productivity  performance.  Nevertheless,  it  is 
well-established  that  increased  cross-border  competition  leads  to  a  better  allocation  of 
resources and gives a boost to productivity growth.21  

Conclusion 

In June 2016, Member States agreed in the European Council that this initiative should focus 
on  key  services  sectors.  Based  on  the  above  selection  criteria,  an  initial  focus  on  business 

19 For example, Eurobarometer (2016): Almost three quarters (74%) of the SMEs that do not currently export say 
they will probably never export, while 9% are considering it for the future, and 3% are trying to export now. 
Another  example  is  a  2014  Commission  report  based  on  a  large  survey  among  EU  SMEs  showed  that  5%  of 
SMEs with 10-249 employees providing construction services are estimated to participate in export activities. In 
addition,  it  showed  that  27%  of  SMEs  with  10-249  employees  in  the  business  services  sector  participate  in 
export activities.   
20 Given a lack of available data for "Computer and information services", business services in this graph only 
refers to Professional, scientific and technical activities and Administrative and support service activities.  
21  See  for  example  IMF,  "The  short-term  impact  of  product  market  reforms:  A  cross-country  firm-level 
analysis", 2016. 

10 

 
 
 
                                                 
services and construction seems justified. A further roll-out of the initiative to other services 
sectors could be envisaged at a later stage. 

1.3. Scope of the impact assessment – horizontal issues  

This impact assessment will not look into options which would amend any of the following 
provisions of EU law: 

  Directive on Posting of Workers of 199622 and the related 2014 Enforcement Directive; 
  Regulation  883/2004  on  the  coordination  of  social  security  rules  and  the  Implementing 

Regulation 987/2009; 

  Professional  Qualification  Directive  of  2005  and  its  subsequent  amendment  of  2013 

introducing the European Professional Card (EPC). 

However,  the  impact  assessment  will  analyse  the  concrete  administrative  steps  that  these 
provisions require service providers to take when they have access to the market and intend 
seconding staff to other Member States23.  

2.  Problem definition 

2.1. What is the problem and how important is it? 

As  highlighted  in  section  1.2,  an  important  number  of  business  services  as  well  as  the 
construction  sector  are  continuing  to  show  a  lack  of  internal  market  integration.  Graph  3 
shows  the  levels  of  EU  cross-border  trade  intensity  for  a  range  of  services  sectors  in 
comparison  to  the  manufacturing  sector  (goods),  where  much  more  trade  across  borders 
occurs.  However,  it  is  also  clear  that  certain  services  are  more  traded  across  borders  than 
others. This concerns in particular construction services and several business services which 
show very low levels of cross-border trade. 

Graph 3 – Cross-border trade intensity24 

Research and development services
Manufacturing
Management consulting
Advertising and market research
Computer services
Transport services
Engineering services
Accounting services
Architectural services
Construction

5% 

4% 

1% 
1% 

19% 

15% 
15% 

12% 

36% 
36% 

0%

10%

20%

30%

40%

Source: Eurostat 

22 Directive 96/71/EC, which is subject to a proposal for amendment dated 8/3/2016 
23 Affecting the implementation of: Article 9 of the 2014 Enforcement Directive on posting of workers; Article 
12 of Regulation 883/2004 and Article 15 of the Implementing Regulation 987/2009 on social security rules; and 
Article 7 of the Professional Qualifications Directive. 
24 Cross-border trade intensity is measured here as the average of intra-EU imports and exports compared to the 
total size of the sector; Year: 2014; Source: Eurostat. Manufacturing sector is a lower-end estimation.    

11 

 
 
 
                                                 
These  findings  are  confirmed  by  looking  at  the  behaviour  of  individual  service  providers. 
Different surveys25 confirm that export participation of service providers in general is much 
lower than that of manufacturers and that export participation differs significantly from sector 
to sector (with construction services and several business services showing the lowest levels 
of cross-border trade – for additional details see annex 5).  

Graph 4 – Cross-border investment intensity (across sectors)26 

Manufacturing
Wholesale and retail trade
Overall economy
Business services
Transport services
Construction

17% 

15% 

14% 

11% 

11% 

5% 

0%

2%

4%

6%

8%

10% 12% 14% 16% 18%

Source: Eurostat 

Graph 4 gives an indication of cross-border establishment (investment) intensity for a number 
of  important  services  sectors,  manufacturing  and  the  overall  economy.  This  shows  that 
manufacturing is again more integrated than services with regard to cross-border investment 
as well. Also here there is a large variety between different services sectors. Graph 5 gives an 
indication  of  this  variety  for  a  range  of  different  business  services.  Some  business  services 
(such as architects, engineers, accountants and services to buildings) are clearly characterised 
by much less cross-border investment than others.  

Graph 5 – Cross-border investment intensity (business services) 27 

Advertising and market research

Computer programming, consultancy and related…
Activities of head offices; management…

Administrative and support service activities
Information service activities
Architectural and engineering activities
Services to buildings and landscape activities
Legal and accounting activities

15% 

14% 

13% 

11% 

10% 

9% 

8% 

3% 

0% 2% 4% 6% 8% 10% 12% 14% 16%

Source: Eurostat 

The fact that the single market for services is much less developed than the one for goods is 
not a new finding. The more important conclusion on the basis of the above data is that there 
is  a  large  divergence  between  different  services  sectors  with  some  sectors  (in  particular 
business services and construction) showing only little cross-border trade and investment.  

Why is this a problem?  

25  European  Competitiveness  Report,  2014;  BIS,  Longitudinal  Small  Business  Survey  Year  1  (2015):  SME 
employers,  2016.  These  also  show  a  positive  correlation  between  cross-border  trade  and  size  of  companies 
within the sector – in some sectors cross-border trade is heavily dominated by large firms only.   
26  Cross-border  investment  intensity  is  measured  here  as  the  proportion  of  total  EU  value  added  which  is 
generated by intra-EU foreign affiliates; Coverage: EU-27; Year: 2012; Source: Eurostat.  
27  Cross-border  investment  intensity  is  measured  here  as  the  proportion  of  total  EU  value  added  which  is 
generated by intra-EU foreign affiliates; Coverage: EU-27; Year: 2012; Source: Eurostat.  

12 

 
 
 
 
                                                 
Firstly, lack of internal market integration in business services and construction has a negative 
impact on the competitiveness of the sectors concerned. Most services sectors have achieved 
modest  productivity  growth  since  2000.  Some  services  sectors  have  registered  no  or  even 
negative  productivity  growth  over  the  last  15  years,  in  particular  business  services  and 
construction. Given the weight of these services sector in the economy of all Member States, 
this  is  a  cause  for  concern.  Improving  the  functioning  of  the  single  market  would  facilitate 
higher  productivity  growth  in  these  sectors.28  Secondly,  there  are  wider spill-over  effects  to 
other sectors that need to be taken into account. The performance of the services sector is of 
importance  to  the  economy  at  large  due  to  its  inter-linkages  with  other  sectors  in  the 
economy. This is in particular the case for business services which constitute key inputs into 
the manufacturing sector. Today, 16% of the average value of a good produced in the EU is 
generated  from  business  services  activities.29  As  a  result,  reforms  in  business  services  have 
positive  effects  on  growth  and  competitiveness  of  downstream  sectors  such  as  the 
manufacturing  sector.30  Thirdly,  more  integrated  markets  enhance  cross-border  competition, 
leading to increased choice for consumers and lower prices.31 

2.2. Problem drivers  

Low cross-border trade and investment in business services and construction can be explained 
by a number of drivers. During the public consultation in 2016, administrative obstacles were 
highlighted  by  more  than  60%  of  stakeholders  as  clear  disincentives  for  cross-border 
activities.  In  addition,  more  than  65%  of  stakeholders  confirmed  that  regulatory  issues  are 
highly relevant.  

At the same time, there are drivers that are not in scope of this initiative which potentially also 
influence differences in market integration between services sectors. The public consultation 
showed that many respondents consider other barriers (such as customer relations, languages 
and  tax)  as  important  obstacles  to  going  cross-border.  There  is  no  'silver  bullet'  to  solve  all 
issues.  Some  of  these  are  inherent  to  the  market  (e.g.  customer  relations,  languages)  and 
cannot be directly changed or addressed. On the other hand, the Commission is undertaking 
initiatives to address several of these issues already now or in the future.32 

This initiative focuses on complex administrative procedures and regulatory requirements that 
still  persist.  The  importance  of  these  obstacles  (including  in  the  context  of  other  potential 
obstacles that might exist) has been confirmed by a large range of reports and surveys. This 
includes the following examples: 

28 See for example European Added Value Unit, "The Cost of Non-Europe in the Single Market for services", 
2014; European Commission and European Commission, "Update of the 2012 study on the economic impact of 
the Services Directive", 2015. See also annex 5.   
29  ECSIP,  "Study  on  the  relation  between  industry  and  services  in  terms  of  productivity  and  value  creation", 
2014 
30 See for example IWP, Services Liberalisation in Germany – Overview and the potential of deregulation, 2015. 
31 More intense competition reduces firms' mark-ups – see for example European Commission, "Estimation of 
service sector mark-ups determined by structural reform Indicators", 2015.  
32  See for example the upcoming proposal for extending the VAT Mini-One-Stop-Shop System 

13 

 
 
                                                 
 

In  extensive  contacts  with  stakeholders  (including  9  workshops33  organised  by  the 
Commission  with  service  providers 
these  obstacles 
(administrative complexity and regulatory requirements) were consistently highlighted 
by service providers as important;  

in  cross-border  regions) 

  Eurochambres  2015  research  (592  participants)34  found  that  83%  of  respondents 
considered complex administrative procedures as the main obstacle when going cross-
border (as a reference, 45% considered language as a problem); 

  Commission  consultation  of  2015  (293  replies)35  showed  that  authorisations  are  a 
major  obstacle  for  cross-border  service  providers  (more  important  for  example  than 
language differences); 

  A 2015 Eurobarometer survey (more than 4,000 replies)36 showed similar results with 
administrative complexity as one of the most important obstacle for SMEs providing 
services  that  go  cross-border  (again  more  important  than  for  example  languages  or 
identifying business partners abroad); 

  Several  studies  (including  by  the  Commission37,  OECD38,  IMF39  and  the  World 
Bank40)  have  highlighted  the  positive  potential  of  reducing  regulatory  barriers 
(including in business services).   

In view of this, the following problem drivers are considered in this impact assessment. 

Firstly,  there  is  uncertainty  and  administrative  complexity  faced  by  service  providers  in  the 
sectors  concerned  when  offering  their  services  cross-border.  This  is  assessed  as  problem 
driver  1.  Secondly,  there  is  a  lack  of  well-structured  cooperation  mechanisms  under  the 
Services  Directive.  This  is  assessed  as  problem  driver  2.  Thirdly,  smaller  undertakings  in 
business  services  and  construction  often  encounter  difficulties  when  offering  their  services 
cross-border  to  access  the  required  professional  indemnity  insurance.  This  is  examined  as 
problem driver 3.41 Finally, national regulations in business services are obstacles to the single 
market,  with  negative  spill-over  effects  to  other  sectors.  This  will  be  assessed  as  problem 
driver 4.42 

Accordingly,  only  few  undertakings  in  the  sectors  of  business  services  and  construction 
provide temporary services cross-border or set up a secondary establishment in other Member 
States.  Competition  on  these  markets  often  remains  limited,  which  is  liable  to  lead  to  an 
inefficient allocation of resources, limited choice for consumers and higher prices (figure 1).  

33 http://ec.europa.eu/DocsRoom/documents/13841/attachments/1/translations  
34 See http://www.eurochambres.eu/custom/Internal_Market_Survey_Report_FINAL-2015-00319-01.pdf 
35 See http://ec.europa.eu/DocsRoom/documents/13841/attachments/1/translations/en/renditions/native 
36 Eurobarometer 421, "Internationalisation of Small and Medium-sized Enterprises", 2015 
37 For example European Commission, "Study on the economic impact of the Services Directive", 2012 
38 OECD, "Service Regulation and Growth: Evidence from OECD countries", 2010 
39 IMF Working paper, "The short-term impact of product market reforms: A cross-country firm-level analysis", 
2016  
40 World Bank, "EU Regular Economic Report: Growth, Jobs and Integration: Services to the rescue", 2016 
41 Given the particular nature of this barrier, it is discussed separately from problem driver 4. 
42  As  explained  in  section  1.2,  this  problem  driver  will  only  be  assessed  for  business  services  (not  for 
construction).  

14 

 
 
                                                 
Figure 1 – Problem tree 

2.2.1.  Driver  1  –  Uncertainty  and  administrative  complexity  faced  by 

service providers when going cross-border 

1. What is the problem?  

Service  providers  face uncertainty  and  administrative  complexity  when  trying  to  establish  a 
permanent presence in another Member State or provide cross-border services on a temporary 
basis.  

On  the  one  hand,  it  is  often  difficult  to  obtain  a  picture  of  the  full  range  of  applicable 
requirements and necessary procedures that need to be completed to access another Member 
State's  market.  In  particular  sector-specific  information  (e.g.  how  to  get  a  specific  license, 
how  to  comply  with  local  rules  governing  employment  conditions  and  qualifications  of 
seconded staff) is not always available. Business is complaining about lack of information.43  

In addition, national rules are often put in place accounting for purely national situations only. 
As  a  result,  requirements  applicable  to  service  providers  originating  from  other  Member 
States are often unclear. This is notably the case for temporary cross-border service providers.  
Art.  16  of  the  Services  Directive  introduced  the  principle  that  host  Member  States' 
requirements  should  apply  to  temporary  cross-border  service  providers  in  exceptional 
circumstances  only  under  reasons  of  public  policy,  public  health,  public  security  and  the 
protection of the environment. Other overriding reasons of public interest (such as protection 
of  consumers)  cannot  be  invoked.  Nevertheless,  sector-specific  laws  in  almost  all  Member 
States have not been amended to make a clear distinction between requirements applicable to 

43  This  is  one  of  the  reasons  why  the  Commission  has  launched  an  initiative  in  the  form  of  a  Single  Digital 
Gateway addressing information gaps for business and citizens.   

15 

 
 
 
 
 
                                                 
companies seeking to establish and those seeking to provide temporary services cross-border. 
As a result, incoming service providers are forced to invoke Art. 16 of the Services Directive 
in  an  attempt  to  have  competent  authorities  to  disregard  national  law  which  is  devised  for 
establishment situations only. This situation generates major legal uncertainty for temporary 
cross-border providers on the applicable requirements.  

On  the  other  hand,  even  if  a  service  provider  is  equipped  with  all  relevant  information,  it 
needs  to  organise  in  practical  terms  compliance  with  the  applicable  rules  –  providing  the 
necessary  information  and  documents  to  authorities  in  another  Member  State.  Even  if  all 
information  on  applicable  rules  and  regulations  is  clear  and  readily  available,  compliance 
procedures and formalities generate administrative burden, which may be substantial. This is 
the case in particular for secondary establishment situations where legal certainty is less of a 
concern but service providers often face high administrative burden.  

The public consultation has shown that service providers consider a number of administrative 
obstacles  related  to  compliance  with  host  Member  State  rules  as  important  costs.  Both  for 
business  services  and  construction,  the  majority  of  respondents  highlight  administrative 
complexity as being an important challenge for temporary cross-border service provision and 
secondary  establishment.44  Regarding  business  services  specifically,  nearly  3  out  of  4 
respondents  indicated  the  need  for  offering  electronic  procedures  when  going  cross-border 
while  more  than  half  highlighted  the  need  for  eliminating  re-submissions  of  the  same 
documents and a closer cooperation amongst competent authorities. For construction services, 
specifically  important  obstacles  that  were  highlighted  by  stakeholders  include  the  need  to 
contact several authorities as well as the length and complexity of procedures.  

This administrative compliance burden is composed of several types of issues/obstacles. 

Firstly,  service  providers  often  need  to  complete  an  extensive  number  of  different 
procedures  when  starting  to  provide  services  in  another  Member  State.  Each  of  these 
procedures  involve  different  national  authorities  dealing  with  issues  that  are  sector  specific 
(such as professional chambers) or horizontal issues (e.g. formalities related to social security, 
tax, registration of a branch, etc.). These authorities (federal, regional or even local) are not 
required  to  coordinate  amongst  themselves.  Instead,  they  leave  it  to  the  foreign  service 
provider  to  take  the  required  steps,  which  as  a  result  are  often  repetitive.  These  issues  also 
point of lack of implementation of the "once-only  principle" in  the area of e-government to 
optimize the information exchange between private parties and public authorities.45  

Secondly, a service provider should be able not only to access online information but also to 
complete  the  necessary  formalities  (in  his/her  language)  from  its  home  Member  State  in  an 
electronic  way.  In  practice  however,  this  remains  a  major  deficiency  across  many  different 
Member  States.  Whereas  horizontal  procedures  (such  as  general  registration  of  economic 

44 A similar result comes out of the consultation on a start-up initiative conducted until July 2016. More than two 
thirds of the respondents indicated that the time to obtain operational licences and/or permits was an obstacle or 
a major obstacle to start a company.   
45 The main strategy from the Commission is set up in the Communication “EU eGovernment Action Plan 2016-
2020 – Accelerating the digital transformation of government” of April 2016.  

16 

 
 
                                                 
activity)  can  be  done  fully  online  in  more  than  half  of  the  Member  States,  authorities  in 
charge of specific services sectors are currently unable to offer this. As a result, it is often not 
possible  for  service  providers  to  complete  formalities  through  electronic  procedures  when 
starting to provide services in another Member State.46 In practice, sector specific procedures 
often  still  require  a  physical  visit  to  an  office  or  sending  forms  by  post,  for  example  to  the 
professional chamber involved. Finally, service providers are very often required to provide 
information in a foreign language.   

Thirdly, for many procedures that service providers face when going cross-border it is unclear 
by when they will receive a decision (positive  or  negative) regarding  their  application for a 
license or authorisation. National authorities do not announce or commit themselves to decide 
on  applications  within  a  predefined  deadline.  This  creates  additional  complexity  and 
uncertainty for service providers and works as a disincentive to access a foreign market. 

Fourthly, applications to enter a foreign market often require the service provider to submit a 
range  of  supporting  documents.  Service  providers  are  also  often  obliged  to  present 
supporting evidence to their application in the language of the host Member State and/or in a 
certified/authenticated form, including certified translations. These obligations on translation 
and certification of supporting  documents often require service providers to  purchase  costly 
external services of notaries and translators. These administrative obstacles are also relevant 
in the context of the ongoing agenda under the e-government action plan.47 48   

Administrative costs for service providers 

Interviews  with  service  providers  going  cross-border  in  the  business  services  sector49  show 
that administrative costs involving both internal staff time as well as potential external costs 
(translators, notaries, legal advice, etc.) can go up to several thousands of euros.  

Example 1 

A  service  provider  of  engineering  services  established  in  the  UK  wanted  to  set  up  a 
secondary  establishment  in  Spain.  It  reported  numerous  complicated  formalities  and  costs, 
including the following: 

-  The company spent an important amount of time on identification and familiarisation 

with the Spanish requirements; 

-  The company also had to collect different supporting documents from home country 

46 Capgemini Consulting and Eurochambres, "The Performance of the Points of Single Contact. An Assessment 
against the PSC Charter", 2015   
47  Communication  “EU  eGovernment  Action  Plan  2016-2020  –  Accelerating  the  digital  transformation  of 
government”, April 2016 
48 The initiative on a Single Digital Gateway will also envisage actions to make key administrative procedures 
available online, to ensure they are transactionable (i.e. do not require offline steps such as office visits) also for 
cross-border  users  and  increase  availability  in  widely  used  languages.  However,  those  priority  procedures  are 
likely to largely concern horizontal business events related to starting up a business activity, registering for VAT 
or social security and not sector specific ones as for this initiative. 
49 See Ecorys, "Study on the administrative formalities and costs involved in accessing markets cross-border", 
(forthcoming).  Regarding  construction  services  ,  see  Ecorys,  "Simplification  and  mutual  recognition  in  the 
construction sector under the Services Directive", 2015 

17 

 
 
                                                 
authorities  as  well  as  collect  other  data  itself  (for  example  on  management  and 
shareholders).  This  involved  costs  both  in  the  form  of  internal  staff  time  as  well  as 
fees  paid  to  authorities  to  obtain  the  required  evidence.  Documents  need  to  be 
delivered in person to the Spanish authorities;  

-  Given the complexity of the procedure the company used external advice services to 
help  understand  and  comply  with  the  different  requirements,  leading  to  further 
additional costs;  

-  The  company  had  to  look  also  for  external  translators  to  translate  supporting 
documents  into Spanish (representing additional  costs also in  the form  of fees to  be 
paid to the translator);  

-  Finally,  authorisation  and  registration  fees  had  to  be  paid  as  well  to  the  Spanish 

authorities.  

In general, these formalities represented a cost for the service provider of up to 5,000 EUR.  

Example 2  

A German provider of mechanical and electric engineering services that wanted to establish 
in Austria was forced to incorporate a subsidiary, since branches are currently not allowed. 
Furthermore  several  of  its  staff  and  managers  needed  to  undergo  special  training  and  pass 
exams  in  order  to  acquire  specific  professional  qualifications,  as  per  Austrian  Law.  This 
included managers which are not involved in service performance in Austria. These obstacles 
also  lead  to  significant  administrative  costs  for  the  service  provider,  that  could  go  up  to 
10,000 EUR.   

Example 3 

A  provider  of  certain  construction  services  that  wants  to  provide  services  on  a  temporary 
basis  in  Bulgaria  needs  to  complete  a  prior  notification  for  each  construction  project.  The 
notification  form  is  available  only  in  Bulgarian.  It  needs  to  submit  a  range  of  documents 
(proof  of  legal  establishment  in  the  home  Member  State,  details  of  envisaged  construction 
project,  proof  of  professional  and  technical  capacity).  While  simple  copies  of  these 
documents are accepted, translations must be submitted in original format and certified by a 
translator registered in BG. 

Further examples are included in annex 5.   

Finally,  service  providers  going  cross-border  often  experience  administrative  burden 
specifically in relation to formalities and procedures regarding secondment of staff. For the 
same employee/worker that is posted abroad, in practice a service provider currently needs to 
complete three independent formalities/processes involving different authorities in relation to 
the following: 

  Employment  conditions  under  the  posting  of  workers  rules  where  the  vast  majority  of 
Member States require or will require advance notifications under the 2014 Enforcement 
Directive;  

18 

 
 
 
  Formalities related to proof of professional qualifications,  if applicable; 
  Social security rules where A1 forms should be issued to provide evidence about social 

security coverage in the home Member State.          

Service  providers  often  consider  that  seconding  staff  gives  rise  to  continuous  practical 
difficulties, including burdensome and disparate administrative requirements across Member 
States.  This  was  confirmed  during  nine  stakeholder  workshops  between  September  and 
November 2014 in the context of the Single Market Forum, as well as through a subsequent 
stakeholder questionnaire50. In addition, Eurochambers reported in September 2015 that 21% 
of  SMEs  which  were  surveyed  had  extremely  significant  problems  in  this  area  and  31% 
reported significant problems.  A workshop  held in  July  2016 confirmed that  secondment of 
staff formalities can be challenging to fulfil even between neighboring countries which speak 
the  same  language,  namely  Austria  and  Germany.51  Indeed,  based  on  a  recent  survey52, 
administrative  aspects  including  the  complexity  of  notifications  came  up  as  a  significant 
barrier to posting workers in business services. This was for instance clearly of higher concern 
than the motivation of workers to go work in another Member State temporarily.    

All in all, Member States have the legitimate need to have in place robust controls combatting 
undeclared work and fraudulent behaviour (also in relation to the shadow economy53), notably 
in construction. Fraud in relation to posting of workers, social security issues and bogus self-
employed should be tackled to ensure compliance with labour and tax regulations, including 
by  enabling  regular  and  effective  inspections  at  the  workplace  (notably  building  sites)  of 
posted  employees.  There  are  also  concerns  about  letter-box  companies  that  are  set  up  to 
circumvent  rules.  However,  these  needs  must  be  pursued  in  a  proportionate  manner,  by 
reconciling them with the free movement under EU law. Overall, a clear and well-coordinated 
solution  may  foster  acceptance  and  compliance  by  service  providers.  The  administrative 
burden is a key aspect in this regard. 

Secondment of staff formalities 

Without prejudice to underlying legislation linked to secondment of staff, service providers 
are  faced  with  considerable  administrative  "hassle"  linked  to  the  various  formalities  to  be 
fulfilled.  As  stated  above,  service  providers  currently  need  to  fulfil  three  fully  separate 
formalities  linked  to  the  secondment  of  staff,  all  involving  distinct  authorities,  supporting 
procedures and IT systems (where available).  

These  formalities  are  particularly  burdensome  for  companies  wishing  to  expand  to  several 
Member States: for each one, administrative requirements look different, involving different 
authorities, disparate ways of submitting information, available language regimes, timelines 

in  2014  and 

to  which  nearly  300  companies 

50  Launced 
http://ec.europa.eu/DocsRoom/documents/13841/attachments/1/translations/en/renditions/native 
51 Workshop on 14 July 201 jointly organised by German and Austrian chambers of commerce. 
52 "Dienstleistungsverkehr im EU-Binnenmarkt - Hürden, Hindernisse und Herausforderungen" (2016), study by 
Industrie- und Handelskammern in Bayern (BIHK) based on 449 company interviews 
53 See for instance Friedrich Schneider, the Shadow Economy and Work in the Shadow, Institute for the Study of 
Labor, March 2012, Section 2.3.3. Intensity of Regulations  

Jan  2015.  See 

responded  by 

19 

 
 
                                                 
and  fees.  Stakeholders  often  report  that  even  finding  out  about  applicable  administrative 
formalities may require significant efforts. For each of the administrative formalities linked to 
secondment of staff, please see annex 5 for further details on administrative hurdles observed 
across Member States.   

2. What is the impact of this problem driver? 

There is a negative impact of administrative burden and complexity on business growth and 
market  dynamics.54  The  public  consultation  in  2016  confirmed  that  tackling  these  types  of 
barriers would have a positive impact in terms of saving costs for service providers (70% of 
the  respondents  confirmed  this),  increasing  cross-border  provision  of  services  (68%)  and 
choice for consumers (55%).   

3. Why has this problem driver not been resolved by existing rules and tools? 

The  problems  highlighted  above  raise  the  question  why  the  existing  legal  framework  and 
related structures and tools have failed to deliver effective solutions for service providers. The 
Services  Directive  encompasses  several  provisions  regarding 
the  simplification  of 
administrative procedures by Member States. These include an obligation to examine and, if 
necessary, simplify procedures and formalities applicable to access services activities. As part 
of  this,  Member  States  should  explore  less  burdensome  alternatives  and  assess  whether 
evidence  or  documents  are  needed.  Moreover,  Member  States  should  ensure  that  all 
procedures and formalities linked to accessing a service activity can be easily completed by 
national  electronic  means.  Such  electronic  procedures  need  to  cover  the  full  administrative 
process. 

Moreover,  the  Services  Directive  obliges  Member  States  to  offer  points  of  single  contact 
(PSCs) serving as e-portals for service providers looking for clear and up-to-date information 
(including about applicable requirements and competent authorities) and wishing to complete 
formalities. PSCs should provide all necessary e-procedures for the access and exercise of a 
specific service activity in each sector covered by the Service Directive, thus eliminating the 
need to contact different competent authorities separately.    

So why do service providers continue to face administrative complexity and uncertainty about 
applicable requirements? One major factor explaining this is that the Services Directive puts 
forward general rules about  administrative simplification. Certain  aspects, such as  deadlines 
and  steps  for  completing  procedures,  are  not  concretely  defined.  These  are  however  very 
important for service providers on the ground. Overall, these general rules and principles do 
also not allow for effective enforcement activities, given the discretion left to Member States 
in terms of implementation.  

As  regards  PSCs  specifically,  major  challenges  remain  with  a  view  to  improving  their 
performance  across  Member  States.  In  the  majority  of  Member  States,  PSCs  display 
weaknesses in terms of information coverage (including sector relation information in foreign 

54 See for example European Commission, "Business Dynamics and Red Tape Barriers", 2014 

20 

 
 
 
                                                 
language(s))  and  e-procedures  relevant  to  providing  services  on  a  cross-border  basis.55 
Overall,  most  of  the  national  PSCs  are  lacking  the  required  resources,  which  is  reflected 
especially in the lack of information and e-procedures offered for specific sectors (as opposed 
to  general  requirements  such  as  business  registration  or  tax  formalities).  Indeed,  the  vast 
amount  of  sectors  to  be  covered  under  the  Services  Directive  (46%  of  EU  GDP)  makes  it 
complex  to  deliver  the  required  range  of  information  and  different  e-procedures  in  a  user 
friendly manner.   

Since 2009, significant efforts have been put into making PSCs work better, including through 
dedicated  working  groups  with  Member  States  as  well  as  enforcement  action.  In  December 
2013, Member States even agreed a Charter to improve the effectiveness of PSCs but without 
practical  success  on  the  ground.56  In  addition,  enforcement  efforts  have  again  proved 
insufficient  given  that  the  Services  Directive  only  covers  general  rules  on  what  the  PSCs 
should  offer,  rather  than  setting  more  specific  requirements.  The  upcoming  Single  Digital 
Gateway  initiative  aims  to  improve  the  findability,  availability  and  quality  of  information, 
advice, assistance, problem-solving and the most relevant e-procedures based on all existing 
relevant  tools  (such  as  Your  Europe,  SOLVIT,  PSCs).  This  should  help  tackle  some  of  the 
challenges  with  which  PSCs  and  other  contact  points  are  confronted.  However,  such  action 
alone cannot ensure clarity and administrative simplification across all Member States within 
a reasonably short timeframe, given persisting implementation issues.   

Altogether, these problems underline the need for solutions which do not rely on the general 
administrative  simplification  provisions  of  the  Services  Directive,  nor  on  well-functioning 
PSCs. These do not provide the necessary clarity and administrative simplification, which can 
only  be  reached  through  introducing  specific  rules  on  practical  aspects  such  as  procedural 
steps,  timelines  and  information  requirements,  underpinned  by  well-defined  responsibilities 
for  Member  States.  Given  that  the  current  shortcomings  linked  to  PSCs  are  partly  or  even 
largely  explained  by  the  significant  number  of  sectors  and  the  variety  of  national  sector-
specific  procedures,  a  more  targeted  solution  limited  to  selected  key  sectors  would  be  less 
complex and costly to implement by Member States. As regards e-procedures, a common and 
centrally provided EU-level procedure with a clear workflow, timelines and obligations could 
also  facilitate  practical  implementation  and  therefore  require  less  investment  by  Member 
States.    

2.2.2.  Driver  2  –  Lack  of  well-structured  cooperation  mechanisms  under 

the Services Directive 

The  Services  Directive  obliges  Member  States  to  assist  each  other  and  to  exchange 
information  whenever  this  is  necessary  to  ensure  a  proper  enforcement  of  applicable  rules. 
Such an explicit obligation is set out under Article 29 of the Services Directive under which 
the home Member State shall supply information if requested by another Member State. The 
objective of setting up this system of administrative cooperation was to avoid a proliferation 

55 Capgemini Consulting and Eurochambres, "The Performance of the Points of Single Contact. An Assessment 
against the PSC Charter", 2015   
56 See even conclusions of the Competitiveness Council of 2 December 2013 

21 

 
 
                                                 
of rules applicable to providers coming from abroad and a duplication of controls for cross-
border  activities.  Daily  cooperation  between  Member  States  would  also  enhance  trust 
regarding  service  providers  coming  from  other  Member  States.  The  Internal  Market 
Information  system  (IMI)  has  been  put  in  place  to  enable  an  electronic  exchange  of 
information between Member States. 

1. What is the problem?  

Firstly, there has  been  very little exchange of  information  between different Member  States 
under  the  area  of  the  Services  Directive.  This  stands  in  sharp  contrast  to  the  use  of  IMI  by 
other  authorities  in  the  context  of  other  pieces  of  EU  legislation.  Exchange  of  information 
under  the  Services  Directive  has  stagnated  at  the  level  of  around  400  contacts  between 
Member States per year since 2011 (the starting year of IMI use) while it increased nine times 
during the same period in the area of posting of workers and tripled (at an already very high 
level) in the area of professional qualifications (graph 6). This shows that there is no problem 
with the IMI system itself but rather that Member States are not using it to cooperate in the 
area of the Services Directive.  

Graph 6 – IMI number of information exchanges 

414 
440 
424 
409 
352 

1580 

1069 
971 

806 

Services Directive

Posting of workers

181 

344 
285 

Patients rights

Professional qualifications

3091 

2166 

4527 

5778 

7266 

0

1000

2000

3000

4000

5000

6000

7000

8000

Source: Commission analysis (Internal market information system statistics57) 

2015

2014

2013

2012

2011

 In  addition,  the  use  of  the  IMI  system  for  exchange  of  information  on  incoming  service 
providers  in  the  context  of  the  Services  Directive  is  very  uneven  across  Member  States.  In 
fact,  during  2015  22  Member  States  requested  less  than  10  times  other  Member  States  to 
supply information on an incoming service provider (see annex 5). 8 Member States even did 
not request any information at all. The data is similar for 2014. Even though there is a very 
large  number  of  authorities  registered  in  IMI  under  the  Services  Directive  area58,  surveys59 
carried out by the Commission show that these authorities in many cases consider that there is 
no need to use IMI or even communicate with other Member States. These authorities –often 
at a local level – might not have the internal capacity for continuous cooperation with other 
Member  States.  In  addition,  they  might  not  be  aware  of  the  benefits  of  administrative 
cooperation or even the obligations set out in the Services Directive. In general, there is not a 

57 See http://ec.europa.eu/internal_market/imi-net/statistics/2014/06/index_en.htm  
58 Almost 6,000 in 2015 
59 IMI user survey, 2015 

22 

 
 
 
                                                 
lack of willingness by Member States to cooperate but rather a lack of a structured workflow 
to support such cooperation.   

As  a  result,  in  cases  of  secondary  establishment  Member  States  often  require  incoming 
service providers to show that they comply with requirements very similar to those applied to 
them in their Member State of primary establishment, disregarding the situation in the home 
Member State. In addition, temporary cross-border service providers are sometimes asked to 
comply  with  authorisations  in  the  country  of  destination  that  are  not  clearly  justified  under 
Article 16 of the Services Directive. 

The  Member  States  that  do  use  IMI  for  administrative  cooperation  in  the  context  of  the 
Services Directive mostly ask questions that are related to the situation of the service provider 
in its home Member (see annex 5). 

In  March  201460,  the  Commission  highlighted  this  problem  publicly  and  subsequently 
reminded  Member  States  of  the  issue  in  the  expert  group  on  the  implementation  of  the 
Services  Directive.  No  change  has  however  been  seen  since.  In  addition,  also  the  European 
Court  of  Auditors  in  a  recent  report  has  highlighted  that  cooperation  in  the  context  of  the 
Services Directive is not working properly.61  

2. What is the impact of this problem driver? 

More day-to-day cooperation between Member States would contribute to enhancing trust in 
each  other's  legal  and  administrative  systems.  This  would  be  to  the  benefit  of  cross-border 
service  providers  which  face  administrative  and  regulatory  obstacles  (but  also  issues  of 
languages for example) when going cross-border.  

In  addition,  a  lack  of  cooperation  between  Member  States  also  has  negative  effects  for  the 
Member States' authorities themselves as well as for consumers. Currently, information on the 
cross-border service provider is often only available to the home Member States' authorities. 
This includes information regarding the good repute of the provider (such as its track record 
on criminal, administrative and disciplinary sanctions relevant for the activities carried out by 
a  service  provider).  This  information  is  not  always  offered  to  the  host  Member  States' 
authorities. As a result, it is also not easily available to consumers in the host Member State. 
This potentially harms confidence with consumers towards foreign service providers. 

This  shortcoming  is  clearly  emphasized  by  stakeholders  who  responded  to  the  public 
consultation.  55%  of  respondents  active  in  business  services  indicated  that  ensuring  close 
cooperation  between  the  home  and  host  Member  State  should  be  addressed;  61%  of  them 
active in construction services indicated so as well. 

3. Why has this problem driver not been resolved by existing rules and tools? 

The Services Directive sets out general rules concerning administrative cooperation between 
Member States' authorities. These include an obligation for Member States to provide mutual 
assistance  (replying  to  information  requests,  carrying  out  checks  and  investigations,  etc.). 

60 See Commission Staff Working Document (SWD (2014) 131 final, page 6 
61 ECA, Special report No 5/2016, 2016 (see items 55 and 56) 

23 

 
 
                                                 
However,  as  is  the  case  for  administrative  simplification  provisions,  the  implementation  of 
such  general  rules  relies  on  the  good  will  and efforts  by  Member  States  to  make  it  happen. 
The  Services  Directive  does  not  provide  sufficient  detail  to  allow  for  effective  enforcement 
action by the Commission or even by service providers before Courts.    

Regarding cooperation and exchange of information in the Internal Market Information (IMI) 
system specifically, the above section already highlights the limited and uneven use of IMI in 
the context of the Services Directive. However, this trend does not imply that the IMI system 
itself is malfunctioning, but rather that Member States are not making use of its potential to 
cooperate  in  the  area  of  the  Services  Directive.  The  main  reason  is  the  absence  of  a  clear 
framework with procedural steps to follow for exchanging information. On the contrary, the 
IMI system itself has proved an effective and reliable tool in other areas, for which it is also 
used  much  more  intensely.  The  European  Professional  Card  (EPC)  procedure  for  the 
recognition  of  professional  qualifications  is  a  good  example  of  this,  demonstrating  that  the 
IMI system can truly facilitate cooperation and enhance mutual trust between Member States 
through the secured and multilingual communication channel it provides.  

European Professional Card (EPC) 

The EPC facilitates the recognition of professional qualifications for selected professionals. It 
is  a  successful  example  of  a  centrally  provided  EU-level  procedure  with  a  clearly  defined 
procedure  run  within  the  IMI  system.  The  obligations  of  Member  States  in  the  procedural 
workflow  are  set  out  in  detail,  thus  overcoming  the  ambiguity  of  more  general  rules.  It 
provides  a  targeted  solution  underpinned  by  specific  rules  on  practical  issues  such  as 
documents,  deadlines  for  treating  applications  and  tacit  approval  in  case  host  country 
authorities do not take a final decision within deadline (in such cases, recognition is granted 
automatically). In this way, the EPC provides an easier, quicker and more transparent way to 
have qualifications recognised. 

Apart  from  primarily  building  on  pre-translated  forms  for  which  high  quality  is  guaranteed 
across  all  EU  languages,  the  EPC  solution  incorporates  a  machine  translation  functionality 
for  information  and  messages  provided  in  free  text.  This  reduces  significantly  the  need  for 
translation  or  even  makes  it  redundant.  The  IMI  system  makes  use  of  the  Commission's 
machine  translation  service,  thus  ensuring  data  protection  and  privacy  within  a  secure 
environment. The service, which is continuously developed and has improved in quality over 
the  past  years,  is  also  used  for  notifications  concerning  the  content  of  national  regulations 
under the Services Directive.  

A formal evaluation of the EPC functioning is foreseen for one year after its launch (2017).  
Nevertheless,  the  implementation  of  the  EPC  can  be  considered  as  successful  so  far. 
Difficulties  are  limited  and  mostly  related  to  late  notifications  by  some  Member  States  of 
their  requirements  (for  example  regarding  documents  and  fees)  and  some  technical 
improvements to the IMI system. Since the EPC was made available in January 2016, more 
than 560 EPCs have already been issued (as of 20/10/17). This significant take-up of the EPC 
reflects  a  high  demand  among  professionals.  The  key  features  of  an  EPC  have  also  proved 
operational  on  the  ground:  for  instance,  tacit  approval  with  ensuing  automatic  recognition 

24 

 
 
represents  up  to  15%  of  the  cases.  Deadlines  for  handling  applications  by  Member  States 
have not been an issue in the vast majority of cases, since the IMI provides for an effective 
monitoring  system,  including  automatic  reminders  and  the  involvement  of  national  IMI 
coordinators in each Member State.  

2.2.3.  Driver 3 - Insurance coverage in cross-border situations 

Professional  indemnity  insurance  as  compulsory  insurance  aims  to  cover  risks  related  to 
professional liability of service providers and thus functions as a guarantee towards clients for 
the quality of services. Nevertheless, such insurance may become an impediment to the proper 
functioning  of  the  Single  Market  in  services,  both  as  regards  secondary  establishment  in 
another Member State as well as for temporary cross-border services.  

1. What is the problem?  

Professional indemnity insurance is in principle easy to obtain in a domestic market, but can 
be  substantially  burdensome  in  situations  in  which  Member  States  impose  an  insurance 
requirement to providers established in other Member States. There are a number of reasons 
for this. 

First,  there  is  a  lack  of transparency  for  services  providers  going  abroad.  Insurance  policies 
are not always clear regarding whether cross-border activities are covered and, if so, in which 
specific Member States. This is the case both for mandatory and voluntary insurance covers. 
This  lack  of  transparency  also  has  a  negative  effect  on  consumers,  who  want  a  clear 
confirmation  that  the  service  provider  has  an  adequate  insurance  coverage.  In  addition,  the 
level of information provided by national authorities on insurance obligations lags behind the 
expectations  and  the  needs  of  service  providers,  in  particular  SMEs  that  do  not  necessarily 
have  the  resources  to  collect  the  necessary  information.  InsuranceEurope62  has  therefore 
already  made  a  call  asking  for  the  Points  of  Single  Contact  under  the  Services  Directive  to 
offer more information related to national rules on insurance. 

Second, host Member States do not take into consideration the insurance coverage previously 
acquired  in  other  Member  States.    In  those  cases  in  which  the  Services  Directive  allows 
Member States to impose an insurance requirement on cross-border service providers, Art. 23 
of the Directive requires the host Member State to consider the existing insurance policy of a 
foreign service provider, in order to avoid duplication of insurance obligations. This is based 
on elements such as the insured risk, the insured sum and possible exclusions from the cover. 
Member States  have  nevertheless only  transposed this rule formally  with no practical effect 
for  cross-border  service  providers  on  the  ground.63  Member  States  confirmed  in  the  expert 
group on the implementation of the Services Directive (in 2014 and 2015) that they did not 
undertake any concrete steps to make any equivalence assessment work in practice.  

62 Representing 95% of the insurance industry in the EU 
63  See  also  European  Commission,  "Staff  working  document  on  access  to  insurance  for  services  provided  in 
another Member State", 2014 

25 

 
 
                                                 
Third,  there  are  large  differences  regarding  obligations  on  professional  indemnity  insurance 
between different Member States within the same services sector (see annex 5).64 To adapt to 
the local circumstances in host Member States will evidently be more difficult for SMEs and 
small  insurers  than  for  big  companies  and  insurers  with  large  international  networks  and 
experience.  

2. What is the impact of this problem driver? 

It is not possible to quantify the number of cross-border transactions that have been annulled 
or frustrated because of problems of obtaining adequate coverage for professional indemnity, 
but it is recurring theme in the contacts that the Commission has with stakeholders:  

  A public consultation conducted in 2013 confirmed that many SMEs and professionals 
continue  to  find  it  hard  to  obtain  insurance  cover  for  their  activities  in  other  Member 
States.65 More than 20% of service providers active cross-border highlighted that they 
face  difficulties in obtaining the necessary insurance cover; 
Insurance requirements as an obstacle to cross-border activities were also highlighted in 
workshops carried out by the Commission in 2014 and 2015 in the context of the Single 
Market forum; 

 

  A  public  consultation  in  the  context  of  the  Green  paper  on  retail  financial  services66 

confirmed this (2016);  

  The 2016 public consultation in the context of this impact assessment showed that 44% 
of  the  respondents  –  mainly  the  demand  side  –  favour  action  at  EU  level  to  address 
these issues. 

2.2.4.  Driver  4  –  National  regulations  in  key  business  services  with 

negative spill-over effects to other sectors 

The  Services  Directive  obliged  Member  States  to  eliminate  from  their  legal  orders  or  make 
less  stringent  a  number  of  requirements  for  provision  of  services  in  their  territory. 
Nevertheless,  implementation  of  the  Directive  has  been  only  partially  successful.  Key 
business services are among the sectors where the largest number of barriers remains across 
the EU.  

1. What is the problem? 

Section  1.2  explained  why  this  initiative  focuses  on  business  services  and  construction. 
Problem  drivers  1  to  3  are  relevant  for  these  two  sectors.  This  problem  driver  on  the  other 
hand  has  a  more  narrow  scope  on  a  number  of  particular  business  services  sectors.  The 
reasons for this are the following. 

64  European  Commission,  "Single  Market  Strategy  for  Europe  -  Analysis  and  Evidence",  Staff  Working 
Document, 2015. See also Ecorys, "Simplification and mutual recognition in the construction sector under the 
Services Directive", 2015 
65  European  Commission,  "Consultation  on  problems  faced  by  service  providers  in  obtaining  insurance  cover 
when providing services in another Member State on a temporary basis", 2013 
66 European Commission, "Green Paper on retail financial services", , of 10 December 2015, COM (2015) 630 
final 
http://ec.europa.eu/finance/consultations/2015/retail-financial-
services/index_en.htm. In particular comments made in relation to Question 16 are relevant here. 

published 

responses 

see 

on 

– 

26 

 
 
                                                 
Firstly  regarding  construction  services,  some  construction  service  providers  and  national 
construction federations signalled that restrictive regulatory issues were still in place in many 
Member  States.  This  is  also  in  line  with  a  recent  Commission  study  looking  into  the 
regulatory  framework  of  construction  markets  across  the  EU.67  Nevertheless,  the  social 
partners  in  the  construction  sector  and  associations  at  EU  level  have  indicated  the  need  for 
additional  clarifications.  They  do  not  support  an  initiative  that  would  address  regulatory 
obstacles in construction. In this context, national regulations governing access and exercise 
of  construction  services  as  well  as  their  impact  require  further  analysis  and  discussion  with 
stakeholders. These issues could be treated in an upcoming Action Plan for the construction 
sector which would follow up to the 2012 Communication on sustainable competitiveness of 
the construction sector.  

Secondly, the business services sector includes a large range of services sectors. On the one 
hand,  there  are  business  services  (including  management  consultancy,  computer  services, 
services  to  buildings,  office  administrative  and  support  activities)  where  specific  regulatory 
obstacles to enter the market are inexistent or very rare. On the other hand, there are highly 
regulated business services where regulatory obstacles are widespread across Member States. 
This  mainly  concerns  large  business  services  (in  scope  of  the  Services  Directive)  of 
accounting,  architectural  and  engineering  services.  These  sectors  cover  about  20%  of  all 
business  services  activities.  The  focus  of  this  problem  driver  is  therefore  on  these  three 
business services specifically where regulatory obstacles are widespread and internal market 
integration remains limited (table 2).    

Business services sector 

Computer services 
Legal and accounting activities 
Architectural and engineering 
activities 
Management consultancy 
activities 
Services to buildings and 
landscape activities 
Rental and leasing activities 
Office administrative and 
support activities 
Advertising and market 
research 
Information service activities 
Scientific research and 

Table 2 – Business services  

Proportion of 
business services 
sector68 

Regulatory 
obstacles covered 
by the Services 
Directive 

Internal market 
integration69 

16% 
14% 

12% 

12% 

7% 

7% 

7% 

4% 

3% 
2% 

Limited 
Widespread 

Widespread 

Limited 

Limited 

Some 

Limited 

High 
Low 

Low 

High 

Low 

Medium 

Medium 

Limited/Some 

High 

Limited 
Limited 

Medium 
High 

67 Ecorys, "Simplification and mutual recognition in the construction sector under the Services Directive", 2015 
68 Eurostat, Structural Business Statistics, 2013 (expressed as % of total value added) 
69 Eurostat, using data on cross-border investment (Structural Business Statistics, when available) and/or trade 
(Balance of Payments Statistics, when available) 

27 

 
 
                                                 
development 

Other 

17% 

N/A 

N/A 

Source: Eurostat, Commission analysis 

Some  of  the  regulatory  obstacles  in  accounting,  architectural  and  engineering  services  have 
been almost completely removed following the introduction of the Services Directive (such as 
restrictions on advertising or tariffs)70 or are being addressed by recent infringement action by 
the  Commission.71  Nevertheless,  there  are  a  number  of  regulatory  obstacles  in  these  sectors 
that are still widespread across many Member States. These include: 

  Authorisation requirements for companies;  
  Restrictions on legal form, shareholding/voting rights and management structures; 
  Limitations on multidisciplinary activities.  

Several  Member  States  impose  restrictions  through  authorisation  schemes  on  service 
providers  as  regards  their  legal  form,  their  shareholding  structure,  the  allocation  of  voting 
rights, management positions and multidisciplinary activities. These rules are meant to protect 
the independence of the professionals. Nevertheless, they are potentially serious obstacles for 
service providers that want to become active cross-border, given that such restrictions might 
oblige them to  change their  legal form, shareholding  or  management structure or  even their 
overall business model. This is de facto a prohibition of entry because a company would be 
forced to change its corporate structure or even to replace shareholders by others in order to 
establish in another Member State. Requirements of this type are present in 17 Member States 
for architectural services, 14 Member States for engineering services and 10 Member States 
for  accounting  services.  These  requirements  present  very  different  levels  of  restrictiveness. 
They  are  in  place  for  secondary  establishment  situations.  Regarding  temporary  provision  of 
services, the regulatory framework in many Member States is unclear as legislation does not 
refer  to  this  manner  of  service  provision  at  all  (as  highlighted  in  problem  driver  1).  In 
exceptional  cases,  these  restrictions  are  even  explicitly  imposed  on  temporary  cross-border 
service providers.  

Annex 5 gives more detailed information on the presence of these requirements and of their 
degree of restrictiveness across Member States for the three business services sectors covered 
(accountants, architects and engineers), including the most restrictive ones that are currently 
the object of an infringement procedure.    

Some aspects of these barriers could be addressed by enforcing Article 14, 15 and 25 of the 
Services  Directive.  Building  on  the  results  of  the  2012  peer  review  with  Member  States, 
enforcement  action  against  some  of  the  most  restrictive  requirements  of  this  type  has  been 
launched  by  the  Commission  and  is  ongoing.  Enforcement  may  however  not  be  suitable  to 
ensure full regulatory convergence in all Member States. 

3. What is the impact of this problem driver? 

70 For more details see an in-depth evaluation of the Services Directive (annex 4)  
71 An additional infringement package of 9 cases was put forward in November 2016.   

28 

 
 
                                                 
Regulatory  obstacles  in  business  services  (and  in  particular  the  sectors  of  accountants, 
architects and engineers) are leading to less cross-border trade and investment and in general 
limit productivity growth with negative spill-over effects to other sectors.    

First, stakeholder feedback shows that these regulatory obstacles make it difficult to become 
active cross-border:  

  Workshops  and  surveys  held  by  the  Commission  throughout  the  EU  in  2014  and 
201572  showed  that  79%  of  companies  have  encountered  problems  with  registration 
and authorisations when providing cross-border services. In addition, stakeholders also 
indicated  that  the  variation  of  legal  form  and  shareholding  requirements  across 
Member States is a barrier, both to cross-border provision and to establishment; 

  The public consultation in 2016 showed that more than 60% of respondents consider 
regulatory barriers in business services to be an issue of concern. For example, more 
than  40%  consider  legal  form  requirements  as  an  obstacle  and  about  30%  consider 
shareholding restrictions as a barrier to cross-border activities.   

Second, the presence of barriers such as authorisations and restrictions on corporate form and 
multidisciplinary activities represent market-entry costs for undertakings which increase with 
the overall level of regulation in the host Member State but also with differences in regulation 
between Member States. These differences require the service provider to make an additional 
"investment" for each Member State it enters.73 As a result, these obstacles limit cross-border 
activities in several ways. Firstly, they reduce cross-border trade in these sectors.74 Secondly, 
also  sales  through  foreign  establishment  in  business  services  are  negatively  impacted  by 
obstacles  such  as  legal  form  requirements  and  restrictions  on  multi-disciplinary  activities.75 
Finally, they also make entry in the market or scaling up by national players more difficult.    

Regulatory  obstacles  in  these  sectors  have  a  larger  impact  on  SMEs  than  on  large 
multinational  companies.76  Currently,  these  sectors  are  characterised  by  micro  undertakings 
focusing only on domestic clients on the one hand and large multinational companies on the 
other.77  Only  few  SMEs  providing  business  services  such  as  accounting,  architecture  and 
engineering  services  are  operating  in  other  Member  States.  This  lack  of  medium  sized 
companies in the business services sector has been identified as the "missing middle" by the 
2014 HLG on business services.78 

On  a  more  macro-economic  level,  the  presence  of  these  regulatory  obstacles  limits 
competition  and  productivity  growth  in  these  sectors.  Member  States  with  more  restrictive 
regulatory  barriers  see  on  average  less  new  companies  entering  the  market  hereby  limiting 

72 See http://ec.europa.eu/DocsRoom/documents/13841/attachments/1/translations/en/renditions/native 
73 H. Kox, A. Lehour, "Regulatory heterogeneity a obstacles for international services trade", 2005 
74 EFIGE, "The discriminatory effect of domestic regulations on international services trade: evidence from firm-
level data", 2012 
75 Swedish Board of Trade, "Possible effects of the Services Directive", 2012 
76 European Commission, "Barriers to trade in business services", 2001; H. Kox, H. K. Nordas, "Services Trade 
and Domestic Regulation", OECD, 2007 
77 Ecorys, "Study on business-related services", 2012 
78 European Commission, "HLG Business services Final Report", 2014 

29 

 
 
                                                 
competition. As a result, these sectors experience a less efficient flow of resources leading to 
lower levels of allocative efficiency79.  

In  addition,  a  malfunctioning  business  services  sector  has  a  wider  effect  on  users  of  such 
services. Regulatory barriers in business services have a negative impact on the value added, 
productivity growth and exports growth rates of the economic sectors using these services.80 
More  restrictive  regulation  in  business  services  such  as  accounting,  architecture  and 
engineering  services  lead  to  larger-than-average  profit  rates  in  the  sectors  concerned.  More 
intensive competition is liable to drive prices down to the benefit of its users.81  

2.3. How would the problem evolve, all things being equal? 

All things being equal the problem and underlying problem drivers described and explained 
above would remain largely in place.  

First,  regarding  problem  drivers  1  and  2  the  principles  and  rules  in  the  Services  Directive 
calling  for  administrative  simplification  and  administrative  cooperation  do  not  allow  for 
enforcement activities. Progress in this regard without a new tailored policy initiative would 
remain  dependent  on  the  good  will  of  Member  States.  A  particular  concern  is  the  lack  of 
structured workflows to facilitate cooperation between Member States.   

Second,  regarding  problem  driver  3  a  general  principle  of  mutual  recognition  of  insurance 
coverage obtained in another Member State is established but Member States have not put it 
into practice. Insurers are mostly driven by domestics markets and have no incentive to help 
SMEs  going  cross-border  with  proportionate  solutions.  Without  the  introduction  of  specific 
rules to address these issues, the situation is likely to continue, making it difficult for cross-
border  service  providers  to  get  the  required  insurance  coverage  or  forcing  them  to  acquire 
expensive coverage, not suited to their needs. 

Finally,  regarding  problem  driver  4  a  few  of  the  restrictive  regulatory  conditions  identified 
could also be addressed through enhanced and continued enforcement action against Member 
States.  For  example,  about  40  EU  pilot  procedures  have  been  launched  in  relation  to 
compliance  with  Articles  14,  15,  16  and  25  of  the  Directive.  This  includes,  for  example, 
enforcement  action  against  unjustified  or  disproportionate  legal  form,  shareholding, 
management  and  multidisciplinary  restrictions.  Nevertheless,  while  enforcement  may  help 
remove disproportionate restrictions, it would not  eliminate all  regulatory divergence across 
Member States. Service providers would thus continue to face diverging access conditions for 
the foreseeable future. 

In  addition,  the  Commission  also  issued  country  specific  recommendations  related  to  these 
issues which were not implemented by Member States or only to a limited extent.  This work 
stream  will  soon  be  complemented  through  forthcoming  specific  recommendations  to 

79 Allocative efficiency reflects the extent to which productive factors are allocated towards their most 
efficient  use  (based  on  the  market  shares  of  more  versus  less  productive  firms)  and  thereby  constitutes  a  key 
measurement of the efficiency of a given economic sector. 
80 OECD, "Service regulation and growth", 2010 and IWP, "Services Liberalisation in Germany – Overview and 
the potential of deregulation", 2015 
81 European Commission, "The Economic Impact of Professional Services Liberalisation", 2014 

30 

 
 
                                                 
Member  States  as  regards  specific  reform  needs  on  the  regulation  of  seven  professions, 
including architects, engineers and accountants. These specific recommendations take account 
of the whole regulatory framework applicable to the profession in question in each Member 
State, including legal form, shareholding and multidisciplinary restrictions.    

3.  Need for action at EU level 

3.1.  Legal base for the EU to act 

Depending  on  the  policy  option  chosen,  this  initiative  could  propose  that  the  Union  takes 
legislative  action  in  accordance  with  Article  4(2)(a)  TFEU  in  order  to  facilitate  the  free 
movement  of  services  within  the  single  market,  further  developing  and  implementing  the 
general  principles  of  right  of  establishment  and  freedom  to  provide  cross-border  services 
enshrined in Articles 49 and 56 TFEU, respectively, as well as in the Services Directive. This 
legislative initiative could be comprised  of a Directive, introduced  under Articles 50(1) and 
53(1) TFEU, for matters dealing with access to services markets, and a Regulation, introduced 
under Article 114 TFEU, including provisions facilitating administrative formalities.  

3.2. Value-added of action at EU-level  

There  is  value  added  in  addressing  the  problems  described  at  EU  level  rather  than  through 
individual  Member  States’  actions.  Many  Member  States  have  not  specifically  tackled  the 
barriers  addressed  by  this  initiative.  The  current  situation  is  characterised  by  insufficient 
common  trust,  as  a  result  of  which  Member  States  continue  to  impose  their  domestic 
requirements on service providers with little or no regard to the regulatory framework already 
imposed on the service provider in other Member States where he/she is established. Potential 
Member  States'  solutions  for  regulatory  and  administrative  simplification  would  also  differ 
across Member States. EU action would ensure that service providers can benefit from a less 
divergent approach across Member States when expanding across borders. 

Against  this  background,  various  political  calls  have  been  made  by  the  European  Council82 
and  the  Competitiveness  Council83  to  provide  targeted  solutions  to  simplifying  access  to 
services sectors. 

4.  Objectives 

4.1.  Policy objectives 

The general objectives of this initiative are to enhance market integration in business services 
and construction and improve productivity growth in both sectors. 

82 See conclusion 19 of the European Council conclusions of 25 October 2013, available at 
https://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/139197.pdf 
83 See conclusion 8 of the Competitiveness Council conclusions of 3 December 2013 on Single Market Policy, available at 
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/intm/139846.pdf. See also See conclusion 18 of the 
Competitiveness Council conclusions on Single Market Policy of 3 March 2015, available at 
http://www.consilium.europa.eu/en/meetings/compet/2015/03/st06715_en15_pdf/ 

31 

 
 
                                                 
Building  on  the  identified  problem  drivers  which  identified  certain  obstacles  to  the  single 
market in business services and construction, the specific objectives of this initiative are to:  

  Objective 1: Make it easier and less costly for companies to provide services in other 

Member States. 

Problem drivers 1, 3 and 4 highlighted concrete difficulties that individual service providers 
potentially  face  when  starting  to  provide  services  in  another  Member  State.  These  are  of 
administrative and regulatory nature (including insurance requirements). This initiative aims 
to provide practical solutions that make it easier and less costly for a service provider to go 
cross-border.  

  Objective  2:  Inject  more  confidence  in  the  market  towards  foreign  service  providers 

by increasing transparency and available information 

A  lack  of  well-structured  mechanisms  for  cooperation  between  Member  States  (problem 
driver  2)  and  specific  issues  related  to  insurance  (problem  driver  3)  create  obstacles  for 
service  providers  to  go  cross-border.  In  addition,  they  also  limit  information  available  for 
consumers and overall transparency on cross-border service providers.  

On the one hand, the lack of cooperation between Member States leads to a situation whereby 
existing information on service providers is not always offered to the host Member State and 
their  consumers  in  a  transparent  way.  This  includes  information  available  to  the  home 
Member  States'  authorities  on  the  track  record  and  good  repute  of  the  service  provider.  In 
addition, this also includes specific issues on insurance (e.g., information on whether service 
providers  have  an  adequate  insurance  coverage).  This  lack  of  information  and  transparency 
potentially harms confidence in the market towards foreign service providers. This initiative 
aims to provide practical solutions for this as well.      

  Objective  3:  Enable  increased  market  dynamics  and  competition  leading  to  more 

choice and value added for customers (linked to problem drivers 1 and 4).         

Problem  drivers  1  and  4  make  it  difficult  for  service  providers  to  go  cross-border.  This  not 
only  increases  costs  for  these  individual  service  providers  but  also  leads  to  more  macro-
economic effects of subdued competition, with negative effects for consumers.  In particular 
regarding  problem  driver  4,  these  effects  are  not  constrained  to  the  single  market  but  also 
have a negative influence on the domestic market. In view of this, this initiative tries to enable 
increased  market  dynamics  and  competition  leading  to  more  choice  and  value  added  for 
customers. 

4.2. Consistency  with  other  EU  policies  and  the  Charter  for  fundamental 

rights 

There  are  a  number  of  forthcoming  initiatives  of  the  Commission  which  are  related  to  the 
initiative under analysis here. As regards IT platforms, these include the Electronic Exchange 
of Social Security Information (EESI) system, initiatives on the interconnection of company 
registers  (BRIS)  and  the  extension  of  the  Mini  One  Stop  Shop  for  VAT.  The  EESI  system 
brings together more than 15,000 social security institutions through an electronic network as 

32 

 
 
of 2019. The transmission of A1 documents will happen exclusively through this channel and 
not through the European Services e-card (IMI). BRIS will be operational as of mid-2017 and 
offer  wider  access  to  company  data.  VAT  MOSS  will  reduce  costs  for  foreign  service 
providers in the area of VAT formalities as of 2021 onwards.    

In  addition,  a  few  actions  announced  in  the  Single  Market  Strategy  are  also  related  to  this 
initiative. 

The  Single  Digital  Gateway  (SDG)  aims  at  improving  access  to  online  information  for  all 
cross-border situations business and citizens are facing in the Single Market. As to business, 
this concerns information regarding starting and scaling up a business, employment of staff, 
taxation, selling products and providing services abroad, certification and labelling as well as 
funding opportunities. The initiative would also cover information relevant for citizens (such 
as  travelling,  work  and  retirement,  health  care,  etc.).  In  the  same  vein,  the  initiative  might 
cover  obligations  for  Member  States  to  put  in  place  and  to  optimise  national  online 
procedures  such  as  tax  registration  and  public  procurement.84  Finally,  existing  national  and 
European  e-government  portals  (such  as  points  of  contact  under  the  Services  Directive,  the 
product contact points, European Consumer Centres, YourEurope) would be strengthened and 
synergies built. The initiative is planned to be presented in spring 2017. Its scope (all business 
as  well  as  citizens)  is  much  broader  compared  to  the  two  services  sectors  dealt  with  in  this 
impact  assessment.  It  does  not  foresee  an  EU-level  procedure  allowing  for  case-by-case 
cooperation between Member States. On the other hand, both initiatives are building a more 
coordinated  e-governance  structure  at  European  level  and  in  Member  States  for  all  relevant 
single  market  areas,  including  services.  They  will  therefore  complement  each  other  in 
reducing administrative burden for service providers. Whereas the initiative under analysis in 
this  impact  assessment  aims  to  simplify  sector-specific  procedures  (e.g.  sector-specific 
licences), the SDG aims to allow service providers better access to information on applicable 
rules and more straightforward ways to complete horizontal procedures (e.g., registering for 
VAT).     

Under the Single Market Strategy, the Commission also announced guidance on reform needs 
for  regulation  of  professional  services.  The  Directive  on  the  recognition  of  professional 
qualifications (Directive 2005/36/EC) was subject to a major reform in 2013. That reform not 
only  introduced  the  European  Professional  Card,  it  also  imposed  obligations  for  Member 
States  to  launch  a  major  transparency  process  and  to  undertake  a  mutual  evaluation  of  all 
regulated  professions  (also  covering  areas  of  business  services).  In  December,  the 
Commission will present the results of the mutual evaluation and whether it sees further need 
for  reforms  of  regulated  professions.  The  purpose  of  this  guidance  is  primarily  to  promote 
national  reforms  (through  recommendations  rather  than  regulatory  means)  alongside  the 
country  specific  recommendations  the  Commission  presents  in  the  framework  of  the 
European Semester.  Accordingly, it is also complementary to the present impact assessment. 

84 These procedures addressed by the SDG initiative will largely concern horizontal business events like starting 
up, registering for VAT or social security and not sector specific ones as for this initiative. 

33 

 
 
                                                 
Consistency with these initiatives will be ensured by close cooperation with all departments 
and  DGs  concerned  within  the  Commission.  Regarding  the  Charter  of  fundamental  rights, 
several  of  its  provisions  will  be  implemented  by  this  initiative.  Further  information  is 
provided in annex 6. 

5.  Policy options 

5.1. Baseline scenario: No EU policy change 

This  option  means  no  new  action  will  be  taken  at  EU  level  and  serves  as  the  benchmark 
against which the other options will be assessed, as described under section 2.3. This includes 
continuing the recent active enforcement policy against the most restrictive requirements. 

5.2. Overview of different policy options 

The  policy  objectives  can  be  addressed  through  a  combination  of  different  policy  options. 
These  options  will  be  described  in  section  5.3.  Potential  combinations  of  the  options 
("packages") will be outlined in section 5.4. The impact of these packages of options will be 
described in section 6. 

The following policy options will be outlined: 

1.  A European Services e-card attesting legal establishment; 
2A. A European Services e-card for a more ambitious administrative simplification; 
2B.  Action  to  address  regulatory  obstacles  for  providers  in  key  business  services 

wanting to set up foreign branches and agencies; 

3.  Actions to facilitate access to insurance in a cross-border context; 
4.  Harmonisation of requirements for certain business services. 

The  scope  of  sectors  addressed  by  the  options  1,  2A  and  3  is  business  services  and 
construction. These options focus on administrative simplification. Options 2B and 4 have a 
more narrow scope, focusing on a limited number of regulatory obstacles in certain business 
services  (accountants,  architects  and  engineers).  The  reasons  for  this  more  narrow  scope 
(regarding options that address regulatory obstacles) have been outlined in problem driver 4.    

5.3. Description of policy options 

5.3.1.  Policy option 1: European services e-card attesting legal establishment 

Purpose  

The purpose of this option would be to offer an electronic certificate to a service provider to 
demonstrate  in  which  Member  State  he/she  is  established.  To  this  end,  he/she  would  be 
entitled to obtain a standardised electronic certificate, called a European services e-card. The 
certificate  would  attest  to  legal  establishment  in  a  ("home")  Member  State  within  the 
framework of the Services Directive. By doing so, it would also increase trust with regard to 
the  service  provider  in  the  host  Member  State.  In  addition,  if  (in  compliance  with  data 

34 

 
 
protection  rules)  the  fact  that  a  service  provider  holds  a  card  is  made  known  to  service 
recipients, these service recipients may feel more willing to hire them. 

The card would be issued by the home Member State' authorities to the service provider and 
would  be  valid  throughout  the  European  Union.  Any  Member  State  to  which  the  service 
provider would like to expand operations, temporarily or through a secondary establishment, 
("the  host  member  State")  would  have  to  accept  the  certificate  as  proof  of  establishment. 
Accordingly, a host Member State would not (within the framework of the Services Directive) 
be  allowed  to  contest  or  require  further  evidence  in  relation  to  the  fact  that  the  provider  is 
legally  established  in  the  home  Member  State.  A  host  Member  State  would  continue  to 
impose on service providers those requirements under its national law that apply in line with 
the Services Directive before he/she/it can start doing business. As a result, Option 1 would 
not  facilitate  life  for  service  providers  in  those  situations  in  which  a  host  Member  State 
requires a prior authorisation before a service activity can commence in its territory.  

Voluntary nature 

The  certificate  would  be  a  voluntary  tool  the  service  provider  can  use  or  not.  The  home 
Member State would be required to issue it if a service provider requests so. If a service has 
not  requested  such  certificate,  a  host  Member  State  should  allow  him/her  to  proof  legal 
establishment by other appropriate means.  

Contents  

The certificate would include the following information about a service provider:  

 

Identification,  such  as  name,  legal  form,  registered  office  (address),  business 
registration number; VAT registration number85.    

  Legal  establishment  in  the  home  Member  State  for  the  provision  of  the  service  in 

 

 

question, such as mandatory licences, mandatory chamber membership(s). 
In the case of companies, the corporate structure of the service provider such as legal 
form, shareholding/voting rights structure, management and (corporate) purpose of the 
company;  
Information  about  the  good  repute  of  the  provider  (track  record  about  criminal, 
administrative  and  disciplinary  sanctions  relevant  for  the  activities  carried  out  by  a 
service provider). 

Member States would be required to screen and inform the Commission of all the conditions 
relevant for attesting legal establishment under their legislation in the implementation phase 
prior to the launch of the initiative. The goal is  to  offer a uniform certificate containing  the 
information above.  

85  As  from  2021,  it  is  expected  that  following  an  upcoming  proposal  for  extending  VAT  MOSS  to  other 
electronic  commerce  providers  and  service  providers85  market  participants  offering  their  services  to  end 
consumers  on  a  temporary  cross-border  basis  in  another  Member  State  could  use  the  Mini-One-Stop-Shop 
System  (MOSS);  use  of  such  system  would  require  a  registration  with  MOSS.  An  indication  that  the  service 
provider is registered for the MOSS could be added to the certificate in the future. The system will allow online 
verification by the host Member State of the validity of the VAT number.. 

35 

 
 
                                                 
Scope  

Such  certificate  would  be  offered  to  service  providers  in  business  services86  and 
construction87 which are currently governed by the Services Directive and are not subject to 
specific EU legislation pertaining to internal market integration. It would be available to both 
natural persons (self-employed, including those involved in unincorporated partnerships) and 
legal persons88 (companies, including incorporated partnerships).  

Operational part89   

1) A service provider can apply for such a certificate online. To this end, an application form 
would be offered. The form should be the same for all Member States and it should reflect all 
components relevant for each Member State in relation to the service(s) in question.     

2)  When  an  application  is  made,  the  home  Member  State  would  be  required  to  issue  a 
certificate if the conditions of legal establishment in its jurisdiction are met. All other Member 
States  should  accept  such  a  certificate  as  proof  of  legal  establishment  in  the  home  Member 
State.  

3) The entire workflow would be an electronic process using the functionalities of the Internal 
Market  Information  System  (IMI)  and  a  public  interface  linked  to  it,  available  online90  to 
interested service providers.  

4)  A  coordinating  authority  in  the  home  Member  State  should  be  designated  as  the  single 
interlocutor  for  the  service  provider.  Such  authority  would  ultimately  be  responsible  for 
verifying  and  completing  the  information  provided  by  the  service  provider.  To  this  end,  it 
would communicate with the competent authorities in the home Member State (either through 
IMI or national channels). 

5)  The  home  Member  State  should  ask  for  documents  supporting  an  application  for  a 
European  services  e-card.  It  may  require  that  such  documents  are  available  in  its  official 
language. It may not require translation to the language of other (host) Member States. Those 
documents  would  remain  available  to  the  home  Member  State  only  and  would  not  be 
transmitted to other Member States. 

86 As defined making use of NACE rev. 2 codes (Division 62 and 63 of Section J and Sections M and N) , save 
for  those  entirely  excluded  from  the  Services  Directive  (such  as  notaries,  private  security  services,  temporary 
employment agencies) or only partially given they are mostly governed by sector-specific EU legislation (such 
as  trust  services  under  Regulation  (EU)  910/2014,  technical  testing  and  analysis  under  Regulation  (EC) 
765/2008,  lawyers  under  Council  Directive  77/249/EEC  and  Directive  98/5/EC  and  statutory  auditors  under 
Directive  2006/43/EC),  as  well  as  excluding  services  not  habitually  regarded  as  business  services,  such  as 
veterinary services and renting and leasing of personal and household goods 
87  As  defined  under  NACE  rev.2  codes  (Section  F)  including  construction  of  buildings,  civil  engineering  and 
specialised  construction  activities,  excluding  installation  of  F-gas  equipment  by  natural  persons  (governed  by 
Regulation (EU) 517/2014). 
88 As defined by Article 54 TFEU and not limited to those listed in Directive 2009/101/EC. 
89 See procedural flowchart in Annex 7 of the Impact Assessment. 
90 A public online interface linked to IMI is available on the YourEurope-Website. This model could be taken as 
a starting point.   

36 

 
 
                                                 
6)  In  order  to  reduce  the  need  for  supporting  documents,  information  already  available  to 
competent  authorities  of  the  home  Member  State91  would  not  have  to  be  submitted  by  the 
service provider when submitting the application:  

-  The  home  MS  should  use  information  available  to  other  national  authorities  to 
complete the application, unless specific national laws (tax secrecy, data protection) 
prevent  such  data  processing.  This  information  includes  data  previously  made 
available  by  the  service  provider  to  the  authorities  as  well  as  information  already 
available in the administrations themselves if this information is updated; 

-  Similarly,  information  available  via  the  Business  Registers  Interconnection  System 
(BRIS)  –  to  be  operational  in  201792  –  and  the  interconnection  of  insolvency 
registers93  should  also  be  used  if  technically  feasible  by  coordinating  authorities  to 
complete the application or  cross-check information. 
If  applicable,  the  service  provider  can  also  reuse  data  already  provided  under  the 
European Single Procurement Document (ESPD) introduced in April 2016. 

- 

7) The coordinating authority in the home Member States can charge fees proportionate to the 
cost for issuing a certificate. 

8) A certificate must be issued within one week94 of submission of a complete application.  

9) The certificate under the name European Services e-card would be accessible in all official 
languages  of  the  European  Union,  by  making  use  of  multilingual  forms.  It  would  be  made 
available via IMI to all other Member States.   

10)  The  certificate  would  be  valid  for  as  long  as  legal  establishment  in  the  home  Member 
State persists. It should be updated by the coordinating authority in the event of information 
changes (for instance change of corporate structure and registration numbers), either ex officio 
or upon request of the card holder.   

11) The certificate would be suspended or revoked by the home Member State if changes to 
the underlying facts  require so, again either ex officio or upon request of the card holder: 

(i)  determination  that  the  holder  of  the  card  made  use  of  fraudulent,  inaccurate  or 
falsified information while applying for the card; 

(ii) sanctions imposing a temporary or permanent ban on provision of services;  

(iii) permanent shut down of activities in that Member State, including winding-up and 
dissolution of a legal person; 

91 This information includes data previously made available by the service provider to the authorities as well as 
information already available in the administrations themselves. 
92 As of June 2017, BRIS will make available information which limited liability companies are obliged to file 
with  the  business  registers  in  accordance  with  EU  law  (Directive  2009/101),  e.g.  name,  company  registration 
number, legal form, address of the registered office. 
93 Implementing Acts of Article 25 of Regulation 2015/848 shall be adopted by 26 June 2019. 
94  Provided  the  conditions  for  legal  establishment  are  met.  Deadlines  should  be  reconsidered  in  the  periodic 
reviews– see section 8 of the Impact Assessment 

37 

 
 
  
                                                 
(iv)  displacement  of  place  of  establishment  to  another  Member  State  or  to  a  third 
country; 

(v) determination that the holder of the card is a worker, rather than a self-employed 
person; 

(vi) cessation of establishment for any other reason. 

12) Depending on the technical functionalities of interconnected registers such as BRIS and 
insolvency  registers,  updates  to  the  information  contained  in  the  certificate  may  occur 
automatically. The service provider will in any event be obliged to report to the coordinating 
authority  any  relevant  event  impacting  the  information  contained  in  the  certificate.  The 
service provider  would be subject to fines for  not  doing  so. The host Member States  which 
received  the  European  services  e-card  would  also  be  required  to  exchange  relevant 
information with the home Member State regarding their own supervision of service providers 
holding a card and providing services in their territory without any delay.   

5.3.2.  Policy  option  2A:  A  European  services  e-card  for  a  more  ambitious 

administrative simplification 

Purpose  

The purpose of this option 2 would be to build on the certificate presented under option 1 but 
to  be  more  ambitious.  The  European  Services  e-card  should  not  only  attest,  throughout  the 
Union,  to  legal  establishment  of  its  holder in  the  home  Member  State, but  also  be a  tool to 
support service providers who intend to expand operations in their relations with host Member 
States.  Therefore  the  underlying  procedure  prior  to  the  issuance  of  such  a  Card  would  be 
different compared to option 1.  In contrast to option 1, the European services e-card offers 
additional legal certainty to service providers within a short timeframe about whether they are 
deemed to comply with any requirements that may apply before they can expand activities to 
another Member State or not. The European services e-card shall prove this compliance vis a 
vis  authorities  and  service  recipients  on  the  territory  of  the  host  Member  State.  Service 
providers  holding  the  card  will  acquire  the  right  to  start  provision  of  services  in  the  host 
Member  State,  either  temporarily  or  through  a  secondary  establishment.  Service  recipients 
will gain enhanced trust in cross-border service providers holding the card and may thus feel 
more willing to hire their services. 

When indicating which requirements are applicable in its territory and which requirements are 
deemed to be complied with by the card holder, the host Member State must fully respect the 
provisions of the Services Directive.   

Voluntary nature 

The European services e-card would be a voluntary tool that service providers can use or not. 
If  a  service  provider  has  not  requested  a  card,  host  Member  States  would  require  that  the 
provider shows compliance with those requirements that may apply in line with the Services 
Directive before he/she/it can start doing business in the same way as they do now.   

38 

 
 
 
Scope 

There would be no differences in scope compared to option 1. The scope of this option would 
also be the same for cases of temporary cross-border provision and secondary establishment.  

Impact on prior control schemes in the host Member State 

More  generally,  the  host  Member  State  would  not  be  allowed  to  use  this  initiative  for 
introducing new prior controls that are not in line with EU law on foreign service providers.  
If  national  law,  including  administrative  practice,  currently  imposed  such  prior  controls  to 
start  doing  business,  the  future  card  procedure  would  replace  such  controls  95.  In  assessing 
applications for the European services e-card, Member States shall retain the right to invoke 
overriding reasons of public interests recognised under Directive 2006/123/EC, in particular 
Article 16 thereof, or other acts of EU law. 

In addition, service providers would benefit from the following simplification96 : 

  uncertainty  as  to  which  requirements  apply  when  going  cross-border  (host  Member 
States will be obliged to clarify which requirements apply in their specific situation); 
filling-in  disparate  forms  in  foreign  languages  (applicants  would  rather  fill-in  one 
harmonized  form  in  their  own  language,  to  be  automatically  translated  as  a 
multilingual form and partially completed by the home MS); 

 

  producing various supporting documents (the declarations in the form, attested by the 
home MS, will serve as sufficient proof in most cases - exceptionally documents will 
need to be uploaded, but the administration in the home Member State administration 
will upload documents in its possession); 
translating,  certifying/authenticating  documents  (documents  would  be  accepted  in 
simple format); 

 

  producing original or certified copies of documents (documents would be accepted in 

simple copy format); 

  non-electronic  procedural  steps,  sometimes  requiring  the  physical  presence  of  the 
service provider (all card procedural steps will be fully electronic and at a distance) 
relating  to  foreign  and  foreign-speaking  host  MS  authorities  (card  applicants  would 
instead talk to  just one coordinating authority, in their home MS, in  the language of 
that home MS). 

 

The  holder  of  a  European  services  e-card  would  however  not  been  exempted  from  ex-post 
controls  which  may  be  applicable  to  service  providers  to  the  extent  that  they  are  compliant 
with  EU  law.    Host  Member  States  will,  however,  not  be  allowed  to  replicate  controls  on 
issues already addressed by the issuance of a European services e-card. For instance, if a host 

95  Not  for  services  provided  under  a  public  contract,  already  governed  in  detail  under  EU  or  national 
procurement law and not for services provided pursuant to selection procedures in the context of authorisations 
limited  in  number.  Such  controls  shall  remain  in  place  since  their  particular  complexity  cannot  be  suitably 
accommodated by the simple and expeditious procedural workflow of issuing a European Services Card. 
96 See quantitative and qualitative examples of impact of these simplification features in Annex 5 of this impact 
assessment. 

39 

 
 
                                                 
Member  State  failed  to  act  within  the  prescribed  timelines,  it  cannot  come  back  on  the 
grounds  on  which  it  could  have  opposed  the  issuance  of  a  European  services  e-card, 
retroactively revoking it, unless it is proved that the information provided to it was erroneous. 

Other controls schemes and formalities required when starting doing business under national 
law governed by other horizontal pieces of legislation rather than the Services Directive, such 
as recognition of professional qualifications under the Directive on recognition of professional 
qualifications,  registration  of  legal  persons  and  branches  under  EU  (and  national)  company 
law97  and  tax  and  social  security  registrations,  would  however  remain  applicable.  These 
additional control schemes and formalities should still be complied with, including once the 
card  has  been  issued  and  before  service  provision  has  started.  However,  the  host  Member 
State would be obliged to accept the information in the certificate of legal establishment in the 
context of these other control schemes and formalities. This way, the service provider would 
be  required  to  submit  the  same  information  only  once.  At  the  same  time,  this  would  not 
prejudice the ability of competent authorities responsible to ask the service provider for other 
information that is required under national substantive requirements under these other control 
schemes and formalities. 

Furthermore,  technical  facilities  regarding  the  secondment  of  staff  could  also  be  made 
available as associated modules to the card. The functionalities of this option for temporary 
cross-border  provision  (5.3.2.1)  and  secondary  establishment  (5.3.2.2)  will  be  described 
separately. The possible technical facilities linked to secondment of staff will be described in 
section 5.3.2.3.  

5.3.2.1.  A  European  Services  e-card 

for  temporary  cross-border 

provision 

A service provider holding a European services e-card issued by the home Member State for 
temporary  cross-border  provision  would  be  allowed  to  start  doing  business  in  a  given  host 
Member  State  without  further  control  schemes  and  formalities  falling  under  the  Services 
Directive.  Existing  controls  that  may  exceptionally  apply  to  start  doing  temporary  cross-
border  business  would  be  replaced  by  the  controls  prior  to  issuing  the  card  introducing  a 
streamlined EU-level procedure. This procedure would frame the application of Art. 16 of the 
Services  Directive  in  order  to  remove  the  current  uncertainty  temporary  cross-border 
providers  face.  In  the  few  Member  States  where  specific  rules  for  temporary  cross-border 
services  have  been  introduced,  current  controls  in  the  host  Member  State  would  be  simpler 
and faster.  

Impact on prior controls and requirements applicable in the host Member State  

If a service provider chooses to apply for a European services e-card, he chooses a European 
workflow in which the home Member State clarifies the legal situation in its home Member 
State and the host Member State needs to react quickly whether there are reasons to object to  

97 Directives 2009/101/EC and Council Directive 89/666/EEC. The company law initiative to further facilitate 
the use of digital solutions throughout a company's lifecycle, announced in the Commission Work Programme 
for 2017, will, among others, address the issue of online company registration. 

40 

 
 
                                                 
the service provider starting doing business and judge within a short timeframe whether such 
refusal is justified within the boundaries of the Services Directive, notably Article 16 thereof. 
If the host Member State fails to act within prescribed time limits, a European services e-card 
is issued to the interested service provider by the home Member State and the host Member 
State can no longer challenge such a card unless it is proved that it was issued on the basis of 
erroneous  information  or  that  the  provider  no  longer  meets  the  necessary  conditions.  This 
does  not  preclude  a  host  Member  State  from  applying  requirements  and  ex-post  controls  if 
compatible with Article 16 of the Services Directive.   

Contents of a European services e-card for temporary cross-border services 

A certificate attesting legal establishment in the home Member State would, naturally, include 
the same information regarding legal establishment as in option 1.  

Operational part98 

1)  The  European  services  e-card  would  build  on  the  certificate,  as  described  in  option  1. 
When  applying,  the  service  provider  should,  in  addition  to  the  service  activity  in  question, 
also  indicate  the  envisaged  host  Member  State.  On  the  basis  of  this  choice,  the  card 
application would be complemented by additional information  on legal establishment in  the 
home Member State which may be relevant for the given host Member State to have99; 

2) The procedure unfolds in IMI as described under option 1 (points 2) to 9));  

3) The home Member State verifies and completes the certificate attesting legal establishment. 
The  certificate  should  be  subsequently  transferred  to  the  coordinating  authority  of  the  host 
Member State; 

4) The coordinating authority in the home Member State would remain the single interlocutor 
for the provider, and would communicate with its counterpart in the host Member State. Each 
coordinating authority in the home and in the host Member States would communicate with 
competent  authorities  in  their  respective  Member  States  (either  through  IMI  or  national 
channels) in charge of the various pieces of information; 

5)  In  line  with  Article  16  of  the  Services  Directive,  the  host  Member  State  may  only  very 
exceptionally impose requirements strictly based on reasons related to public security, public 
order,  public  health  or  protection  of  the  environment  to  be  respected  by  a  foreign  service 
provider100.  Under  the  card's  workflow,  the  host  Member  State  should  clearly  provide 
information on such exceptional requirements to the card's applicant (in the IMI application, 
which  is  then  machine-translated)  within  two  weeks  (extendable  by  two  additional  weeks) 
from receiving the attestation of legal establishment from the home Member State. This way 

98 See procedural flowchart in Annex 7 of the Impact Assessment. 
99  Member  States  would  be  required  to  inform  the  Commission  of  such  pieces  of  information  in  the 
implementation phase of the initiative. 
100 Inspection of compliance with these requirements shall take place through ex post checks and controls in the 
host Member State, not through the Card procedure which, as explained, only includes a simple check of entry 
by the host Member State based on attestation of legal establishment in the home Member State. 

41 

 
 
                                                 
the  service  provider  will  know  which  requirements  he/she/it  has  to  comply  with  once 
provision of services starts in the host Member State101;   

6)  Where  needed,  authorities  in  the  host  Member  State  may  ask  for  clarifications  and 
additional  information  to  carry  out  that  assessment102.  Such  requests  would  suspend  the 
deadline  for  reaction  by  the  host  Member  State.  Suspension  will  cease  once  the  service 
provider (home Member State) provides answers to these questions. The home Member state 
should provide clarifications and additional information within a reasonable period in order to 
avoid lengthy procedures;  

7)  Under  the  workflow  proposed  under  point  6,  authorities  in  the  host  Member  State  may 
then, via IMI, refuse that a service provider starts doing business if, considering the specific 
circumstances  of  the  card's  applicant,  service  provision  may  not  start  without  seriously 
endangering public security, public order, public health or protection of the environment (in 
accordance  with  Article  16  of  the  Services  Directive).  A  card  would  hence  not  be  issued  if 
such refusal is substantiated. The service provider can appeal such refusal by the host Member 
States before their courts;   

8)  The  coordinating  authority  of  the  home  Member  State  issues  the  card  unless  the  host 
Member  State,  within  two  weeks103  from  receiving  the  completed  and  verified  application 
form, attesting legal establishment, refuses that the service provider starts doing business. In 
case there is no action by the host Member State after two weeks, the system will provide an 
alert  after  which  the  host  Member  State  will  be  allowed  two  additional  weeks  for  possible 
refusal.  The  refusal  is,  however,  only  admissible  if  at  least  one  reason  related  to  public 
security, public order, public health or protection of the environment has been substantiated 
and a proportionality assessment has been provided in IMI. Thus, a host Member State cannot 
simply "block" the issuance of a card but offer a substantiated refusal which a foreign service 
provider can challenge before national courts in a host Member State. The European services 
e-card will be issued either by the home Member State or automatically within the IMI system 
if  there  is  no  refusal  (during  the  deadline  of  two  plus  two  weeks  mentioned  above)  or  if  a 
refusal is left entirely without substantiation. Issuing the card in such situations would lead to 
more  legal  certainty.  Currently,  many  Member  States  do  not  distinguish  between 
establishment  and  temporary  cross-border  situations,  creating  great  uncertainty  as  to  which 
controls  and  requirements  apply104  and  forcing  service  providers  to  either  establish  or  risk 
providing services temporarily uncertain of whether they do so legally. 

9)    The  host  Member  State  has  accordingly  to  allow  the  holder  of  the  card  to  start  doing 
business, temporarily (without establishing there);   

101  Information  may  be  given  by  referring  to  relevant  national  websites,  namely  the  PSC,  if  this  information 
appears  in  a  complete  and  updated  form  (even  if  it  is  only  available  in  a  language  foreign  to  the  applicant). 
However, the absence of information by the host Member State on its own does not impede the issuance of the 
card. 
102 They should make use of all available interconnections of national registers (e.g. of business registers (BRIS) 
or of insolvency registers) before any other means of obtaining or verifying the previously obtained information. 
103 Deadlines should be reconsidered in the periodic reviews– see section 8 of the Impact Assessment.  
104 see section 2.2.1 and Annex 5 of this impact assessment 

42 

 
 
                                                 
10) The Card should be updated by the coordinating authority in the home Member State if 
information  changes  (for  instance  change  of  corporate  structure  and  registration  numbers), 
either ex officio or upon request of the Card holder105.   

11) The Card would also be suspended or revoked by the home Member State if changes to 
the underlying facts require so, again either ex officio or upon request of the Card holder, as 
described in point 11 of option 1. In the event of serious problems with a service provider on 
the territory of the home Member State, all e-cards would be suspended or revoked.   

However, if the card holder breaches requirements in the host Member State the host Member 
State  may  request  suspension  or  revocation  of  the  Card  by  the  home  Member  State,  for 
instance in the event of: 

(i)  breach  of  requirements  imposed  on  temporary  cross-border  provisions  the 
compliance of which is essential to continued legal provision of services in question in 
the territory of the host Member State; 

(ii) sanctions imposing a temporary or permanent ban on provision of services in the 
host Member State; 

(iii) determination that the holder of the card is a worker, rather than a self-employed 
person, in the host Member State. 

In the event of serious problems with a service provider on the territory of the host Member 
State,  e-cards  would  be  suspended  or  revoked  with  effect  for  the  host  Member  State 
concerned.  

12) Depending on the technical functionalities of interconnected registers such as BRIS and 
insolvency  registers,  updates  to  the  information  contained  in  the  certificate  may  occur 
automatically. The service provider will in any event be obliged to report to the coordinating 
authority  any  relevant  event  impacting  the  information  contained  in  the  certificate.  Host 
Member  States  would  also  be  required  to  exchange  relevant  information  with  the  home 
Member  State  regarding  their  own  supervision  of  service  providers  holding  a  card  and 
providing services in their territory without any delay, requesting suspension or revocation of 
the card whenever appropriate.  

5.3.2.2.  A European services e-card for secondary establishment 

The  host  Member  State  would  issue  a  European  services  e-card  valid  for  its  territory.  A 
service  provider  holding  such  a  card  would  be  allowed  to  set  up  such  a  secondary 
establishment  (branch  or  agency106)  in  the  host  Member  State  concerned  and  would  not  be 

105 Depending on the technical functionalities of interconnected registers such as BRIS and insolvency registers, 
updates to the information contained in the certificate may occur automatically. 
106 This option does not address subsidiaries – the card procedure is, at least in a first stage, to be kept simple and 
focus  on  barriers  with  a  particular  impact  on  cross-border  situations,  in  the  context  of  the  Services  Directive. 
This is generally not the case for barriers impacting the setting up of a subsidiary, given that; 
a) a subsidiary is often not a wholly owned subsidiary but can have different shareholders, such as from the host 
Member State  ; 

43 

 
 
                                                 
subject to additional control schemes and formalities to start doing business which a Member 
State may today impose in accordance with the Services Directive. The card would also grant 
the right to set up additional branches or agencies in the host Member State, in case a specific 
authorisation is not required for this107. 

Impact on prior controls and requirements of the host Member State 

Unlike  in  cases  of  temporary  cross-border  provisions,  a  host  Member  State  may  impose  a 
larger number of requirements on incoming service providers wishing to establish (such as for 
reasons  related  to  protection  of  service  recipients).  Requirements  which  must,  nevertheless, 
comply with relevant EU Law, notably the Services Directive. The home Member State shall 
not  control  requirements  applicable  under  host  Member  State  law.  Therefore,  the  card 
procedure must allow for a prior check by the host Member State of any requirements which 
must  be  checked  before  provision  of  services  starts  (such  as  requirements  on  legal  form, 
shareholding/voting rights, management, multidisciplinary restrictions).  

Nevertheless  a  host  Member  State  should  be  prevented  from  requiring,  as  a  first  step, 
registration of a branch under company law before assessing the application for a European 
services card. 

Contents of a European services e-card for secondary establishment  

The  certificate  attesting  legal  establishment  in  the  home  Member  State  would  include  the 
same information regarding legal establishment as in option 1. However, since the card, once 
issued,  would  also  allow  the  card  holder  to  establish  in  another  Member  State,  information 
regarding  compliance  with  the  requirements  of  that  host  Member  State  should  also  be 
included in the card.  

Operational part108 

1)  The  European  services  e-card  issued  by  the  host  Member  State  would  build  on  the 
certificate of legal establishment, as described in option 1109. A service provider should apply 
for the card in the same way as in applying for a card for temporary cross-border provisions. 
It  may  be  complemented  by  additional  information  on  legal  establishment  in  the  home 
Member State which is relevant for the host Member State to have110.  

b) setting up a subsidiary through incorporation of a company is often controlled in a manner intrinsically linked 
to company law controls on creating a company; 
c)  setting  up  a  subsidiary  through  purchasing  a  control  stake  in  a  previously  established  company (a  common 
way  of  setting  up  a  subsidiary)  has  very  specific  controls  in  place  under  a  particular  regulatory  environment 
outside of the Services Directive. 
107  In  accordance  with  Article  10(4)  of  the  Services  Directive.  If  a  specific  authorisation  is  required  for  each 
branch or agency, the service provider will have the choice to either apply for a European services card for each 
branch or agency or follow the national authorisation scheme.  
108 See procedural flowchart in Annex 7 of the Impact Assessment. 
109 By demonstrating actual establishment in the home Member State, this certificate would operate to prevent 
circumvention  of  host  Member  State  rules  (through  forum  shopping).  Letter  box  companies  set  up  in  a  home 
Member State will thus not be allowed to hold a card.  
110  Member  States  would  be  required  to  inform  the  Commission  of  such  pieces  of  information  in  the 
implementation phase of the initiative. 

44 

 
 
                                                                                                                                                         
2)  At  a  first  stage,  the  procedure  unfolds  in  IMI  via  the  home  Member  State  authority  as 
described  under  points  2)  through  9)  of  option  1.  The  home  Member  State  verifies  and 
completes the certificate attesting legal establishment.  

3)  Once  legal  establishment  in  the  home  Member  State  is  attested  and  additional  relevant 
information  provided,  the  completed  and  verified  application  form,  already  attesting  legal 
establishment in the home Member State, would be transferred to a coordinating authority of 
the  host  Member  State  to    decide  whether  to  issue  a  card;  Communication  between 
coordinating  authorities  would  take  place  in  a  similar  fashion  as  in  temporary  cross-border 
situations, for clarification and supplementing purposes; 

4)  Within  four  weeks  from  receiving  the  application,  the  coordinating  authority  of  the  host 
Member State should assess such application. In case there is no reaction by the host Member 
State after four weeks, the system will provide an alert after which the host Member State will 
be  allowed  two  additional  weeks  for  action.  While  checking  the  multilingual  information 
provided  regarding  the  service  provider's  legal  establishment  in  the  home  Member  State, 
authorities  in  the  host  Member  State  may  ask  for  additional  information  with  a  view  to 
performing mutual recognition. Such requests would suspend the deadline for reaction by the 
host Member State Suspension will cease once the home Member State provides answers to 
these questions. The home Member State should react within a reasonable period in order to 
avoid lengthy procedures; 

5)  Host  Member  State  authorities  may  come  to  the  conclusion  that  overriding  reasons  of 
general interest require the applicant to comply with host Member State requirements on top 
of the ones the applicant complies with in the home Member State. The coordinating authority 
in  the  host  Member  State  would  then  indicate  (in  the  IMI  application,  subject  to  machine-
translation) which additional requirements should be respected111; 

6)  The  deadline  for  the  coordinating  authority  of  the  host  Member  State  to  decide  on  the 
application (by either approving it or rejecting it) would be then suspended until compliance 
with such requirements is demonstrated therein. The service provider can appeal the refusal to 
issue  the  card  by  the  host  Member  States  before  their  courts.  If  no  decision  is  taken  by  the 
coordinating authority of the host Member State after expiration of the deadline of six weeks 
(four plus two, as described above) upon receiving the application or within one week after 
receiving  proof  of  compliance,  the  card  is  issued  automatically,  tacitly  allowing  for  the 
applicant to start doing business. 

7)    If  the  coordinating  authority  of  the  host  Member  State  informs  the  applicant  of  its 
intention  to  reject  the  application,  the  applicant  shall  have  time  to  present  observations, 
namely regarding equivalence of host Member State requirements with previously complied 
requirements in the home Member State. In light of the observations made, the authority shall 
be able to decide, within one week, whether to issue the card or reject the application. If the 

111 For such requirements imposed on the service provider to allow for business to start, the host Member State 
should respect the Services Directive, namely its Articles 10, 14, 15, 23 and 25. Information may be given by 
referring to relevant national websites, namely the PSC, if this information appears in a complete and updated 
form (even if it is only available in a language foreign to the applicant) 

45 

 
 
                                                 
authority does not react within this deadline, the card is issued automatically, tacitly allowing 
for the applicant to start doing business. 

8)  The  card  should  be  updated  by  the  coordinating  authority  in  the  host  Member  State  if 
information  changes  (for  instance  change  of  corporate  structure  and  registration  numbers), 
either ex officio or upon request of the card holder. The home Member State should cooperate 
in this regard.  

9) If changes occur to the underlying facts supporting the card in the home Member State, as 
described in point 11 of option 1, the coordinating authority there may request its counterpart 
in the host Member State to suspend or revoke the card. 

However,  the  host  Member  State  may  decide  to  allow  the  holder  of  a  European  services  e-
card to remain established in its territory, upon revocation of the card112.  

Furthermore,  if  the  card  holder  breaches  requirements  in  the  host  Member  State  its 
coordinating authority may, ex officio or at the request of the card holder, suspend or revoke 
the card, in the event of: 

(i)  breach  of  requirements  imposed  on  secondary  establishment  the  compliance  of 
which is essential to continued legal provision of services in question in the territory 
of the host Member State; 

(ii) sanctions imposing a temporary or permanent ban on provision of services in the 
host Member State; 

(iii) determination that the holder of the card is a worker, rather than a self-employed 
person, in the host Member State. 

5.3.2.3.  Technical facilities linked to secondment of staff 

Under  option  2,  the  European  services  e-card  and  underlying  procedure  could  be 
complemented  by  additional  technical  facilities  (set  up  in  separate  technical  modules)  for 
secondment of staff.  

These  modules  would  be  linked  to  obligations  set  out  by  the  following  rules  concerning 
posted workers and professional qualifications:    

-  Article  9(1)a  and,  where  applicable,  Article  9(2))  of  the  Posting  of  Workers 
Enforcement Directive, allowing host Member States to introduce a prior notification 
for controlling employment conditions113; and 

-  Article  7  of  the  2005  Professional  Qualifications  Directive,  providing  for  a  prior 

declaration on professional qualifications. 

112 In doing so, the host Member State may impose requirements on the service provider, in compliance with EU 
law. 
113  Only  information  requirements  under  Article  9(1)a  and  where  applicable  Article  9(2)  are  covered  by  this 
initiative,  without  prejudice  to  the  obligation  to  keep  and  make  available  certain  documents  translated  in  the 
local language during/after the posting period, such as employment contracts or timesheets as set out by Article 
9(1)b of the Enforcement Directive.  

46 

 
 
                                                 
Where  Member  States  have  set  up  procedures  that  allow  for  the  declaration  relating  to  the 
posting  of  workers  pursuant  to  Article  9  of  Directive  2014/67/EU  to  be  completed  by 
electronic  means,  the  European  services  e-card  shall  direct  the  card  holder  to  the  relevant 
national  procedures.  Providers  who  hold  a  European  services  e-  card  may  also  submit  this 
declaration through an electronic platform connected to IMI where a host Member State has 
communicated to the Commission that this possibility should apply for the posting of workers 
in  its territory.114  In  these cases,  the  declarations would  be  submitted "real  time"  by  service 
providers directly to the relevant host Member State authority, without any involvement of the 
home Member State authorities. As such, the service provider would remain fully responsible 
for making such declarations to the host Member State. While this module would be offered 
through the same online interface as used for Services e-card applications, declarations would 
not be part of the application itself. As a self-standing element, declarations would be added, 
removed or updated on an ongoing basis depending on actual postings after the card has been 
issued.  Information  on  current  posted  workers  could  be  linked  to  an  issued  card.  This  way, 
host  Member  State  authorities  would  benefit  from  more  information  concerning  the  service 
provider  (including  possible  sanctions)  compared  to  the  existing  acquis,  under  which 
exchange of information is not comprehensive in relation to different aspects of cross-border 
service  provision.  The  service  provider  would  fill  in  details  on  posted  workers  in  a  pre-
defined, multilingual form appearing in the home Member State language(s). For this purpose, 
the host Member State shall provide all the elements required in accordance with point a) of 
paragraph  1  and  paragraph  2  of  Article  9  of  Directive  2014/67/EU  as  the  basis  for  a  multi-
lingual  form  to  be  submitted  for  the  declaration  of  posted  workers  on  its  territory.  The 
Commission shall publish this form. In the host Member State, information would appear  in 
the  local  language(s)  thanks  to  such  multilingual  forms  and  in  full  compliance  with  the 
language  requirements  set  out  in  Article  9(1)(a)  of  Directive  2014/67/EU.  All  in  all,  the 
advance  information  to  be  provided  as  well  as  any  subsequent  controls  of  posted  workers 
remain unchanged by this initiative. 

The transmission of the A1 form115 however would not be part of this module, as would not 
be  any  subsequent  exchanges  of  information  in  relation  to  social  security  aspects,  these 
exchanges  between  social  security  institutions  will  take  place  through  EESSI  once 
available116.  As  a  result,  the  possibilities  of  the  issuing  social  security  institutions  to  fulfil 
their  obligations  to  verify  that  all  conditions  are  met  when  issuing  or  treating  a  request  for 
withdrawal of A1 forms, including the possibility of direct communication with the applicant, 
will not be affected. 

Finally, a third component could be included to allow for prior declarations on professional 
qualifications  of  posted  staff  in  accordance  with  Article  7  of  the  2005  Professional 
Qualifications Directive. It would also be accessible through the same online interface. 

114 Member State would always be able to notify to the Commission that they do no longer wish to apply this 
possibility. 
115 Used by a service provider for a posted employee or by a self-employed.  
116 EESSI – the Electronic Exchange of Social Security Information is a large scale IT system being developed 
by the Commission to be finalised  mid-2017, after which Member States will have two years to connect their 
national social security institutions.  

47 

 
 
                                                 
To  keep  the  procedure  simple,  declarations  would  not  be  made  available  for  professionals 
with health and safety implications. Furthermore, once a European Professional Card (EPC) is 
made  available  for  the  professional  activity  in  question,  the  module  for  declarations  is 
replaced by a link to a previously issued EPC.117 All in all, the legal regime introduced by the 
Professional Qualifications Directive would not be affected.  

5.3.3.  Policy option 2B: Action to address regulatory obstacles for providers 
in  key  business  services  wanting  to  set  up  cross-border  branches  and 
agencies 

Purpose  

This policy option would function as an add-on to policy option 2A.  

It aims to address possible cases of disproportionality regarding certain regulatory restrictions. 
Requirements governing provision of a service have to comply with relevant EU law, notably 
the  Services  Directive.  However,  unlike  Article  16  of  the  Services  Directive  governing 
temporary  cross-border  provision,  the  Services  Directive  gives  Member  States  much  wider 
discretion  in  regulating  establishing  service  providers.  This  policy  option  would  introduce 
rules on how the host Member State should apply the principle of proportionality for the set-
up  of  branches  or  agencies  when  assessing  requirements  in  the  context  of  the  European 
services e-card procedure for secondary establishment (as outlined in policy option 2A). 

However,  this  option  has  raised  concerns  of  unequal  treatment  and  risk  of  circumvention  if 
pursued, as described in points 6.6 and 7.2. 

Scope  

The scope of sectors covered under this policy option is smaller compared to options 1  and 
2A.  In  line  with  problem  driver  4,  this  policy  option  would  be  offered  to  selected  business 
services  only  (architectural,  engineering  and  accounting  services)  where  these  regulatory 
obstacles are widespread across different Member States. The reason for this is that this policy 
options aim to address regulatory obstacles that companies face when setting up a secondary 
establishment highlighted in problem driver 4 are widespread across different Member States. 

The  regulatory  obstacles  pertain  to  legal  form,  shareholding/voting  rights,  management  and 
multidisciplinary restrictions. According to their nature, these requirements are inapplicable to 
natural  persons.  This  policy  option  therefore  has  a  focus  on  legal  persons118  (companies, 
including incorporated partnerships) seeking to set up a branch or agency in another Member 
State119.  

Content 

117  Currently  the  EPC  is  only  available  for  a  selected  number  of  professions  (nurses,  pharmacists, 
physiotherapists,  mountain  guides  and  real  estate  agents).  No  other  proposals  for  introducing  the  EPC  are 
pending. 
118 As defined by Article 54 TFEU and not limited to those listed in Directive 2009/101/EC. 
119 Option 4 addresses regulatory restrictions for subsidiaries and domestic companies. 

48 

 
 
                                                 
This policy option would introduce rules as to which requirements or options can be requested 
by  the  host  Member  State  –  in  the  context  of  a  European  services  e-card  procedure  – 
regarding companies setting up a secondary establishment through branches or agencies.  

The stringent requirements pertaining to legal form, shareholding/voting rights, management 
and  multidisciplinary  restrictions  applicable  in  some  Member  States120  to  companies 
incorporated  therein  should  be  adapted121  to  the  situation  of  a  branch  or  agency.  Secondary 
establishment  (in  the  form  of  a  branch  or  agency)  must  be  available  to  companies  seeking 
cross-border  expansion.  To  ensure  this,  this  policy  option  would  introduce  the  following 
rules:  

  Restrictions  on  multidisciplinary  activities  should  apply  to  the  host  Member  State's 

territory only122;  

  Legal  form,  shareholding/voting  rights  and  management  requirements  should  apply 
only in so far as they do not entail reincorporation and/or restructuring of the company 
in  its  home  Member  State,  where  different  rules  on  incorporation  and  corporate 
structure apply. 

Adaptation of host Member States rules on incorporation and corporate structures devised for 
internal  situations  to  cross-border  situations  entails  a  difference  in  treatment  of  foreign 
branches  and  agencies.  The  host  Member  State  would  nevertheless  remain  in  charge  of 
supervising such  branches  or  agencies (via professional  chambers for instances).  It can  also 
impose requirements on the organisation of the relations between such branches/agencies and 
their parent companies established abroad as regards the above-mentioned requirements (e.g. 
securing  effective  separation  between  the  business  units  in  its  territory  and  business  units 
carrying out conflicting activities in other Member States). As in the past, the host Member 
State will also decide on the need for professional qualifications of the persons concerned. 

5.3.4.  Policy option 3: Facilitate access to insurance in a cross-border context 

Introducing minimum insurance coverage requirements, such as insured sum, duration of the 
coverage and exclusions from the cover, seem prima facie too far reaching for the problems 
described. Also discarded is the option of a mandatory single premium covering the entire EU 
territory  (similar  to  the  third  party  liability  insurance  in  the  Motor  Insurance  Directive 
2009/103/EC).  Such  solutions  risk  raising  regulatory  barriers  in  some  Member  States  and 
have not gathered ample support from service providers, while encountering strong opposition 
from the insurance industry123. 

Scope 

120 See Annex 5 of this Impact Assessment  
121 The introduction of specific (positive harmonisation) rules for cross-border agency and branch situations is 
foreseen under option 4. Such harmonisation will ease the card's procedure under option 2B but it will not render 
option 2B unnecessary since, as devised, option 4 does not introduce full harmonisation solutions. 
122 It would not be up to the host Member State but up to the service provider to decide which of the conflicting 
activities it intends to carry out (and which not) in the host Member State; It would be disproportionate for the 
host Member State to decide which of the conflicting activities could be provided. 
123 See Annex 2 of this Impact Assessment  

49 

 
 
                                                 
The  options  below  would  apply  to  business  services  and  construction  services  as  set  out  in 
policy options 1 and 2A. They would not only benefit card holders. The options below are not 
mutually exclusive but they operate as supplements to options 1 and/or 2.  

Policy option 3.1: Service provider already has insurance policy in home Member State 

Option 3.1a: An (electronic) certificate provided by the insurer would clarify main aspects of 
mandatory or voluntary coverage such as insured risks, insured sums, exclusions from cover 
and  duration  of  coverage.  In  order  to  foster  the  acceptance  of  those  certificates, 
standardisation can be considered. In addition, the certificate attesting to legal establishment 
prepared and issued under policy options 1 or 2A would contain confirmation about existence 
of  mandatory  or  voluntary  insurance  coverage  for  activities  in  the  home  Member  State,  but 
also,  in  case  of  policy  option  2A,  for  activities  on  the  territory  of  other  Member  States  of 
destination.  In  this  case,  both  information  on  coverage  and  an  insurance  certificate  would 
target  primarily  situations  where  insurance  is  mandatory  in  either  home  or  host  Member 
States, so as to ease equivalence assessment of coverage acquired across borders. 

Option 3.1b: This option would create a right for policy holders to request at any time from 
their  insurers  a  statement  about  their  claims  history  ("track  record")  over  a  given  period 
(similar  to  the  5  years  statement  under  Article  16  of  the  Motor  Insurance  Directive),  in 
relation  to  both  mandatory  or  voluntary  coverage.  This  would  enable  service  providers  to 
demonstrate their experience to a new insurer in the host Member State, particularly in cases 
of mandatory insurance coverage there. In order to foster the acceptance of those statements, 
standardisation of such  statements can be considered (e.g. describing  liabilities arising from 
provision of the services in question which were the object of a claim, as well as the number 
of claims made under the liability insurance by the insured service provider and the amount of 
claims paid out). 

Policy option 3.2: Service provider needs new insurance in the host Member State  

Option  3.2a:  Insurers  would  be  obliged  to  take  into  account  the  track  record  of  service 
providers with the previous insurer in the home Member State on a non-discriminatory basis. 
They would be required to explain how they assessed it. A service provider would hence be in 
a  better  position  to  negotiate  for  insurance  in  the  country  where  the  service  is  provided, 
particularly where such insurance is mandatory.  There is however no obligation foreseen on 
the part of the insurance company to provide insurance to the service provider. Admissibility 
of  insurance  requirements  will  remain  as  today  governed  by  the  Services  Directive.  This 
option  could  also  require  a  non-discriminatory  treatment  by  professional  organisations  of 
members (and, as the case may be, candidate members) in terms of access to collective/group 
insurance schemes. 

Option 3.2b: Improving availability of information on compulsory insurance, e.g. through the 
existing  Points  of  Single  Contact  (PSC)  under  the  Services  Directive  so  that  they  provide 
information on rules regarding compulsory insurance in the host Member States, could also be 
the focus of this initiative.  

50 

 
 
However,  the  obligation  to  provide  such  information  is  already  in  place,  in  general  terms, 
under  the  Services  Directive;  new  legislation  in  that  regard  could  undermine  the  impact  of 
other  information  obligations  of  Member  States  in  PSC  under  the  Services  Directive.  This 
option  (3.2b)  is  therefore  discarded,  in  favour  of  other  non-legislative  initiatives  fostering 
better implementation of the Services Directive in relation to setting-up PSC. 

5.3.5.  Policy  option  4:  Harmonisation  of  requirements  for  key  business 

services 

Purpose  

As highlighted by problem driver 4, selected business services (architectural, engineering and 
accounting services) face particular regulatory obstacles, widespread across different Member 
States.  These  regulatory  obstacles  pertain  to  legal  form,  shareholding/voting  rights, 
management and multidisciplinary restrictions. 

Policy  option  2B  proposes  to  address  the  problem  in  a  cross-border  perspective,  for 
companies seeking to set up a branch or agency in a Member State different from that where 
they initially incorporated and established. 

However,  regulatory  disparities  at  the  moment  of  incorporation  and  primary  establishment 
should  also  be  addressed.  Under  an  harmonisation  instrument,  more  than  a  third  of  the 
Member  States  would  be  obliged  to  amend  one  or  more  regulations  on  legal  form, 
shareholding/voting  rights  requirements,  management  restrictions  and  multidisciplinary 
activities  for  domestic  service  providers  as  well  as  foreign  service  providers  setting  up  a 
subsidiary (a separate legal entity to be incorporated) in their territory124.  

The purpose of this option would thus be to have  more domestic reforms whether a service 
provider goes cross-border or not, or whether the service provider applies for the Card under 
policy options 1 and 2A or not.   

Scope  

The scope of sectors covered under this policy option is the same as under policy option 2B. 
In  line  with  problem  driver  4,  it  would  target  selected  business  services  only  (architectural, 
engineering and accounting services) where the regulatory obstacles pertaining to legal form, 
shareholding/voting  rights,  management  and  multidisciplinary  restrictions  are  widespread 
across different Member States. According to the nature of the restrictions, this options would 
also  be  limited  to  service  providers  which  are  legal  persons  including  incorporated 
partnerships). 

This option also covers domestic service providers (in contrast with options 1 to 3). 

Harmonisation  

124  Branches  and  agencies  would  benefit  indirectly:  given  the  reduced  regulatory  disparity,  adaptation  of  host 
Member State rules to such cross-border situations would be made easier for administrations and result in less 
restrictive solutions for service providers. 

51 

 
 
                                                 
Rules  on  legal,  shareholding/voting  and  management  structures  and  multidisciplinary 
activities could be the subject-matter of partial harmonisation of laws of all Member States in 
order  to  reduce  regulatory  divergence.  Amongst  others  the  following  elements  of 
harmonisation were considered: 

  Private  and  public  limited  liability  corporate  forms  listed  under  the  First  Company 
Directive  (2009/101/EC)  would  be  declared  admissible  in  all  Member  States  for  the 
provision of the services listed above, without prejudice to other legal forms remaining 
admissible under national law;  

  Shareholding/voting  and  management  structure  rules,  imposing  professional  control, 
for  the  provision  of  the  services  listed  above  would  be  made  less  stringent,  by  only 
allowing for a mere majority stake to be in professional hands (a maximum of 51%) 
or,  alternatively,  for  a  majority  of  the  members  of  the  management  board  and 
supervisory body to be a professional. Member States with less restrictive regulations 
would however not be forced to change them; 

  Multidisciplinary restrictions would be reduced by declaring incompatibilities between 

architectural and engineering services and construction services inadmissible. 

However,  since  this  option  would  not  introduce  full  harmonisation,  which  risks  raising 
regulatory  barriers  in  certain  Member  States,  a  certain  level  of  regulatory  disparity  would 
persist125.  

These rules would also apply to companies holding a reserved title, in countries where such 
rules  on  reservation  of  specific  company  titles  exist126,  with  the  possible  exception  of 
allowing for requirements regarding multidisciplinary restrictions to continue being governed 
by the Services Directive only. 

It was also considered whether requirements imposed on foreign companies owning a stake in 
subsidiaries should be limited to checking corporate purpose for the sector in question. In this 
regard,  a  more  restrictive  regime  may  be  allowed  regarding  subsidiaries  wishing  to  acquire 
the right to bear a reserved title, given their reduced impact on access to the market in those 
cases  (where  the  alternative  exists  to  provide  the  same  services  without  bearing  a  reserved 
title). 

5.4. Combinations of policy options ("packages") 

The different policy options described in section 5.3 can be combined into different packages 
in order to meet the different policy objectives. The following packages will be assessed: 

Package 1 

Option 1 
x 

Option 2A 

Option 2B 

Option 3 
x (3.1a) 

Option 4 

125 Which the card procedures under option 2, particularly option 2B, are designed to overcome through mutual 
recognition and proportionality assessment.  
126 See Annex 5 of this Impact Assessment  

52 

 
 
 
 
 
 
 
 
                                                 
Package 2 

Package 3 

Package 4 

x 

x 

x 

x (3.1a-b and 
3.2a) 
x(3.1a-b and 
3.2a) 
x(3.1a-b and 
3.2a) 

x 

x 

x 

These  combinations  of  options  were  chosen  to  explore  complementarity  of  options  and 
achieve largest effect in terms of meeting the objectives of this initiative. 

Package 1 (including policy options 1 and 3.1a.) would allow the service provider to obtain a 
certificate  regarding  legal  establishment  in  the  home  Member  State  as  well  as  confirmation 
about existing insurance coverage for activities also in the home Member State.  

Package 2 (including policy options 2A and 3) would allow the service provider to make use 
of an EU-level procedure to actually gain access to the market of another Member State with 
more  legal  certainty  and  less  administrative  burden.  It  is  important  to  note  that  as  regards 
formalities for the posting of workers this option would not force Member States to change 
their  national  procedures.  Where  Member  States  have  set  up  procedures  that  allow  for  the 
declaration relating to the posting of workers pursuant to Article 9 of Directive 2014/67/EU to 
be completed by electronic means, the European services e-card shall direct the card holder to 
the  relevant  national  procedures.  Providers  who  hold  a  European  services  e-  card  may  also 
submit this declaration through an electronic platform connected to IMI where a host Member 
State has communicated to the Commission that this possibility should apply for the posting 
of workers in its territory. In addition, it would address obstacles related to insurance in cross-
border situations.  

Package  3  (including  policy  options  2A,  3  and  4)  would  in  addition  to  package  2  reduce 
regulatory disparity in a number of key business services through harmonisation of a limited 
number of regulatory obstacles for foreign and domestic service providers.   

Finally, package 4 (including policy options 2A, 2B, 3 and 4) would in addition to package 3 
introduce  specific  solutions  to  address  regulatory  disparities  in  the  case  of  secondary 
establishment  (branches  and  agencies),  exempting  foreign  service  providers  from  certain 
requirements while allowing the host Member State to introduce alternative safeguards.  

The impact of these four packages will be described in section 6.  

6.  Analysis of impacts 

6.1. Baseline scenario: No EU policy change 

The impacts of this policy option have been described in section 2.3.  

53 

 
 
 
 
 
 
 
 
 
6.2. General considerations on the packages to be assessed 

Before  assessing  each  of  the  packages  separately,  this  section  highlights  some  general 
considerations that are relevant across the different packages. 

Stakeholder opinions and concerns 

The  Commission  has  consulted  extensively  with  stakeholders  in  preparation  of  this  impact 
assessment.  These  exchanges  have  helped  identifying  the  problem  drivers  and  views  of 
stakeholders on possible ways forward.  

Regarding  business  services,  most  stakeholders  are  supportive  of  actions  to  reduce 
administrative  and  regulatory  requirements.  At  the  same  time,  discussions  with  a  limited 
number  of  stakeholders  in  business  services  showed  certain  concerns  that  actions  to  reduce 
regulatory obstacles could undermine the quality of services in these sectors.  

Regarding  construction  services,  some  stakeholders  are  supportive  of  actions  to  reduce 
administrative requirements. Nevertheless, a number of construction sector stakeholders (EU 
associations and trade unions) have highlighted strong concerns at a very early stage that the 
initiative  would  lead  to  reopening  the  Enforcement  Directive  on  Posting  of  Workers, 
increased risks of fraud, undermined controls of health and safety and a disruption of labour 
market  controls.127  On  the  issue  of  fraud,  a  particular  concern  raised  was  that  the  Services 
Card would make it possible for companies to establish themselves in another Member State 
without  engaging  in  any  activity  (a  so-called  “letter-box”  company)  in  order  to  circumvent 
rules. At the same time, a large group of Member States have highlighted that in their view 
the construction sector should be included in the Services Card initiative.128   

On the issue of insurance, most insurers or insurers' associations indicated that any measures 
taken  on  professional  indemnity  insurance  should  not  affect  the  contractual  freedom  of 
insurers. 

These stakeholder concerns have been considered as described in table 3 below. 

Stakeholder concerns 
Unwanted changes to rules of 
posting of workers (including 
the  Posting  of  Workers 
Directive) 

Table 3 – Stakeholder concerns 

How taken into account? 
None  of  the  outlined  policy  options  change  in  any  way  the 
existing rules on secondment of staff. The possible technical 
facilities linked to secondment of staff under option 2A only 
simplify  formalities  for  companies  related  to  posting  of 
workers  and  increases  transparency,  in  full  respect  of  the 
existing  rules.  This  does  not  change  host  Member  States' 
controls  on  adequate  employment  conditions  on  its  territory 
nor does it exempt companies from existing responsibilities. 

127  The  European  Construction  Industry  Federation  (FIEC)  and  the  European  Federation  of  Building  and 
Woodworkers have expressed strong concerns over the European services e-card, including in two letters sent to 
the Commission (9 June 2016 and 21 November 2016).   
128 For example in a joint letter by ten Member States of 22 November 2016.  

54 

 
 
                                                 
The European services e-card 
will increase the risk of fraud 
by foreign companies 

Option  2A  does  not  force  them  to  change  the  national 
implementation of Art. 9 of the 2014 Enforcement Directive. 
Where  national  electronic  procedures  for  the  submission  of 
the  prior  declaration  of  workers  are  in  place,  IMI  would 
direct the card holder to them. Option 2A gives in addition an 
option  to  Member  States  to  allow  providers  who  hold  a 
European  services  e-card  to  submit  a  declaration  relating  to 
posted workers through the electronic platform connected to 
IMI, also in view of the fact that  such electronic procedures 
do not exist in all Member States,  
The  European  services  e-card  procedure  that  grants  the 
service  provider  access  to  the  foreign  market  (option  2A) 
involves  both  home  and  host  Member  States  up  front.  The 
home  Member  State  will  not  be  in  charge  of  controlling 
requirements  to  be  respected  in  the  host  Member  State. 
Safeguards,  such  as  suspension  and  revocation  of  issued 
cards, would also be put in place. 

Additional  information  has  been  included  in  the  card  to 
further build trust towards authorities and consumers (such as 
a  track  record  on  sanctions  of  the  service  provider  and 
information on insurance coverage).  

Quality  of  services  will  be 
lowered 

Risk of letter-box companies  Only  service  providers  that  are  legally  established  in  a 
Member  State  will  be  able  to  receive  a  Services  Card.  This 
requires  the  actual  pursuit  of  an  economic  activity  at  the 
place  of  establishment  of  the  provider.129  A  mere  letter  box 
does not constitute an establishment and will therefore not be 
able to receive the Services Card.  
Policy options addressing regulatory barriers (2B and 4) only 
(partially) address a number of stringent access requirements. 
Nevertheless,  sufficient  safeguards  remain  in  place  and  host 
Member  States  can  block  entry  if  justified.  In  addition,  all 
host Member Sates' rules on operational activities (e.g. codes 
of  conduct)  are  not  affected  and  all  ex-post  controls  by  the 
host Member States' authorities remain in place.   
These  will  not  be  changed  by  any  of  the  policy  options 
neither  directly  or  indirectly.  Ex-post  controls  and  (on-site) 
inspections by the host Member State will remain as they are 
today. For example, the initiative will not replace inspection 
of  building  sites  or  work  permits.  The  e-card  will  not  allow 
for checking of health standards.  
The initiative does not introduce an obligation on insurers to 
contract 
it  harmonise  national 
requirements on professional indemnity insurance.  

Standards 
for  health  and 
safety  at  work  will  be 
lowered.  Labour  market 
controls will be disrupted 

Contractual 
insurers  

insurance  nor  does 

freedom 

of 

Costs for Member States' authorities 

129 See recital 37 of the Services Directive 2006/123/EC 

55 

 
 
                                                 
The  European  Services  Card  procedure  will  require  certain  additional  efforts  from  Member 
States' authorities. These are described in detail in annex 8. Member States' authorities are at 
this  stage  unable  to  give  reliable  estimates  of  potential  costs  to  set  up  and  operate  as 
coordinating authorities in the European Services Card procedure.  

In  general,  the  set-up  and  operating  costs  for  both  home  and  host  Member  States  are 
nevertheless expected to be limited given the following reasons: 

  The system of information exchange in the context of the Services Card would rely on 
the  existing  Internal  Market  Information  (IMI)  system.  This  system  is  developed, 
managed and funded by the Commission already for years;  

  Member States already have the experience of a similar procedure (also using the IMI 
system)  with  the  European  Professional  Card.  About  5,000  national  authorities  are 
already registered with IMI since 2011; 

  The workflow would be highly standardised and automatic translation facilities will be 

offered; 

  The  European  Services  Card  would  also  present  certain  benefits  to  Member  States' 
authorities.  Firstly,  it  would  facilitate  the  workload  of  the  competent  authorities  in 
both the host and the home Member State by replacing conventional paperwork with 
an electronic workflow. Secondly, formalities will be streamlined under one electronic 
application instead of several parallel workflows that exist today. 

More specifically regarding set-up costs, an analysis has been carried out of other EU systems 
which have certain (to some extent) similarities with the Services Card (EPC130, RAPEX131, 
SOLVIT132). However, for none of these cases data from Member States is available allowing 
for  a  reliable  estimate  of  the  costs  that  were  incurred  by  the  Member  States  to  set  up  these 
systems.  

Nevertheless,  an  analysis  done  by  the  Estonian  Ministry  of  Economic  Affairs  confirms  that 
the set-up costs of the Services Card would remain (very) limited.133 They assessed that given 
the availability of the IMI system, the set-up costs would mostly involve setting up a system 
of cooperation domestically between different competent authorities in the Member State. On 
the  one  hand,  this  requires  staff  time  to  prepare/draft  agreements  of  cooperation  between 
owners  of  different  national  databases.  In  addition,  external  services  would  be  procured  to 
program  the  necessary  IT  services  (including  query  services  from  different  databases). 
Overall, these set-up costs are assessed as limited (less than 25,000 EUR).  

Regarding operational  costs of the European Services  Card, a detailed assessment is  carried 
out in annex 8. This assessment is based on the experience with the EPC. The conclusions are 
that  the  yearly  operational  costs  (EU-wide)  under  policy  options  1  and  2A  would  be  as 
outlined in table 4. The main reasons for the differences in costs between both options are that 

130 European Professional Card 
131 Rapid Alert System for non-food dangerous products 
132 See http://ec.europa.eu/solvit/ 
133 Set-up costs for other Member States might however be higher than in Estonia given that their administrations 
are less digitalised.   

56 

 
 
                                                 
(1)  there  would  be  fewer  tasks  for  authorities  under  policy  option  1  (2)  the  number  of 
applications by service providers is expected to be much higher under policy option 2A.  

Table 4 – Operating costs for Member States' authorities 

Policy option 1 

Policy option 2A 

Total cost (EU 
wide) 

195,000-455,000 EUR 

825,000-1,925,000 EUR 

Source: Commission analysis (see annex 8) 

Policy options 2B would only introduce certain rules as to which requirements or options can 
be  requested  by  the  host  Member  State  –  in  the  context  of  a  European  services  e-card 
procedure  –  regarding  companies  setting  up  a  secondary  establishment  through  branches  or 
agencies. This will not fundamentally change the operating costs of the procedure as defined 
for  option  2A  (in  the  case  of  secondary  establishment).  Also  options  3  and  4  would  not 
generate additional operating costs for Member States' authorities compared to option 2A. 

In  addition,  a  second  benchmark/reference  regarding  operating  costs  was  established  on  the 
basis of the costs for national authorities under the SOLVIT system. Although there would be 
important  differences  between  the  European  services  e-card  and  the  SOLVIT  system,  the 
analysis  showed  similar  costs  for  Member  States'  authorities  as  under  the  EPC  analysis 
(around 2 million EUR, EU-wide). 

Voluntary nature of the card – impact on Member States 

The  European  Services  e-card  procedure  is  an  EU-level  procedure.  It  aims  to  simplify 
formalities and compliance with requirements imposed on providers establishing secondarily 
or  providing  temporary  services  across  borders.  The  European  services  e-card  would  be  a 
procedure that service providers can use on a voluntary basis. This approach (a voluntary tool 
for service providers) is also used under other EU level procedures that exist and have proven 
successful, such as the European Professional Card.   

The  expectation  is  that,  in  Member  States  where  national  procedures  are  currently 
burdensome  and  devised  for  domestic  situations  only  (which  is  the  case  in  a  majority  of 
Member States), service providers will prefer using the European services e-card procedure. 
However,  given  the  often  intense  regulatory  disparity  across  Member  States,  some  Member 
States  (a  minority)  currently  have  in  place  already  simple  procedures  (or  no  formal  control 
procedures at all) for cross-border providers. In these (less common) cases, service providers 
might prefer using the existing national procedure. This is also the reason why the European 
services e-card must be voluntary, in order not to raise barriers in these (less frequent) cases. 

Two  "parallel"  processes  (European  services  e-card  and  national  procedures)  will  therefore 
exist but the impact will remain limited for Member States. In addition, the European services 
e-card  will  also  introduce  positive  effects  for  Member  States.  It  will  reduce  the  burden  of 
implementation by Member States given that the procedural workflow is pre-set, translation 
facilities will be offered and electronic capabilities are provided at EU-level. Furthermore, it 

57 

 
 
 
renders adaptation of national (disparate) procedures to cross-border situations unnecessary: a 
new, parallel  procedure, is  available to  address this  adaptation need  (currently addressed by 
Member States mostly through case-by-case decisions).  

As to the notification obligations under Art. 9 of the Enforcement Directive, where Member 
States have put in place national electronic procedures the European services e-card will link 
to  those.  Member  States  would  also  be  offered  the  opportunity  to  make  use  of  a  platform 
connected  to  IMI  to  allow  for  the  electronic  submission  of  prior  declarations  for  workers 
posted in their territory. It would be up to the Member States to judge costs and benefits in 
this regard.  

Possible differentiated treatment of domestic vs. foreign companies 

The  European  services  e-card  does  not  introduce  unequal  treatment  of  companies  coming 
from Member State A to provide services in Member State B in relation to companies active 
domestically  in  Member  State  B  only.  All  companies,  those  from  Member  State  A  and 
Member State B, are equally subject to incorporation and primary establishment requirements 
under their respective national legislations, and the European services e-card has no impact on 
these procedures. 

Companies  applying  for  a  card  have  already  been  subjected  to,  and  complied  with, 
incorporation and primary establishment requirements under national legislation of their home 
Member State. The European services e-card procedure aims at simplifying compliance with 
requirements  for  secondary  establishment  and  temporary  cross-border  provision  to  which  a 
company  active  only  domestically  is  not  subject.  At  the  same  time,  option  2B  presents 
specific  questions  of  possible  differentiated  treatment  of  foreign  service  providers  over 
domestic ones. This will be further discussed in section 6.6.  

The  supporting  harmonisation  option  (option  4)  does  impact  incorporation  and  primary 
establishment requirements. But it does so equally throughout all Member States, so again no 
unequal  treatment  of  companies  from  Member  State  A  in  relation  to  companies  in  Member 
State B derives from this option. 

Similarities and differences with the European Professional Card (EPC) 

The  European  services  e-card  (policy  options  1  and  2A)  draws  certain  inspiration  from  the 
system  of  the  European  Professional  Card.  There  are  several  similarities  between  both 
systems,  in  particular  as  regards  policy  option  2A.  At  the  same  time,  there  are  also  some 
important differences. 

The main similarities between both systems are: 

  They both introduce a voluntary EU-level procedure allowing to complete formalities 

in an electronic way;  

  The home country authorities are the single contact point for applicants assisting them 
with  the  application  and  checking  that  it  is  correct  and  complete.  They  also 
communicate with the authorities in the host Member State; 

58 

 
 
  Both introduce a workflow with clearly defined tasks and deadlines for home and host 
Member  States'  authorities  to  process  applications,  including  a  system  of  tacit 
approval;  

  Both  systems  are  built  on  cooperation  between  Member  States  through  the  Internal 
Market  Information  (IMI)  system  which  offers  a  secured  and  multilingual 
communication channel. 

There are nevertheless some important differences between the two systems such as: 

  The  EPC  facilitates  the  recognition  of  professional  qualifications  for  selected 
professionals  (natural  persons)  only,  as  workers  or  self-employed.  The  European 
Services  e-card  on  the  other  hand  would  be  available  for  both  natural  persons  (but 
only  to  self-employed)  and  legal  persons  (companies,  including  incorporated 
partnerships)  in  a  broader  range  of  services  sectors  (business  services  and 
construction); 

  Under the European services e-card, competent authorities would also be required to 
use  previously  data  previously  made  available  by  the  service  provider  as  well  as 
information already available in the administrations ("once-only").  

Overall, the European services e-card is based on the same main simplification principles as 
under  the  EPC.  Nevertheless,  it  aims  for  a  larger  administrative  simplification  effect  by 
covering a larger range of services sectors, legal persons in addition to natural persons as well 
as a broader simplification of several formalities (in particular under policy option 2A).  

Impacts assessed 

The  following  sections  will  provide  an  overview  of  the  different  impacts  of  the  policy 
packages. None of the policy options would have any considerable impact on the environment 
or on fundamental rights, which are therefore not assessed. 

Where  possible,  quantitative  estimations  will  be  provided  of  the  impacts  of  reducing 
administrative  burden  and/or  regulatory  obstacles.  Nevertheless,  there  are  many  different 
factors which influence the levels of cross-border trade and investment in services (see section 
2.2).  In  view  of  this,  the  impacts  of  the  different  packages  are  complicated  to  assess.  The 
quantifications provided should therefore be considered as indications to understand better the 
differences in impact between the packages.  

6.3. Package 1: Policy options 1 and 3.1a 

Impact on the policy objectives 

Policy objective 1 (make it easier and less costly for companies to provide services  in 
other Member States) 

Firstly, policy option 1 would offer the service provider, service recipients and authorities a 
trustworthy  source  of  information  confirming  legal  establishment  in  its  home  Member 
State. The card can be used in the context of host Member States' controls and formalities 

59 

 
 
that fall under the scope of the Services Directive. This can simplify the completion of these 
formalities.  Nevertheless,  administrative  simplification  for  the  service  provider  would 
remain limited given that: 

  The  European  services  e-card  under  policy  option  1  would  not  allow  the  service 
provider  access  to  the  host  Member  State.  It  would  not  simplify  procedures  in  the 
host Member State. A host Member State would remain free to control compliance 
with  domestic  requirements  applicable  to  activities  on  its  territory  through  its 
current procedures; 

  The  host  Member  State  would  have  to  accept  the  certificate  as  proof  of 
establishment.  This  would  nevertheless  reduce  only  marginally  costs  related  to 
translation  and  supporting  documents  to  be  provided  in  the  host  Member  State. 
Hence, most problems of administrative complexity highlighted in problem driver 1 
(no  clear  workflow,  deadlines,  procedures  that  are  not  electronic,  etc.)  and  related 
administrative costs would not be resolved. 

Secondly, under this package policy option 3.1a would only provide proof that the service 
provider has an insurance coverage for activities in its home Member State (not in the host 
Member State). This would only generate limited effects.    

Overall,  this  package  would  make  it  easier  for  service  providers  to  go  cross-border. 
However, the impact on this policy objective would remain limited given that policy option 
1  only  leads  to  a  minor  reduction  of  administrative  complexity  and  option  3.1a  only 
clarifies insurance coverage in the home Member State. As a consequence, it is not likely 
that many service providers would be interested in such a card.  

Policy  objective  2  (Inject  more  confidence  in  the  market  towards  foreign  service 
providers by increasing transparency and available information) 

Firstly, the certificate under policy option 1 would attest to legal establishment in a home  
Member State and include information about the good repute of the provider. This can be 
used  throughout  the  EU  and  can  increase  trust  with  service  recipients.  Nevertheless,  the 
certificate only proves compliance with requirements in the home Member State. Meaning, 
it  does  in  no  way  attest  to  compliance  with  rules  of  the  host  Member  State.  This  is  an 
important limitation regarding the value of the certificate for consumers in the host Member 
State.    

Secondly, policy option 3.1a would add confirmation about existence of insurance coverage 
for activities in the home Member State (not in the host Member State). Again, this would 
have little effect on building trust and increasing transparency in the host Member State. 

Overall,  this  package  would  only  to  a  limited  extent  meet  the  objectives  of  providing 
additional information and transparency regarding (foreign) service providers.  

Policy  objective  3  (Enable  increased  market  dynamics  and  competition  leading  to 
more choice and value added for customers)          

60 

 
 
Given the limited reduction of administrative complexity offered by this package, it is not 
expected  that  it  would  significantly  change  market  dynamics  or  competition  levels.  In 
addition,  domestic  service  providers  are  not  addressed  by  this  package  (only  cross-border 
ones). Benefits for consumers in terms of more choice and value added would also remain 
limited.  

Economic Impacts 

Impact on operating costs and administrative burden for business  

An estimation of the potential reduction of administrative burden (based on analysis and a 
number  of  interviews  with  stakeholders  –  annex  7)  shows  that  this  package  of  policy 
options would reduce administrative costs for companies going cross-border with only 5 to 
10%.134  In  particular  some  administrative  burden  related  to  translation  and  certification 
costs as well as some costs related to evidence supporting legal establishment in the home 
Member  State  will  be 
familiarisation  with 
requirements/procedures,  completing  forms  and  other  to  host  Member  States'  procedures, 
etc.) will not be fundamentally changed compared to the situation today. 

reduced.  Other  costs 

(such  as 

In  view  of  these  limited  effects,  it  is  doubtful  whether  many  service  providers  would  be 
interested to apply for the European services e-card under this package.  

As to insurers, no tangible increase of costs is expected from option 3.1a. Firstly, the 2009 
Solvency  II  Directive  already  provides  for  the  possibility  of  Member  States  to  require 
insurers  to  be  more  transparent  towards  their  clients  (through  a  certificate  of  insurance 
notably),  in  a  general  trend  of  recent  EU  legislation  to  require  the  provision  of  more 
information  to  insurance  service  recipients.  Secondly,  given  that  the  insurers  have  sold 
these insurance policies to the service provider they will have provided them also with the 
terms of the insurance contract. It would only be a limited effort for insurers to transfer the 
relevant parts of this contractual information into the insurance certificate.   

Impact on the Single Market 

The scope of this package in terms of service providers that would be allowed to apply for 
the  card  is  very  large.  Business  services  and  construction  together  represent  more  than  9 
million companies in the EU (see section 1.2). These services sectors currently show very 
low levels of cross-border trade and investment. In other words, few of these companies are 
currently active in other Member States. Policy action to remove obstacles in these sectors 
could therefore have a large potential to increase single market integration.  

Regarding  administrative  obstacles,  this  package  of  options  will  introduce  simplification 
effects which will however be limited. Regarding regulatory obstacles, this package will not 
change anything compared to the situation today. Hence, the impact on the single market as 
a whole of this package would be limited.  

134 Source: Commission analysis, see annex 7 

61 

 
 
                                                 
Impact on competitiveness and SMEs 

Given the (slight) decrease in administrative burden, it is expected that there will only be a 
small  increase  in  SMEs  going  cross-border.  Overall,  no  large  impact  expected  on 
competitiveness. 

Impact on consumers and households 

No  large  impact  expected.  In  addition,  the  certificate  will  only  to  a  very  limited  extent 
increase  trust  and  transparency  for  consumers.  It  might  also  raise  questions  on  its  actual 
effects  (e.g.,  does  this  certificate  allow  the  service  provider  access  to  the  market  of  the 
consumer in the host Member State).   

Macroeconomic impact 

Negligible for the same reasons as described above.     

Impact on Member States 

This  package  would  entail  certain  additional  administrative  costs  for  Member  States' 
authorities, which would however remain limited.  

Regarding  policy  option  1,  set-up  costs  would  remain  limited  as  described  in  section  6.2.  
The majority of operating costs would be borne by the home Member States' authorities. An 
estimation of these costs is provided in annex 8. It estimates that the average administrative 
costs per application would be 110 EUR for the home Member State and 20 EUR for the 
host Member State. Depending on the total number of yearly applications (estimated for this 
option between 1,500 and 3,500) this would represent total EU-wide costs of 195,000 EUR 
to 455,000 EUR on an annual basis (or about 7,000 to 16,000 EUR on average per Member 
State). 135  

Policy option 3.1a will not fundamentally change the administrative costs for home or host 
Member States' authorities.  

Impact on the Commission 

This package would have a minor impact on the EU budget. Costs of policy option 1 would 
mostly  concern  technical  work  to  be  carried  out  to  modify  the  IMI  system  in  order  to 
introduce the necessary functionalities/procedures in relation to the certificate. These costs 
would  stay  (significantly)  below  5  million  EUR.  Policy  option  3.1a  would  have  no 
additional impact.      

Social Impacts 

135 Source: Commission analysis, see annex 7 

62 

 
 
                                                 
None.  This  package  will  not  include  any  changes  on  rules  or  procedures  related  to 
minimum conditions of employment or social security.  

6.4. Package 2: Policy options 2A and 3 

Impact on the policy objectives 

Policy objective 1 (make it easier and less costly for companies to provide services in 
other Member States) 

Policy option 2A would simplify a broader range of administrative formalities compared to 
policy option 1:  

 

 

 

 

 

 

It introduces a fully electronic procedure with a structured workflow including clear 
and short deadlines; 
It provides clarity to service providers as the European services e-card allows them 
market access in the host Member State; 
It streamlines several formalities on a simple IT platform at EU-level (in contrast to 
the national and sometimes regional Points of Single Contact). Instead of contacting 
several  authorities  in  the  host  Member  State  to  complete  these  procedures  the 
service provider would be able to complete them in a  more streamlined way. This 
includes  procedures  related  to  secondment  of  staff  which  are  currently  spread  out 
across different authorities in the host Member State;  
It  reduces  significantly  the  need  for  supporting  documents  (and  related  costs  for 
translation and certification) and overall administrative burden; 
It  puts  into  practice  the  once-only  principle  (Member  States  should  use  all 
information/evidence  already  at  their  disposal  and  service  providers  should  not  be 
asked to submit the same information twice);  
It  also  allows  for  positive  spill-over  effects  on  other  registration  formalities  in  the 
host  Member  given  that  the  authorities  in  the  host  Member  State  would  have  to 
accept the information contained in the card in the context of these procedures. 

This option would therefore reduce significantly the administrative burden faced by service 
providers today when going cross-border. It would offer an easier procedure at EU-level as 
an alternative to the often complex national authorisation procedures which are widespread, 
in particular for cases of secondary establishment.   

In addition, policy option 2A will also increase legal certainty in particular for temporary 
cross-border  providers  for  which  requirements  are  often  unclear.  This  increased  legal 
certainty  outweighs  potential  risks  that  policy  option  2A  (in  the  case  of  temporary  cross-
border provision) would lead to an increase of barriers compared to the situation today due 
to the fact that host Member States will be explicitly allowed to block access to the market. 
In addition, the European services e-card would in any case be a voluntary tool for service 
providers. Member States would not be allowed to make it compulsory. This mitigates any 
risks that in exceptional cases the situation would become less market friendly compared to 

63 

 
 
today.    

Sub-options 3.1a, 3.1b and 3.2a of policy option 3 would apply under this package. Access 
to  professional  indemnity  insurance  is  not  a  minor  issue/cost  for  service  providers.  The 
professional  indemnity  insurance  market  is  a  growing  market  currently  worth  8.2  billion 
EUR  in  11  MS  and  one  third  country  and  expected  to  grow  towards  8.9  billion  EUR.136 
Option  3.1a  would  in  this  package  allow  service  providers  to  demonstrate  whether  they 
have  an  insurance  coverage  for  activities  in  other  Member  States.  This  would  increase 
transparency for service providers which would reduce their operational costs when  going 
cross-border and offer more incentives to "take the first step". Options 3.1b and 3.2a would 
primarily aim at making it easier and less costly for service providers to obtain insurance in 
a host Member State. 

Overall, this package would make it easier for service providers to go cross-border (policy 
objective 1). Its impact would be larger than package 1 given that it addresses a larger range 
of administrative obstacles to cross-border activities. 

Policy  objective  2  (Inject  more  confidence  in  the  market  towards  foreign  service 
providers by increasing transparency and available information) 

Firstly, policy option 2A would also offer a certificate attesting legal establishment in the 
home  Member  State  including  the  same  information  as  in  policy  option  1.  In  addition, 
under policy option 2A compliance with the requirements of that host Member State would 
also  be  attested  through  the  European  services  e-card  procedure.  Its  effects  on  increasing 
transparency and information for customers regarding the service provider would therefore 
be much larger compared to package 1.  

policy 

increase 
Secondly, 
transparency/information  regarding  insurance  coverage  of  a  service  provider  for  activities 
in the host Member State.  

3.1a  would 

package 

option 

under 

also 

this 

Overall,  this  package  would  meet  the  objectives  of  providing  additional  information  and 
transparency  regarding  foreign  service  providers.  It  would  also  allay  concerns/doubts  on 
whether a foreign service provider is allowed to operate abroad. Its positive effects would 
be stronger compared to package 1. 

Policy  objective  3  (Enable  increased  market  dynamics  and  competition  leading  to 
more choice and value added for customers)          

Given  the  broader  reduction  of  administrative  complexity,  this  package  could  increase 
market dynamics137 and competition levels. More service providers are expected to use the 
card  under  this  package.  This  could  increase  choice  and  value  added  for  consumers. 
Nevertheless,  domestic  service  providers  are  not  addressed  by  this  package  (only  cross-
border ones).  

136 AT, BE, FR, DE, IE, IT, NL, PL, ES, SE, UK and Switzerland as a third country  
137 See for example European Commission, "Business Dynamics and Red Tape Barriers", 2014 

64 

 
 
                                                 
Economic Impacts 

Impact on operating costs and administrative burden for business 

An estimation of the potential reduction of administrative burden (based on analysis and a 
number  of  interviews  with  stakeholders  –  annex  7)  shows  that  this  package  of  policy 
options  would  reduce  administrative  costs  for  companies  going  cross-border  with  50  to 
75%.138  Costs  related  to  a  large  range  of  administrative  obstacles  (translation  and 
certification,  costs related to evidence supporting legal establishment in the home Member 
State,  familiarisation  with  requirements/procedures,  completing  forms  and  other  host 
Member States' procedures, etc.) will be significantly reduced. In addition, it also allows for 
positive spill-over effects on other registration formalities in the host Member given that the 
authorities  in  the  host  Member  State  would  have  to  use  the  information  contained  in  the 
card in the context of these procedures. 

As a result, the number of service providers making use of the instrument would therefore 
be expected to be higher compared to package 1.  

As  to  insurers,  no  tangible  increase  in  costs  is  expected.  Options  3.1b  and  3.2a  already 
reflect  a  widespread  practice  amongst  insurers  in  cross-border  situations  (according  to 
InsuranceEurope)  to  provide  their  clients  with  a  report  on  compensation  claims  and  take 
into  account  claims  history  statements  while  negotiating  coverage  and  premiums.  These 
elements will therefore not generate significant additional costs for insurers. 

Impact on the Single Market 

The scope of this package in terms of service providers that would be allowed to apply for 
the  card  is  the  same  as  under  package  1.  Business  services  and  construction  together 
represent more than 9 million companies in the EU (see section 1.2). These services sectors 
currently show very low levels of cross-border trade and investment. In other words, few of 
these  companies  are  currently  active  in  other  Member  States.  Policy  action  to  remove 
obstacles  in  these  sectors  could  therefore  have  a  large  potential  to  increase  single  market 
integration.  

Similarly  to  package  1,  this  package  will  not  address  underlying  regulatory  obstacles 
compared to the situation today. Regarding administrative obstacles, this package of options 
will introduce significant simplification effects. Hence, the impact on the single market as a 
whole of this package would be larger than package 1.   

Impact on competitiveness and SMEs 

As  described  above,  this  package  would  make  it  easier  for  service  providers  to  go  cross-
border  and  expand  their  customer  base  to  other  Member  States.  The  administrative 
simplification effects of this package would in particular benefit SMEs which are currently 
most  affected  by  heavy  administrative  burden  and  the  related  costs  (more  than  large 

138 Source: Commission analysis, see annex 7 

65 

 
 
                                                 
companies), dissuading them from going cross-border. 

Consumers and households 

Given the important administrative simplification effects introduced by this package, more 
companies could be expected to go cross-border. Increased levels of companies providing 
services cross-border can increase choice for consumers as  well as lower prices thanks to 
increased competition by foreign companies.   

In addition, this package could have a significant effect on increasing trust with consumers 
regarding (foreign) service providers. In contrast to package 1, consumers get reassurance 
that  a  service  provider  is  controlled  and  acts  in  compliance  with  domestic  requirements 
applicable in the host Member State.  

Macroeconomic impact 

Given  the  broader  reduction  of  administrative  complexity,  this  package  could  increase 
market  dynamics  and  competition  levels.  This  could  increase  choice  and  value  added  for 
consumers.  Nevertheless,  since  this  package  does  not  present  any  action  to  remove  or 
reduce  regulatory  obstacles  (only  administrative  ones)  its  overall  impact  risks  to  remain 
limited.  

Impact on Member States 

This  package  would  entail  certain  additional  administrative  costs  for  Member  States' 
authorities, which would be higher than under package 1 but still remain limited (see annex 
8 for detailed calculations).  

Set-up costs would remain limited as described in section 6.2. Costs for authorities would 
be  different  for  temporary  cross-border  provision  (section  5.3.2.1)  and  secondary 
establishment (section 5.3.2.2): 

  Regarding  temporary  cross-border  provision,  the  average  administrative  costs  per 
application would be 130 EUR for the home Member State and 40 EUR for the host 
Member State; 

  Regarding secondary establishment, the average administrative costs per application 
would be 130 EUR for the home Member State and 250 EUR for the host Member 
State.  

Depending  on  the  total  number  of  yearly  applications  across  the  EU  (estimated  for  this 
option  between  1,500  and  3,500  for  temporary  cross-border  provision  and  the  same  for 
secondary establishment) this would represent total costs for Member States' authorities of 
825,000-1,925,000 EUR on an annual basis (or about 30,000 to 70,000 EUR on average per 
Member State). 139 

139 Source: Commission analysis, see annex 7 

66 

 
 
                                                 
Policy  option  3  and  its  different  sub-options  will  not  fundamentally  change  the 
administrative costs for home or host Member States' authorities.  

Impact on the Commission 

This  package  would  have  an  impact  on  the  EU  budget.  Costs  would  mostly  concern 
technical  work  to  be  carried  out  to  modify  the  IMI  system  in  order  to  introduce  the 
necessary  functionalities/procedures.  The  costs  would  be  slightly  higher  compared  to 
package  1  given  the  broader  scope  of  formalities  covered.  They  are  however  expected  to 
stay below 5 million EUR.    

Social Impacts 

This  package  would  simplify  certain  procedural  aspects  related  to  secondment  of  staff 
(including  posting  formalities)  in  order  to  reduce  administrative  burden.  The  underlying 
rules  on  secondment  of  staff  and  related  obligations  for  companies  would  nevertheless 
remain unchanged. It will also not  force Member States to change their current  processes 
for implementing Art. 9 of the 2014 Enforcement Directive.  

6.5. Package 3: Policy options 2A, 3 and 4 

Impact on the policy objectives 

Policy objective 1 (make it easier and less costly for companies to provide services in 
other Member States) 

The impact of policy options 2A and 3 have been described in packages 1 and 2. 

Policy option 4 would harmonise certain regulatory requirements in key business services 
(accounting, architectural and engineering services). This will not (directly) result in further 
administrative simplification effects for service providers going cross-border. Nevertheless, 
a  more  harmonised  regulatory  framework  would  provide  more  opportunities  for  service 
providers to go abroad and reduce regulatory burden for them across the EU.    

Policy  objective  2  (Inject  more  confidence  in  the  market  towards  foreign  service 
providers by increasing transparency and available information) 

The impact of policy options 2A and 3 have been described in packages 1 and 2. 

Policy  option  4  would  harmonise  certain  regulatory  requirements.  This  will  not  result  in 
further  information/transparency  for  consumers.  The  impact  of  this  package  on  policy 
objective 2 would therefore be largely the same as under package 2 (i.e., it would increase 
information and transparency for consumers).  

Policy  objective  3  (Enable  increased  market  dynamics  and  competition  leading  to 
more choice and value added for customers)          

In  addition  to  a  broad  administrative  simplification  (offered  by  policy  options  2A  and  3), 

67 

 
 
this package would also address a number of regulatory barriers in large business services 
sectors through partial harmonisation. Furthermore, this regulatory simplification would not 
be limited to companies going cross-border only but also cover domestic companies. This is 
a  major  difference  compared  to  packages  1  and  2  which  only  cover  cross-border  service 
providers.  This  package  is  therefore  expected  to  generate  a  more  significant  increase  in 
market  dynamics  and  competition  levels  (more  than  under  package  2).  It  would  increase 
choice and value added for consumers (in terms of lower prices).   

Economic Impacts 

Impact on operating costs and administrative burden for business 

The  impact  on  operating  costs  and  administrative  burden  for  service  providers  would  be 
similar as under package 2. 

Impact on the Single Market 

In  addition  to  the  effects  described  in  package  2,  this  package  would  include  targeted 
regulatory  simplification  for  a  selected  number  of  business  services  sectors  (architects, 
engineers  and  accountants  –  covering  about  20%  of  the  business  services  sector).  These 
services sectors currently show very low levels of cross-border trade and investment. Policy 
action to remove obstacles in these sectors could therefore have a large potential to increase 
single market integration.  

the  restrictiveness  of  national  rules  on 

legal  form, 
This  package  will  reduce 
shareholding/voting  and  management  structures  in  those  Member  States  where  they  are 
most stringent today. This would allow reducing regulatory disparity across Member States 
for  the  business  services  covered.  It  would  also  reduce  regulatory  burden  for  domestic 
providers of these business services, as well as those companies choosing to incorporate a 
local corporation (as a subsidiary). 

Policy  action  addressing  these  barriers  can  lead  to  increased  cross-border  activities140.  In 
addition,  almost  half  of  the  respondents  to  the  public  consultation  consider  that  these 
regulatory barriers in business services should be addressed across the board (meaning, for 
both cross-border and domestic service providers).  

Impact on competitiveness and SMEs 

As  described  above,  this  package  would  reduce  administrative  as  well  as  regulatory 
obstacles  for  both  domestic  and  cross-border  service  providers.  It  would  in  particular 
benefit  SMEs  which  are  currently  most  affected  by  heavy  administrative  and  regulatory 
burden.  This  package  would  (in  contrast  to  packages  1  and  2)  also  provide  additional 
opportunities  for  domestic  providers  to  enter  the  market,  benefiting  from  less  restrictive 
conditions  to  set  up  a  primary  establishment.  Overall,  it  is  expected  to  increase  market 

140  See  for  example  Swedish  Board of  Trade, "Possible effects  of  the Services  Directive",  2012  and  European 
Commission, "Business services – Assessment of Barriers and their Economic Impact", 2015 

68 

 
 
                                                 
dynamics  (more  entry  of  new  firms)  for  both  cross-border  and  domestic  providers.  These 
increased  market 
on 
been 
competitiveness/productivity  growth.  On  the  other  hand,  the  proposed  changes  will  not 
overcome barriers such as languages, customer relations or VAT.  

positively 

dynamics 

impact 

shown 

have 

to 

Consumers and households 

Increased levels of companies being able to provide services cross-border and an increased 
number of domestic entry rates of new companies have been shown to increase choice for 
consumers as well as lower prices thanks to increased competition. 

Although  this  option  reduces  regulatory  requirements  in  a  number  of  business  services, 
sufficient  safeguards  will  still  remain  in  place  (e.g.  shareholding  requirements  are  only 
reduced  to  51%  or  requirements  for  members  of  a  supervisory  or  management  board  to 
have  a  simple  majority).  In  addition,  regulatory  requirements  will  be  the  same  for  all 
service providers (domestic and foreign).  

Macroeconomic impact 

Annex  9  includes  an  indicative  estimate  of  the  potential  macro-economic  effects  of  this 
package  in  the  three  business  services  where  regulatory  simplification  is  pursued.  It  is 
important to stress that this estimation takes into account other improvements to the overall 
regulatory  framework  which  are  not  the  object  of  the  harmonisation  exercise.  The  main 
conclusions are the following:141 

  Entry  rates  in  the  different  sectors  could  increase  by  up  to  3%  for  engineering 

services, 5% for architectural services and 6% for accounting services; 

  Prices  for  consumers  (proxied  by  profit  rates)  could  decrease  by  up  to  8%  for 
architectural services, 9% for engineering services and 11% for accounting services; 
  Allocative  efficiency  levels  could  increase  by  2  percentage  points  for  engineering 
services,  3 percentage points  for  architectural  services  and 4  percentage  points  for 
accounting services.   

Impact on Member States 

The harmonisation action does  not  require any (direct)  costs of Member States.  Costs  are 
therefore similar as under package 2.  

Impact on the Commission 

The harmonisation action does not require any (direct) costs of the Commission. Costs are 
therefore similar as under package 2.  

Social Impacts 

141 Source: Commission analysis, see annex 9 

69 

 
 
                                                 
None, similarly to package 2.  

6.6. Package 4: Policy options 2A, 2B, 3 and 4. 

Impact on the policy objectives 

Policy objective 1 (make it easier and less costly for companies to provide services in 
other Member States) 

The impact of policy options 2A, 3 and 4 have been described in packages 1, 2 and 3. 

Policy  option  2B  would  target  foreign  service  providers  only  and  enhance  their 
opportunities  to  set  up  a  secondary  establishment  (branch  or  agency)  in  other  Member 
States. Certain (domestic) rules would not apply to them.  

Policy  objective  2  (Inject  more  confidence  in  the  market  towards  foreign  service 
providers by increasing transparency and available information) 

The impact of policy options 2A, 3 and 4 have been described in packages 1, 2 and 3. 

Policy  option  2B  will  not  result  in  further  information/transparency  for  consumers.  The 
downside  of  this  option  is  that  there  might  be  concerns  (also  among  consumers)  about  a 
divergent level-playing field between domestic and foreign service providers treating in the 
same  Member  State  foreign  branches  and  agencies  differently  as  compared  to  domestic 
players.   

Policy  objective  3  (Enable  increased  market  dynamics  and  competition  leading  to 
more choice and value added for customers)          

In  addition  to  a  broad  administrative  simplification  (offered  by  policy  options  2A  and  3) 
and partial harmonisation of a number of regulatory barriers (policy option 4), policy option 
2B  would  present  additional  solutions  to  a  number  of  stringent  regulatory  barriers  (legal 
form, shareholding/voting and management structures) specifically in the case of secondary 
establishment for a number of selected business services. 

This  is  relevant  given  that  policy  option  4  would  not  in  all  cases  provide  solutions  for 
specific  problems  faced  by  cross-border  service  providers  in  relation  to  the  regulatory 
barriers  outlined  in  problem  driver  4.  For  example,  harmonisation  of  shareholding 
requirements to a maximum of 51% would in most cases not impact the ability of service 
providers  coming  from  Member  States  where  the  profession  concerned  is  unregulated  to 
enter a Member State making use of the possibility to keep 51% shareholding requirements. 
Such providers would in all likelihood have a variety of shareholders comprised of less or 
no professionals and thus still be barred entry. Policy option 2B would present a possibility 
for these services providers to set up a secondary establishment, without changing e.g. the 
ownership structure in the home Member State. 

Therefore, in addition to the effects described in package 3, this package would be expected 
to generate an additional amount of companies setting up a secondary establishment in the 

70 

 
 
business services covered. 

At the same time, option 2B would oblige Member States not to apply certain national rules 
to  incoming  branches  and  agencies.  This  could  be  perceived  as  giving  an  (unfair) 
differential treatment to foreign companies over domestic ones.    

Economic Impacts 

Impact on operating costs and administrative burden for business 

The  impact  on  operating  costs  and  administrative  burden  would  be  similar  as  under 
packages 2 and 3.  

Impact on the Single Market 

In  addition  to  the  effects  described  in  package  3,  this  package  would  provide  additional 
opportunities  for  companies to  set  up  a  secondary  establishment  for  a  selected  number  of 
business services sectors (architects, engineers and accountants – covering about 20% of the 
business services sector). Nevertheless, option 2B would oblige Member States to disapply 
certain  national  rules  for  incoming  branches  and  agencies.  This  could  be  perceived  as 
giving an (unfair) differential treatment to foreign companies over domestic ones.    

Impact on competitiveness and SMEs 

As described above, this package would reduce further regulatory obstacles for companies 
that  want  to  set  up  a  secondary  establishment. It  would in  particular  benefit  SMEs  which 
are  currently  most  affected  by  heavy  administrative  and  regulatory  burden.  In  general, 
companies expanding cross-border have been empirically shown to generate positive effects 
on  competitiveness  as  they  show  on  average  higher  turnover  and  employment  growth  as 
well as stronger innovation activity.142 The competition effects are expected to be slightly 
higher compared to package 3. 

Consumers and households 

Increased levels of companies being able to provide services cross-border and an increased 
number of domestic entry rates of new companies have been shown to increase choice for 
consumers as well as lower prices thanks to increased competition. The downside of policy 
option 2B would be that it would introduce a differentiated treatment for foreign providers 
(branches and agencies). This could result in reduced consumer confidence.  

Macroeconomic impact 

Empirical  research  has  established  a  link  between  increased  cross-border  activities  by 
companies as well as new entry of domestic firms and a better allocation of resources  and 

142 See for example European Competitiveness Report, "Drivers of SME internationalisation", 2014 

71 

 
 
                                                 
overall  productivity  growth.  The  effects  are  expected  to  be  slightly  higher  compared  to 
package 3. 

Impact on Member States 

The administrative costs for Member States' authorities would be similar as under packages 
2 and 3. 

Impact on the Commission 

This  package  would  have  an  impact  on  the  EU  budget.  Costs  would  mostly  concern 
technical  work  to  be  carried  out  to  modify  the  IMI  system  in  order  to  introduce  the 
necessary functionalities/procedures. These costs would be similar compared to packages 2 
and 3. 

Social Impacts 

None, similarly to package 2. 

7.  Comparison of packages 

7.1. Comparison in terms of effectiveness, efficiency and coherence 

On the basis of the above assessment of impacts, the effectiveness of the different packages to 
address  the three  policy  objectives outlined  in section  4.1 is  assessed as  follows.  Regarding 
policy objective 1 (make it easier and less costly for companies to provide services in other 
Member States), package 1 would generate certain simplification effects which are however 
more  limited  compared  to  the  other  packages.  Packages  3  and  4  would  have  even  stronger 
effects  than  package  2  given  that  they  also  address  regulatory  obstacles  (in  addition  to 
administrative  simplification).  At  the  same  time,  there  are  concerns  that  package  4  (policy 
option 2B) would lead to an (unjustified) differentiated treatment of foreign companies over 
domestic ones. 

Regarding  policy  objective  2  (inject  more  confidence  in  the  market  towards  foreign  service 
providers by increasing transparency and available information), packages 2 to 4 offer more 
information  and  transparency  to  consumers  than  package  1.  Nevertheless,  consumers  might 
have concerns about the differentiated treatment of service providers in package 4. 

Regarding policy objective 3 (enable increased market dynamics and competition leading to 
more  choice  and  value  added  for  customers),  the  packages  have  an  increasing  degree  of 
impact  (from  package  1  with  a  limited  impact  to  packages  3  and  4  with  a  strong  impact). 
Nevertheless, package 4 risks having strong opposition from stakeholders. 

Table 5 – Overview of impacts (indicative estimations) 

Potential reduction of 
administrative costs for 

Potential macro-economic impact for 
key business services 

72 

 
 
 
services providers 

Package 1 
Package 2 

5 to 10% cost reductions 
50 to 75% cost reductions  Limited 

None 

Package 3 

As package 2 

Package 4 

As package 2 

- Increased entry rates by up to 3-6% 
- Decrease in consumer prices by up to 8-
11%  
- Increased  allocative  efficiency  by  up  to 
2-4 pp 

As  package 3  plus  a  potential increase  of 
secondary establishment intensity.  

Source: Commission analysis (annexes 7 and 9) 

Regarding  efficiency,  package  1  would  entail  limited  costs  for  authorities  (but  also  limited 
benefits  in  addressing  the  policy  objectives).  Package  2  would  generate  more  costs  for 
authorities,  but  would  also  generate  more  benefits  in  addressing  the  policy  objectives. 
Packages 3 and 4 would have similar costs as package 2. 

Table 6 - Comparison of packages against effectiveness and efficiency criteria 

Policy objectives 

EFFECTIVENESS 

Policy 
objective 
1 

Policy objective 
2 

Policy objective 
3 

Policy option  

Baseline scenario 

Package 1 (policy options 1 and 3) 

Package 2 (policy options 2A and 3) 

Package 3  (policy options 2A, 3  and 
4) 
Package  4  (policy options  2A,  2B,  3 
and 4) 

0 

+ 

++ 

++ 

++ 

0 

 + 

+++ 

+++ 

+ 

0 

≈ 

++ 

+++ 

++ 

EFFICIEN
CY 

 (cost-
effectivenes
s) 

0 

+ 

++ 

++ 

++ 

Magnitude  of  impact  as  compared  with  the  baseline  scenario  (the  baseline  is  indicated  as  0):  +++  decisive 
positive  effect  ++  strongly  positive;  +  positive;  –  –  strongly  negative;  –  negative;  ≈  marginal/neutral;  ? 
uncertain; n.a. not applicable  

Table 7 - Comparison of the impact of policy options on stakeholders 

Stakeholder 

Business 
services 

Construction 
services 

Clients 

Public 
authorities 

Policy option  

Baseline scenario 

Package 1 (policy options 1 
and 3) 
Package 2 (policy options 2A 
and 3) 

0 

+/≈ 

++ 

0 

+/≈ 

++ 

0 

≈ 

+ 

0 

≈ 

+ 

73 

 
 
 
 
 
 
 
 
 
 
 
Package 3 (policy options 2A, 
3 and 4) 
Package 4 (policy options 2A, 
2B, 3 and 4) 

+++ 

++ 

7.2. Choice of preferred package 

++ 

++ 

++ 

+ 

+ 

+ 

Package  2  is  the  preferred  package.  It  introduces  a  European  services  e-card  for  temporary 
provision  of  services  and  secondary  establishment  (sections  5.3.2.1  and  5.3.2.2).  It  also 
includes the described technical facilities on secondment of staff (section 5.3.2.3) as regards 
professional qualifications and – upon Member State's request – for the electronic submission 
of prior declarations for the posting of workers through a platform connected to IMI.  

This option shall provide a one-stop shop for providers in the sectors of business services and 
construction;  reduce  costs  for  companies  while  increasing  legal  certainty  about  the 
requirements  applicable  to  them  thus  enhancing  cross-border  trade  and  investment.  It  shall 
also  enhance  administrative  cooperation  between  Member  States  authorities  within  a  clear 
procedural  framework  with  a  view  to  facilitating  mutual  recognition  of  requirements  met 
already in the home Member State where applicable. Over time, it is expected that Member 
States  will  gain  a  better  knowledge  of  their  respective  regulatory  frameworks  in  the  sectors 
covered by the European services e-card that should lead to enhanced mutual trust. 

Where  Member  States  have  set  up  procedures  that  allow  for  the  declaration  relating  to  the 
posting  of  workers  pursuant  to  Article  9  of  Directive  2014/67/EU  to  be  completed  by 
electronic  means,  the  European  services  e-card  shall  direct  the  card  holder  to  the  relevant 
national  procedures.  Providers  who  hold  a  European  services  e-  card  may  also  submit  this 
declaration through an electronic platform connected to IMI where a host Member State has 
communicated to the Commission that this possibility should apply for the posting of workers 
in  its  territory.  The  one-stop  shop  provided  by  the  card  shall  not  include  any  functionality 
allowing  service  providers  to  request  the  A1  form  (Article  19(2)  of  Regulation  (EC) 
987/2009) through the online interface used for the European services e-card application. The 
latter is not pursued given that debates are ongoing in parallel to  this initiative on improved 
social  security  coordination  between  Member  States.  Therefore,  the  "one-stop-shop"  idea 
behind the e-card will not encompass any possibilities to apply for A1 forms. 

As  regards  other  packages  considered,  package  1  is  therefore  not  considered  as  the  best 
option. Its scope is much more reduced than that of package 2 and thus its potential to bring 
about  administrative  simplification  and  to  enhance  administrative  cooperation  and  legal 
certainty for providers. 

Regarding  package  4,  there  are  certain  concerns  that  policy  option  2B  would  lead  to  an 
(unjustified)  differentiated  treatment  of  foreign  companies  over  domestic  ones.  This  option 
might  also  give  rise  to  perceptions  of  introducing  a  solution  driven  by  a  country  of  origin 
approach  under  which  foreign  service  providers  are  subject  to  their  home  member  States 
legislation only. Equally this option might spur attempts by service providers to circumvent 
the legislation of more restrictive Member States by establishing minimal operations in other 
less  restrictive  Member  States  to  then  gain  easier  access  to  more  restrictive  Member  States 

74 

 
 
where  they  intend  to  set  up  their  main  centre  of  operations.  These  risks  could  lead  to  a 
difficult  debate  about  favourable  treatment  of  foreign  service  providers  to  the  detriment  of 
domestic  ones.  As  a  result,  stakeholders  might  not  welcome  this  option  despite  its  aim  of 
trying to ensure proportionality in conditions for foreign branches and agencies. Package 4 is 
therefore not considered the best option either. 

Finally, package  3 addresses a number of regulatory obstacles in  business services (through 
option 4). Nevertheless, it would not make regulatory divergence disappear entirely nor other 
regulatory  restrictions  affecting  the  regulation  of  the  three  professions  that  it  covers 
(architects, accountants and engineers). As a result, a combination of continued enforcement 
against  disproportionate  obstacles  and  the  forthcoming  specific  recommendations  on  reform 
needs which shall invite Member States to reassess the full regulation applicable to the three 
professions as part of the same package appears at present as adequate. The need to address 
regulatory obstacles in the context of this initiative could be reviewed at a later stage. 

7.3. Choice of legal instrument 

Further details on the choice of the instruments are set out in Annex 10. In accordance with 
the Treaties, the initiative would be comprised of a legislative package including a Directive 
and a Regulation. This will allow to best achieve the outlined policy objectives.  

The Directive would set out the legal and operational framework of the European services e-
card, regulating inter alia the conditions of eligibility, the competences of the home and the 
host  Member  States,  the  validity  of  the  European  services  e-card  and  the  conditions  for 
revoking  or  suspending  it.  Article  53  of  the  Treaty  only  allows  for  Directives  in  matters 
dealing with access to markets in a cross-border dimension. 

A Regulation, for its part, could be introduced under Article 114 TFEU to include provisions 
clarifying  the  functioning  and  the  workflow  between  an  applying  service  provider  and  the 
authorities  in  charge.  The  Regulation  would  create  a  European  services  e-card  which  as  an 
EU-level  procedure  does  not  require  transposition  but  rather  implementation  (such  as 
designating  authorities,  deciding  on  the  principle  and  the  amount  of  fees).  This  Regulation 
would  not  alter  any  rules  on  access  to  foreign  markets.  It  would  also  not  introduce  new 
obligations  for  Member  States  as  to  the  implementation  of  Art.  9  of  the  2014  Enforcement 
Directive. A Regulation is more suitable than a Directive for these procedural matters since 
the  functioning  of  an  EU-level  procedure  would  be  compromised  by  differing  transposition 
rules of a procedure laid out in a Directive.  

7.4. Subsidiarity and proportionality of the options 

The overall objective of the preferred package is to ensure a better functioning of the single 
market  in  business  services  and  construction  which  is  not  limited  to  the  territory  of  one 
Member State. EU intervention is the only way to establish the envisaged EU level procedure 
to  issue  a  European  services  e-card  (option  2A).  The  insurance  issues  highlighted  under 
policy option 3 have a cross-border dimension and are closely related to the establishment of a 
certificate under option 2A. The package proposed is proportionate to achieve its objectives. It 

75 

 
 
entails only a  limited increase in  terms of  administrative burden for Member  States and the 
Commission. This is largely driven by the reliance on the existing IMI structure.  

8.  Monitoring and evaluation 

The Commission would closely follow how the proposal is experienced by service providers 
and  will  encourage  Member  States  to  promote  it.  The  Commission  would  also  pursue  its 
regular dialogue with Member States' representatives in the existing expert groups as well as 
with relevant stakeholders in particular to see how to facilitate the transition to the new rules. 
Workshops  and  conferences  will  be  organised  within  the  framework  of  the  Single  Market 
Forum in order to discuss all preparatory steps for the introduction of the proposed initiative 
but also for its promotion once available.   

In  the  mid-to-long-term  and  the  Commission  would  focus  on  monitoring  the  effects  of  the 
initiative. Annex 11 presents the main indicators that will be used to monitor progress towards 
meeting  the  objectives  pursued  by  this  initiative,  as  well  as  the  possible  sources  of 
information.  Information  could  be  gathered  from  IMI,  Member  States,  service  providers, 
chambers  of  commerce  or  professionals  and  customers  of  services.  Where  needed,  the 
Commission could send questionnaires to Member States or stakeholders or organise specific 
surveys.  Member  States  would  also  be  invited  to  evaluate  the  functioning  of  the  initiative, 
involving  also  where  applicable  national  social  partners  (in  particular  as  regards  the 
construction  sector).  An  evaluation  report  could  be  issued    3  years  after  the  end  of  the 
transposition period.  

That said, specific aspects which have not been covered by the  preferred package should be 
revised earlier: 

  The  potential  of  facilities  offered  by  the  Commission  in  the  context  of  Art.  9  of  the 
2014  Enforcement  Directive  should  be  reviewed  as  part  of  the  upcoming  review  of 
that  Directive  scheduled  for  2019.  For  this  review,  the  experience  of  those  Member 
States  that  may  have  opted  for  making  use  of  the  possibility  to  use  the  electronic 
platform connected to IMI for the electronic submission of these declarations shall be 
taken into account. 

  The  need  for  addressing  regulatory  obstacles  (option  4)  should  be  evaluated  against 
the follow-up Member State will give to the reform guidance to be published as part of 
the  Services  Package  (January  2017),  to  the  country  specific  recommendation  in  the 
context of the European Semester and to ongoing infringement procedures.  

76 

 
 
Annexes 

Annex 1: Procedural information (pg. 78) 

Annex 2: Stakeholder consultation (pg. 81) 

Annex 3: Who is affected and how? (pg. 99) 

Annex 4: Evaluation (pg. 101) 

Annex 5: Problem definition – additional evidence (pg. 133) 

Annex 6: Consistency with other EU policies (pg. 165) 

Annex 7: Administrative burden reductions under the different policy options (pg. 167) 

Annex 8: Administrative costs for authorities (pg. 197) 

Annex 9: Impact of addressing regulatory obstacles in business services (pg. 212) 

Annex 10: Choice of legal instrument (pg. 219) 

Annex 11: Monitoring and evaluation (pg. 220) 

77 

 
 
 
 
Annex 1: Procedural information 

1. Lead DG 

DG Internal Market, Industry, Entrepreneurship and SMEs (DG GROW) 

2. Agenda planning and Work Programme References 

The Agenda Planning Reference is 2016/GROW/041. 

The initiative gathers 3 different actions announced in the Single Market Strategy adopted in 
October 2015: 

  Legislative initiative introducing a services passport; 
  Legislative  action  to  address  regulatory  barriers  for  key  business  services  and,  if 

appropriate, organisational requirements in construction companies; 
If necessary, action on insurance requirements. 

 

3. Inter-Service Steering Group (ISSG) 

An Inter-Service Steering Group was set up in 2016. In total, 5 meetings were organised in 
preparation of this impact assessment: on 3 and 25 February, 22 June, 19 July, 12 September. 

The  following  services  were  consulted:  EAC,  CNECT,  COMP,  ECFIN,  EMPL,  FISMA, 
JUST,  TAXUD,  TRADE.  The  feedback  received  from  these  services  has  been  taken  into 
account in the impact assessment.  

4. Consultation of the Regulatory Scrutiny Board 

The  Impact  Assessment  Report  was  examined  by  the  Regulatory  Scrutiny  Board  on  12 
October 2016. A negative opinion of the RSB was issued on 14 October 2016. The following 
recommendations were put forward. They were addressed in a revised version of the Impact 
Assessment submitted to the Board on 25 October 2016. The recommendations put forward 
by  the  RSB  in  its  final  positive  opinion  of  8  November  have  been  addressed  in  this  final 
version. 

RSB recommendations of 14 October 2016 
The report should elaborate on the underlying 
reasons  for  the  poor  performance  of  the 
Services  Directive,  including  the  functioning 
of  the  point  of  single  contacts  (PSC)  and  in 
particular  the  internal  market  information 
system (IMI). 
The report needs to establish the prominence 
of  administrative  obstacles  and  regulatory 
problems  over  other  important  barriers  (e.g., 
taxes, languages, regulated professions...). 

The  rationale  for  focusing  on  business  and 
construction services and even more narrowly 
on  three  specific  professions  in  the  case  of 

How taken into account? 
Further  detailed  information  on  the  reasons 
for  malfunctioning  of  the  Services  Directive 
(in particular the PSCs and the use of the IMI 
system) have been provided in sections 2.2.1  
and 2.2.2 (problem drivers 1 and 2).  

regarding 

information 

Additional 
the 
importance  of  the  barriers  addressed  by  the 
initiative (also in the context of other existing 
barriers)  have  been  provided 
throughout 
section 2.2 (problem drivers).   
The reasons for focusing on business services 
and  construction  have  been  explained  in  a 
new  section  on  scope  (1.2).  In  addition,  the 

78 

 
 
 
 
 
option 4 needs to be better argued. 

the 

into 

report 

the  options  – 

The  report  should  provide  a  better  overview 
individually  or 
of  how 
combined  –  would  provide  a  comprehensive 
response to the identified problems. Integrate 
individual  and  possibly  inter-linked  policy 
options 
coherent  packages  while 
clarifying the related trade-offs. 
Where  the  Services  Card  takes  inspiration 
from the existing European Professional Card 
(EPC), 
the 
similarities  and  differences  (e.g.,  successful 
the 
functioning  of 
procedural  deadlines  and  of  automatic 
translation). 
The  report  should  better  distinguish  between 
the various stakeholder groups to clarify their 
views  on  the  policy  options.  The  report 
should better highlight the negative responses 
received  from  some  stakeholder  groups  and 
the  criticisms  and 
to 
provide  responses 
arguments provided by these groups. 

should  explain 

feasibility  of 

IMI, 

The report should also explain how to avoid a 
possible  uneven  playing 
field  between 
companies  using  the  Services  Card  and 
companies in the host Member State. 

The  report  needs  to  show  that  the  voluntary 
nature  of  the  Services  Card  does  not  add 
additional complexity and costs for the public 
administrations  if  they  have  to  manage  two 
parallel authorisation processes. 
On  this  basis,  the  report  should  aim  at 
identifying a preferred option or, if this is not 
possible, 
or 
discarding 
ineffective  options  and  narrowing  down  the 
range of policy choices to be considered. 
The  report  should  analyse  the  likely  costs  to 
Member  States  of  setting  up  and  of 
maintaining the new system.  

unrealistic 

at 

As  for  businesses,  the  report  should  clarify 
the magnitude of expected cost reductions. 

RSB recommendations of 8 November 2016 

more  narrow  focus  in  options  that  address 
regulatory barriers has been justified in more 
detail in section 2.2.4 (problem driver 4).  
Different  packages  combining  options  have 
been designed in section 5.4 (combination of 
policy options). The impact of these packages 
is assessed in section 6 (analysis of impacts).  

The  EPC  and  its  relevance  for  this  initiative 
have been described in detail in sections 2.2.1 
and 2.2.2 (problem drivers 1 and 2). 

These  and  other  stakeholder  concerns  have 
(general 
in 
been  outlined 
considerations  on 
to  be 
assessed).  This  section  also  explains  how 
stakeholder  concerns  have  been  taken  into 
account.   

section  6.2 
the  packages 

A  preferred  option/package  is  highlighted  in 
section 7.2 (choice of preferred package). 

in 

6.2 

More details on the possible set-up costs and 
operating  costs  for  Member  States  are 
(general 
provided 
section 
to  be 
considerations  on 
assessed) and annex 8. 
The expected costs reductions for companies 
have  been  estimated  and  are  highlighted  in 
section 6 (estimation of impacts) and annex 7.  
How taken into account? 

the  packages 

79 

 
 
 
 
Clarify  the  link  between  the  revised  specific 
objectives (in particular objective 2) 
and the problem drivers 
It  would  be  helpful  for  the  report  to  assess 
more  systematically  relevant  strengths  and 
weaknesses of the EPC experience, clarifying 
similarities  and  differences  with  the  services 
card initiative.  

Clarify  how  the  combination  of  this  and  future 
initiatives, such as the European Digital Gateway, 
might help to simplify administrative procedures 
rather 
administrative 
create  more 
complexity 

than 

Narrative  has  been  modified  to  better  explain 
this link 

The  EPC  and  its  relevance  for  this  initiative 
have  been  described  in  even  further  detail  in 
sections 2.2.1 and 2.2.2 

Narrative  on  the  combination  of  this  initiative 
with  the  European  Digital  Gateway  has  been 
added. 

when 

implementing 

To  avoid  administrative  complexity,  where 
Member  States  have  put  in  place  electronic 
procedures  for  the  submission  of  the  prior 
in  their 
declaration  for  posting  of  workers 
Directive 
territory 
2014/67/EU,  the  European  services  e-card  will 
provide  a  link  to  those  procedures.  Providers 
who  hold  a  European  services  e-  card  may 
through  an 
this  declaration 
also  submit 
electronic platform connected to IMI where a 
host  Member  State  has  communicated  to  the 
Commission that this possibility should apply 
for the posting of workers in its territory.   
In 
the 
proportionality  of  policy  option  4  was 
reassessed.  It  appears  adequate  at  this  stage  to 
tackle  the  existing  disproportionate  regulatory 
in  this  field  through  targeted 
requirements 
enforcement  action  and 
specific 
recommendations  on  reform  needs  for  Member 
States that address the regulatory framework for 
the  professions  in  question  in  a  comprehensive 
way.  

recommendation 

through 

light 

this 

of 

reducing  administrative  and 

Be more explicit on the limited expected impact 
of 
regulatory 
burdens,  in  comparison  with  other  factors  that 
are limiting services trade. 

5. Studies to support the Impact Assessment 

The Impact assessment is based on existing research/analyses done by the Commission over 
the  last  years  to  assess  the  implementation  of  the  Services  Directive  and  the  functioning  of 
services markets in general.   

80 

 
 
 
 
 
 
 
Annex 2: Stakeholder consultation 

1.  Introduction 

The Commission consulted stakeholders on the proposal to introduce a European services e-
card and address regulatory barriers in the construction and business services sectors, and on 
possible action to address barriers in the insurance sector. 

These actions have been announced in the Single Market Strategy of October 2015, as part of 
an agenda to further develop the Single Market for services. 

The aim of this consultation was to seek the views of stakeholders on the effect on the ground 
of  practical  difficulties  encountered  by  service  providers  in  a  cross-border  context,  in 
particular of administrative and regulatory nature. Moreover, the consultation was a means to 
test  different policy options that  could  be pursued to  address them, including their potential 
impact. 

This  document  summarizes  the  results  gathered  through  an  online  public  consultation 
questionnaire, which was running from 3 May and 26 July 2016 for a period of 12 weeks, as 
well as position papers received over this period.  

The last section provides a summary of discussions with stakeholders over the past months, 
including with Member States in the context of the Experts Group on the implementation of 
the Services Directive  

2.  Summary of responses to the European Commission’s 2016 public consultation 

2.1. Executive summary 

179  responses  have  been  received  to  the  online  EU  Survey  questionnaire.  In  addition,  27 
position papers were provided, mostly from organisations and individual Member States.  

Overall, stakeholders of all types have contributed, mostly from the business services sectors 
(accountants, architects, engineers, tax advisors), and to a lesser extent from the construction 
and the insurance sector: service providers, organisations representing certain sectors such as 
chambers  of  professionals,  chambers  of  commerce  (some  of  them  considered  as  public 
authorities),  organisations,  Member  States,  regional  development  authorities,  or  individual 
citizens. An important amount of replies to the online questionnaire have been received from 
Germany (more than 40% of the total). Those responses are nevertheless as diverse as the rest, 
in terms of sectors, type of respondents and opinion shared.  

Respondents  were  offered  the  choice  to  respond  to  different  sections  as  that  they  wanted: 
questions  in  general;  on  business  services,  with  the  perspective  of  service  providers  or  of 
customers; on construction with also the perspective of service providers or of customers; on 
insurance, from the perspective of service providers or of insurers; and on the perspective of 
national authorities. The number of responses collected under each section varied. The total 
amount of respondents (179) therefore cannot be considered as the reference number for each 
of the questions.  

Based on this method, the following trends have been identified: 

  The  core  of  the  contributions  concerns  the  aspects  related  to  the  policy  options  of  a 
European  services  e-card  and  to  a  lesser  extent  those  on  the  experiences  of  service 

81 

 
 
 
 
 
 
 
providers.  This  is  coherent  with  the  fact  that  most  respondents  responding  to  the 
question  on  whether  they  performed  cross-border  activities  indicated  that  they  only 
provide services in their home Member State (although more than half did not reply to 
these questions). Very few have indicated being established in another Member State 
than  where  their  headquarters  is  established,  and  also  that  they  provide  temporary 
cross-border services. Rather than sharing views on how they experience provision of 
services  in  a  cross-border  context,  respondents  directed  their  attention  towards 
possible policy options to address existing barriers. In addition, they stressed that they 
would  prefer  obtaining  more  information  about  the  Commission's  intention  and 
discussing this further. This echoes the messages received by the Commission over the 
past  months  during  bilateral  meetings  with  stakeholders.  Very  few  also  called  for 
holding another consultation.  

  Apart from the general sections on services sectors and scope of the actions, and apart 
from  very  few  exceptions,  respondents  chose  to  respond  to  the  sections  which  were 
the most relevant according to their profile: the sections on business services mostly 
gathered  responses  from  service  providers  and  organisations  representing  interests; 
those  on  construction  services  from  stakeholders  active  in  the  sector;  sections  on 
insurance,  from  stakeholders  active  in  this  area;  public  authorities  to  the  section  on 
public authorities.  Very few respondents were  customers of  services (either  business 
services  or  construction)  therefore  very  few  answers  were  received  on  questions  on 
these sections. 

  Most  respondents  supported  policy  options  of  a  European  services  e-card  providing 
administrative  simplification  for service  providers wanting to engage in cross-border 
markets. In addition, a majority of respondents who shared an opinion on the matter 
indicated  that  regulatory  requirements  as  currently  existing  would  require  an 
intervention  at  EU  level  to  make  it  easier  for  service  providers  to  access  other  EU 
markets. 

  When  it  comes  to  a  breakdown  per  sectors  and  category  of  respondents,  the  main 

trends observed in the responses are as follows: 
o  A  majority  of  the  respondents  from  the  business  services  sector  (in  particular  in 
accountancy,  architectural,  engineering  and  tax  advice),  whether  being  service 
providers,  business  organisations  or  other  organisations,  expressed  support  for 
solutions taken at EU level to address administrative and regulatory barriers. 

o  Most  of  the  representatives  of  the  construction  sector  shared  a  more  reserved 
position for its sector they represented, although counting for a much smaller share 
of respondents compared to business services. 

o  Respondents from the insurance sector, although also much less numerous in total, 
showed overall support for an initiative facilitating access to insurance in a cross-
border  context,  but  a  forthcoming  initiative  should  not  put  into  question 
contractual freedom for insurers. 

2.2. Geographical origin of the respondents 

A total of 179 responses have been received to this online public consultation, coming from 
respondents  of  23  different  EU  Member  States  (see  graph  no  1  below  with  breakdown  per 
country), and one from Switzerland. 

27  position  papers  –  mainly  by  organisation  -  have  been  received  separately.  They  provide 
less  detailed  information  and  comments  statements  than  those  shared  by  the  respondents  to 
the online questionnaire. These position papers are also taken into account. 

82 

 
 
 
 
5  EU  Member  States  are  not  represented  among  the  respondents:  Hungary,  Latvia,  Malta, 
Slovakia and Slovenia. 

Graph n°1 - Number of respondents per country 

80

70

60

50

40

30

20

10

0

74 

19 

6 

1 

2 

1 

7 

2 

1 

1 

9 

1 

2 

6 

3 

5 

4 

6 

9 

8 

4 

2 

4 

2 

Save  for  Germany,  the  graph  shows  a  relatively  even  repartition  of  the  respondents  among 
most  other  EU  Member  States.  In  addition,  among  the  19  respondents  from  Belgium,  5  are 
organisations representing Belgian stakeholders, the rest being organisations based in Brussels 
but representing interests at EU-level. 

Only  a  limited  share  of  the  respondents  (13%)  indicated  that  they  have  an  establishment  in 
Member States other than the place where their main headquarters are located. The Member 
States  where  the  respondents  are  established  are:  Belgium  (for  17  of  them)  but  also  France 
(8), Germany (6), the Netherlands (5), Austria, Denmark, Finland, Ireland, Italy, Luxembourg 
Portugal, Spain and Sweden (4), or the United Kingdom (3). Very few respondents (coming 
from  service  providers)  indicated  that  they  provide  temporary  cross-border  services  in 
business services (11 respondents) or in construction services (3 respondents).  

2.3. Type of respondents and sectors concerned 

The  responses  collected  originate  from  several  categories  (see  graph  n°2):  companies 
providing services (41%), business organisations such as associations, chambers of commerce 
or  professionals,  regional  development  agencies  or  Enterprise  Europe  Network  agencies 
(32%), public authorities (15%), trade unions (6%) and individual citizens (5%). 

Out  of  the  category  of  business  organisations,  respondents  representing  sector-specific 
interests  have  been  identified:  in  business  services,  such  as  tax  advice,  craft  sector, 
architecture,  accountancy,  engineering, 
liberal  professions.  In  addition,  organisation 
representing construction services and insurance were among the respondents. 

83 

 
 
 
 
Graph n°2 - Number of respondents by category 

80
70
60
50
40
30
20
10
0

57 

Business
organisation

9 

Citizens

74 

Company
providing
services

1 
Institution, such
as national or
regional
parliament

27 

11 

Public authority

Trade union

Companies  providing  services  can  be  broken  down  as  follows:  18  responses  were  gathered 
from  small  or  medium-sized  companies  (up  to  250  employees),  12  from  large  companies 
(more than 250 employees), 17 from micro companies (less than 10 employees) and 25 from 
self-employed professionals.  

In addition, respondents of this category were from various sectors (see graph n°3): business 
services (43), personal services (12), construction services (10), insurance (6), tourism (1) and 
sectors not covered by the Services Directive (2). 

Graph n°3 - Number of respondents by sectors (among the 74 
companies providing services) 

50
40
30
20
10
0

43 

Business services

10 

Construction
services

6 

Insurance

2 
Other sector not
covered by the
Services Directive

12 

Personal services

1 
Tourism

As to business services as such, 18 respondents indicated to offer accounting services, 14 tax 
advice  services,  6  general  consultancy  services,  3  engineering  services  and  2  architectural 
services. 

3.  Consultations topics 

3.1. General remarks  

Most  respondents  did  not  react  to  these  questions  inviting  them  to  share  their  market 
experiences. Less than 15% of respondents responded to the questions addressed to customers 
in  the  field  of  business  services,  and  only  10  respondents  addressed  to  customers  of 
construction services. On the other hand, sections concerning policy initiatives to answer the 
problems  identified,  and  the  potential  impacts  of  such  policy  initiatives,  have  generated  a 
larger share of responses.  

84 

 
 
 
 
 
3.2. Questions on services sectors in general (other than business services and 

construction) [questions 10 to 15 of the online questionnaire] 

Respondents to this section of the online questionnaire belong to mostly all categories and all 
sectors identified. 

Only 1 out of 4 respondents replied to the question on whether they carried out cross-border 
activities or not. Out of those, 73% provided services in their home Member State only. 

Respondents considered that the most important matters would be insufficient knowledge of 
the  targeted  market  (81%  of  those  who  replied),  cultural  differences  (74%),  and  also 
regulatory issues such as authorisations, registrations, insurance, but also domestic labour and 
tax law (73%).  

As  far  as  administrative  barriers  were  concerned,  a  majority  of  respondents  considered  as 
genuine  obstacle  the  need  to  contact  more  than  one  authority  in  the  host  country  (51%)  as 
well as translation requirements (47%). 

In addition, half of the respondents shared their views on the objectives of possible actions to 
address  administrative  obstacles,  and  expressed  the  following  preferences:  electronic 
procedures  to  be  provided  by  authorities  (37%),  more  support  (in  general  terms)  to  be 
provided  from  authorities  in  the  host  Member  States  (32%)  and  reduce  the  complexity  and 
length of procedures (22%). Only 3% considered that no action should be undertaken. 

On  the  impact  of  actions  tackling  administrative  barriers,  on  average  nearly  half  of  the 
respondents  expressed  their  views  and  considered  that  the  impact  would  be  positive, 
especially  for  saving  costs  of  service  providers  (70%),  increasing  cross-border  service 
provision (68%), and increasing choice for consumers (55%). 

Examples mentioned included compulsory tax registration (and different tax laws), linguistic 
issues, knowing which legislation applies to a specific activity abroad (including labour and 
social law, and as a consequence sanctions and fines), lack of insurance coverage for services 
provided abroad. Several respondents (service providers, associations and public authorities) 
stressed  that  regulatory  heterogeneity  (different  accounting  standards,  or  different  taxation 
legislation,  which  are  country-specific)  was  much  more  an  impediment  than  regulatory 
barriers limiting establishment and provision of service. 

3.2.1.  Position papers from associations  

Associations  representing  businesses  in  general  were  mostly  supportive  of  the  European 
services  e-card,  including  regulatory  aspects  of  the  initiative,  and  called  for  an  ambitious 
approach. For example, BUSINESSEUROPE presented a position paper, according to which 
it supports the European services e-card, provided it truly reduces administrative burden for 
companies, leads to regulatory simplification and offers a clearly defined scope in agreement 
with  the  stakeholders  directly  affected.  Similarly,  VNO-NCW  and  MKB-Nederland  also 
expressed  support  for  the  European  Services  e-card,  provided  that  the  Commission  takes 
action on addressing regulatory barriers as well as administrative barriers.  

On the other hand, some associations representing businesses in general were more critical of 
the  European  services  e-card  initiative,  with  the  following  arguments:  while  UEAPME 
supported the idea to reduce the administrative burdens for businesses and service recipients 
in line with the Services Directive, it also voiced concerns that it could facilitate cross-border 
frauds  and  disrupt  the  effectiveness  of  controls  undertaken  by  labour  inspectorates.  The 

85 

 
 
Confederation  of  Swedish  Enterprise  on  the  other  hand  expressed  doubts  on  whether  the 
European  services  e-card  initiative  is  an  efficient  use  of  resources,  supporting  rather  the 
development on already existing structures, such as the Points of Single Contact. In addition, 
several  trade  unions,  notably  at  European  level  and  from  Germany  and  Austria,  underlined 
that social partners should be more involved in this project and opposed any attempts that the 
European  services  e-card  could  lead  to  the  direct  or  indirect  application  of  the  country  of 
origin principle. 

3.3. Questions on business services – perspective of service providers [questions 16 to 

46 of the online questionnaire] 

Respondents to this section mostly belong to the category of service providers, from various 
types  of  business  services  -  mostly  architectural,  engineering,  accountancy  and  tax  advice. 
Some were also organisations representing these sectors. In total, respondents to this section 
therefore only accounted to  more than half of the total amount of respondents. 

3.3.1.  Internal market for business services – Current situation 

74%  of  those  responding  to  the  question  on  whether  they  performed  cross-border  activities 
indicated  that  they  only  provide  services  in  their  home  Member  State.    The  responses 
concerns service providers only since other types of respondents indicated that question was 
not  applicable  to  them.  Only  20%  indicated  that  they  provide  services  cross-border  without 
any permanent establishment in the host Member State, and 6% through a permanent presence 
in another Member State such as a branch, agency or subsidiary). 

More than half of the service providers active in the field of the business services have replied 
to the question on whether they are carrying out activities in other Member States than their 
home  Member  State.  Out  of  those,  15%  indicated  that  they  are  providing  cross-border 
services principally through a permanent establishment in the host Member State.  

In  addition,  26%  of  those  who  replied  to  the  question  whether  they  would  like  to  offer 
services in other Member States in the future, indicated that they would like to do so either 
without  a  permanent  establishment  (27%).  35%  of  the  respondents  to  the  question  prefer 
focusing on the domestic market or consider that the question is not applicable to them (39%). 

Administrative issues are considered by 61% of the respondents, active in business services, 
as being an important challenge for cross-border service provision. 

Difficulties  in  accessing  the  necessary  information  on  rules  and  procedures  applicable  in 
another Member State are considered an important administrative obstacle by more than 1 out 
of  3  respondents  who  have  replied.  That  said,  compliance  with  requirements  in  another 
Member  State  in  the  daily  administrative  practice  merit  a  proper  attention.  The  lack  of 
electronic options to complete procedures in the host Member State is seen as an obstacle by 
almost 1 out of 3 respondents, as well as the need to contact several authorities separately in 
the  host  Member  State,  identified  by  nearly  40%.  The  need  to  present  certified  copies  is  a 
possible obstacle for around 1 respondent out of 5. Translation is also an obstacle for 1 out of 
3 respondents.  

Regulatory  issues,  on  the  other  hand,  are  a  concern  for  a  more  important  number  of 
respondents (66%), with only 2% seeing these issues as not important at all. 

86 

 
 
 
44% of those who replied (service providers from business services) considered that national 
rules  which  require  service  providers  to  satisfy  with  specific  legal  forms  as  an  obstacle, 
especially  for  accounting  services  at  large,  architectural  services  and  engineering  services. 
Moreover, 36% also see these as an obstacle for the setting up of a branch or agency in the 
host Member State. 

National  rules  as  regards  shareholding  requirements  are  also  seen  as  negatively  impacting 
temporary  cross-border  service  provision  by  nearly  30%  of  those  who  replied,  but  also 
secondary establishment and setting up of a branch or agency, for 33%.  

The fact that certain management positions in the host Member State are reserved to qualified 
professionals is perceived as a difficulty by more than 26% of those who replied (respondents 
active in business services). 31% of respondents indicated that it is specifically complicating 
the setting up of a branch or agency and 11% that it even prevents the expansion of activities . 
The prohibition of the joint exercise of certain professional activities by companies in the host 
Member  State  (multidisciplinary  activities)  also  represents  a  difficulty  for  cross-border 
service provision according to 28% of respondents, with complications in setting up a branch 
of an agency for 24%  .  In  addition, these  requirements  are perceived as rendering the entry 
into  the  market  of  the  home  Member  State  more  difficult  for  more  than  26%  of  the 
respondents.  

Fewer  responses  were  collected  as  regards  compliance  with  a  national  service  standard  or 
national conformity assessment scheme. 10% indicated that it could slow down or prevent the 
expansion of providers established in other Member States.  

3.3.2.  Need for action  

Almost one third of the respondents, active in business services, consider that an EU action is 
necessary.  Similarly,  more  than  1  out  of  4  respondents  feel  that  an  EU  level intervention  is 
also needed to address regulatory barriers.  

As regards administrative barriers, as far as the objective of a possible EU action regarding 
administrative  barriers  is  concerned,  nearly  3  out  of  4  respondents  indicated  the  need  for 
offering electronic procedures, more than 60% the need for eliminating re-submissions of the 
same documents, more than 55% the closer cooperation amongst competent authorities, more 
than a third the need to enhance trust between competent authorities and to accept documents 
issued in the home Member State, one third the reduction of the complexity and the length of 
the procedures in the host Member State, nearly 1 out of 4 the need for additional support in 
the host Member State while addressing translation and certification of the translations (18%) 
requirements is also important.  

Nearly  half  of  the  respondents  shared  an  opinion  on  expected  impacts  of  reducing 
administrative  barriers.  Out  of  those,  over  one  third  indicated  that  it  could  result  in  cost 
savings for service providers that provide services in other Member States. Respondents are 
divided whether such a measure could lead to an increase of services offers in other Member 
States (no: 35%, yes: 34%), while 30% think that it will increase the choice for consumers, 
and also competitiveness of the EU business services sector (47%). 

As regards regulatory barriers, an important amount of respondents to this section, meaning 
those active in business services, put the focus on the need to address national requirements 
about legal forms to reduce obstacles to cross-border service provision. 

87 

 
 
43%  indeed  supported  the  need  to  address  national  rules  which  require  service  providers  to 
satisfy  with  specific  legal  forms;  27%,  the  requirements  that  a  certain  proportion  of  the 
shareholders need to be held by qualified professionals and restrictions on the joint exercise of 
professional  activities  by  companies;  25%,  the  requirements  that  a  certain  proportion  of 
voting  rights  need  to  be  held  by  qualified  professionals.  Only  36%  considered  that  none  of 
these requirements should be addressed. 

In  accordance  with  this,  most  respondents  (61%)  also  supported  the  need  to  take  action  to 
make sure that  the company form of a service provider according to the laws of the Member 
State of establishment becomes accepted by the Member State of secondary establishment. To 
a lesser extent (35%), they called for action on business models of service providers that offer 
multi-disciplinary services to be accepted by other Member States. 26% called for action to 
make sure that voting rights structure do not have to be changed to provide services in other 
Member States. 24% called for action to ensure that a shareholder structure should not have to 
be  changed  to  provide  services  in  other  Member  States.  Finally,  22.5%  favoured  action  to 
prevent that a management structure has to be changed to provide services in other Member 
States. 

According  to  the  respondents  (half  of  them  answering),  in  case  of  secondary  establishment 
(branches and agencies), Member States should be allowed to impose safeguards on incoming 
service providers, such as a local responsible person supervising the service provision (70%), 
reserve of professional titles (66%), or internal compliance policies (33%). Moreover, 43% of 
the respondents consider that there is a need to reduce the regulatory burden of rules on legal 
form, shareholding requirements, management positions and multidisciplinary restrictions for 
domestic  service  providers  as  well.  Only  8%  of  the  respondents  are  of  the  opinion  that  this 
should not happen through EU intervention. 

In sum, legal form requirements as well as restrictions on multidisciplinary activities are seen 
major  issues  when  expanding  business  cross-border  but  are  also  important  for  domestic 
situations.  Shareholding  requirements,  notably  voting  rights,  remain  also  important  but 
require particular safeguards for the host Member State.    

3.3.3. Impact  

A  limited  number  of  respondents  consider  that  reducing  administrative  barriers  would 
increase  costs  for  service  providers  (18%)  and  views  are  balanced  concerning  a  possible 
increase of costs for public administrations (no: 23%, yes: 21%). 

Most  respondents  who  shared  an  opinion  also  supported  views  that  the  expected  impact  of 
facilitating  compliance  with  regulatory  requirements  would  be  positive  for  service 
providers  from  other  Member  States  and  customers  of  services,  while  more  limited  for 
national administrations. 

Nearly one third of respondents thought that the initiative would increase the offer of cross-
border  services,  with  positive  impact  on  prices  and  choice  of  consumers.  One  quarter  also 
indicated  that  it  would reduce  costs  for  service providers.  Nearly  one  quarter  also indicated 
that  it  could  positively  impact  on  prices,  on  the  choice  for  consumers  or  productivity  and 
competitiveness.  No  cost  increase  for  service  providers  is  expected,  according  to  more  than 
58% of the respondents, while an increase for public administrations is considered possible by 
38%  of  them.  However,  such  a  measure  may  create  an  uneven  playing  field  in  the  markets 
concerned according to a slight majority of respondents (51%) 44% consider that it might not 
change much in practice.  

88 

 
 
3.3.4. Input from position papers 

Stakeholders  active  in  the  business  services  sector  were  mostly  supportive  of  the  European 
services e-card initiative or parts thereof in their position papers. For example, the Federation 
of European Accountants was of the position that administrative burdens should be reduced in 
the accounting services sector and therefore "the introduction of European services e-cards for 
accountancy firms who  want to  establish in  another Member  State with market access rules 
could contribute to a reduction of bureaucracy". 

The  Federation  of  European  Accountants  also  supported  addressing  certain  regulatory 
restrictions, for example removing multi-disciplinary restrictions and legal form requirements. 
Likewise,  the  Institute  of  Chartered  Accountants  in  England  and  Wales  supported  reducing 
administrative  burdens  on  service  providers  as  well  as  the  removal  of  restrictions  on  multi-
disciplinary practices. 

The Architects' Council of Europe also expressed some support for the initiative, stating that 
"an electronic procedure to facilitate communication between responsible authorities in Home 
and  Host  jurisdictions  could  be  useful,  along  with  the  use  of  multi-lingual  standardised 
forms". At the same time, the Architects' Council of Europe also raised concerns in relation to 
the  European  services  e-card,  such  as  a  risk  of  duplicating  the  European  Professional  Card 
and  the  potentially  disproportionate  cost  and  effort  required  for  businesses  to  apply  for  and 
update the European services e-card. 

3.4. Questions on business services – perspective of customers [questions 47 to 52 of 

the online questionnaire] 

Less than 15% of respondents answered questions on the perspective of customers, making it 
difficult  to  draw  a  representative  view.  15  respondents  have  claimed  to  use  accountancy 
services, 4 engineering services, 3 architectural services.  

Most  of  those  never  used  business  services  from  providers  from  other  Member  States. 
Nevertheless  those  who  did  are  generally  satisfied  with  the  existing  degree  of  competition. 
Two  thirds  considered  that  there  are  enough  players  on  the  market  and  they  have  several 
alternatives to choose from. 76% are generally satisfied with the quality and price of business 
services available. 

3.5. Questions on construction services – perspective of service providers [questions 

53 to 77 of the online questionnaire] 

Respondents to this section were service providers active in the construction services sector or 
representing  the  sector  itself  (business  organisations  or  trade  unions),  representing  around 
20% of the total amount of respondents to the online questionnaire (34 respondents). 

The  trends  identified  under  the  sections  of  the  online  questionnaire  dedicated  to  the 
construction  sector,  mostly  favourable  of  the  initiative  are  relatively  different  from  the 
positions provided by stakeholders via position papers, for most, rather critical of an initiative 
which  would  have  ambitions  of  regulatory  reforms.  FIEC  and  EFBBW  however  expressed 
reservations  to  the  idea  of  a  European  services  e-card,  subject  to  more  information  being 
made available (and more safeguards for the host Member States). A similar line is taken by 
the European Builders Confederation (EBC).   

3.5.1.  Internal market for construction services – Current situation 

89 

 
 
Two thirds of those who replied indicated on one hand that cross-border service provision is 
not  relevant  for  their  business  environment.  On  the  other  hand,  19%  are  already  providing 
cross-border services through a permanent secondary establishment. In addition, 37% showed 
an interest to provide cross-border services either through an establishment (19%), a branch 
(12%) or a subsidiary (6%), being large, small or micro companies. 

Respondents  also  identified  the  following  as  the  main  barriers  for  construction  service 
providers  to  offer  their  services  in  another  Member  State:  insufficient  knowledge  of  the 
targeted market (90%); cultural specificities (83%); regulatory issues, such as authorisations, 
registrations,  insurance,  labour  law,  tax  etc.  (76%);  lack  of  resources  (70%);  market  driven 
domestic service standards and conformity assessments schemes (71%); administrative issues, 
such as duration of procedures, low level of digitalisation, etc. (66%).  

On administrative obstacles, access to information was identified as an important issue by 
two thirds of the respondents to this section. In addition, 47% of them indicated the need to 
contact  several  authorities  as  another  important  problem.  41%  judged  the  length  and 
complexity  of  the  procedures,  and  more  than  one  third  lack  of  electronic  procedures  in  the 
host Member State. 

On the other hand, the need to present certified or authenticated documents issued in the home 
Member State in order to complete procedures to provide services in the host Member State is 
not seen as a particular obstacle, for 41% of the respondents. In addition, opinions were more 
divided on whether the need to present certified or authenticated documents issued in the host 
Member State is an obstacle or not (yes: 34%, no: 31%). 

Asked  about  their  perceptions  of  regulatory  barriers  in  the  construction  sector,  most 
respondents  who  shared  an  opinion  indicated  that  rules  in  Member  States  requiring 
construction  service  providers  to  have  a  certain  technical/professional  capacity  always 
available are seen as a serious difficulty. 

Similarly, over one third considers that it makes the setting up of an agency or a branch more 
difficult and slows accordingly down or prevents the expansion of the activities.  

Rules  in  Member  States  imposing  requirements  on  how  a  business  is  structured  (e.g.  as 
regards quality management systems) through mandatory certification procedures is perceived 
as a difficulty by 55% of the respondents, impacting the setting up of an agency or of a branch 
(43%) and slowing down or preventing the expansion of the activities (28%).   

In  the  same  vein,  rules  in  Member  States  imposing  specific  organisational  requirements 
(protective  and  preventive  measures)  on  construction  service  providers  to  fulfil  health  and 
safety  standards  is  considered  a  difficulty  for  cross-border  service  providers.  46%  of  those 
who replied indicated so, although the same proportion estimates that it has no impact on their 
service  provision.  Compliance  with  a  national  service  standard  or  national  conformity 
assessment  scheme  is  considered  a  difficulty  by  48%  of  those  who  replied,  while 
standardisation  and  certification  required  by  the  market  is  perceived  an  obstacle  by  52%  of 
them. 

3.5.2.  Need for action and potential impact of policy options 

A  majority  of  the  respondents  from  the  construction  sector  consider  that  there is  a need  for 
legislative action at EU level both to reduce administrative burden and to introduce an easier 
regulatory  framework  for  companies  wishing  to  provide  services  in  other  Member  States 
(57%).  

90 

 
 
Responses  under  this  section  tend  to  show  different  trends  than  those  identified  in  the 
previous  section  on  the  experience  and  opinion  on  the  main  challenges  to  cross-border 
markets in the construction sector. 

In case of an EU level action concerning administrative obstacles, respondents consider that 
it should address access to information (for 90% of those who replied), complexity and length 
of  the  procedures  in  the  host  Member  State  (for  71%),  introduce  e-procedures  (for  68%), 
avoid re-submission of documents (for 65%), ensure close cooperation of the home and host 
Member State competent authorities (61%), allow for acceptance of documents issued in the 
home  Member  State  (for  48%),  enhance  trust  between  competent  authorities  and  get  more 
support from authorities in other Member States (42%), certification of documents (35%) and 
address translation (19%).  

The  expected  impact  of  reducing  administrative  barriers  in  construction  services  consists  in 
cost  savings  for  cross-border  providers,  according  to  half  of  the  respondents  concerned, 
increased  choice  for  consumers  for  more  than  46%  of  them,  and  increase  of  cross  border 
offers for more than 40% of them. The majority of the respondents agree that there will be no 
cost increase for service providers (68%) or for pubic administrations (54%).  

Respondents also provided feedback on regulatory requirements which should be addressed 
to facilitate the expansion of service providers across borders, in the construction sector. More 
than  55%  of  the  respondents  indicated  that  requirements  on  technical  and  professional 
capacity conditions should be addressed. A little less than two thirds targeted organisational 
health and safety requirements, or organisational certification requirements. 

Similarly,  respondents  identified  the  following  actions  to  be  taken:  ensure  acceptance  of 
technical/professional capacity and harmonise rules in this regard (38% of those who replied), 
and  of  certified  quality  management  systems  (31%  of  them);  harmonise  rules  governing 
organisational certification (for 24%).  

In case of secondary establishment, Member States should be allowed to require from foreign 
providers  getting  established  in  their  territory  a  local  responsible  person  to  ensure: 
technical/professional  capacity  for  half  of  the  respondents;  quality  management  for  nearly 
40%  of  them;  suitable  health  and  safety  organisation  for  more  than  two  thirds.  On  the 
contrary, more than two thirds also considered that Member States should not be allowed to 
pursue  such  policy  objectives  but  rather  harmonise  rules  governing  technical/professional 
capacity requirements for a construction companies and organisational certification.  

Finally, 85% of the respondents consider that there a need to reduce the regulatory burden of 
rules for domestic service providers. In addition, only less than 4% consider that it should not 
happen through EU intervention.  

Facilitating  compliance  with  regulatory  requirements  for  service  providers  from  other 
Member States could increase competitiveness for 44% of the respondents to these questions, 
save  costs  for  cross-border  service  providers  according  to  43%  of  them,  increase  of  cross 
border offers for 42% of them, as well as more choice for 40%. 

The  majority  of  respondents  agree  that  there  will  be  no  cost  increase  for  service  providers 
(75%)  or  for  public  administrations  (58%).  50%  of  the  respondents  however  believe  that 
addressing  regulatory  requirements  could  create  an  uneven  playing  field  in  those  markets 
between providers from other Member States and national providers while 35% considers that 
not much will change in practice.  

91 

 
 
As far as the impact of harmonising regulatory requirements for all players in the market is 
concerned, respondents expect cost savings for service providers that provide services in other 
Member States for 46%, while cost should increase for service providers that provide services 
in that Member State for 39%. Views are more divided regarding a possible increase of cross-
border  services  (yes:  46%,  no:  43%),  the  increase  of  choice  for  customers  (yes:  41%,  no: 
37%),  the  increase  of  productivity  and  competitiveness  (same  proportion  of  38%  on  both 
sides)  or  the  practical  effects  of  the  measure  (yes:  27%,  no:  38%).  The  majority  of  the 
respondents agree that there will be no cost increase for service providers (70%) or for pubic 
administrations (63%). 

3.5.3.  Input from position papers 

Associations  of  construction  companies  had  however  a  negative  position  towards  the 
European  services  e-card  initiative  as  a  whole.  For  example,  the  European  Federation  of 
Building and Woodworkers and the European Construction Industry Federation sent a letter, 
in  which  the  associations  opposed  the  European  services  e-card,  stating  that  "the  proposed 
“European services e-card” would not provide any useful added value whilst at the same time 
generating additional problems, facilitating cross-border frauds and disrupt the effectiveness 
of controls undertaken by labour inspectorates".  

Similar views were expressed by the European Builders Confederation and Italian and French 
associations  of  construction  companies  (Fédération  Française  du  Bâtiment,  Associazione 
Nazionale Costruttori Edili) in their position papers. 

3.6. Questions on construction services – perspective of customers [questions 78 to 82 

of the online questionnaire] 

Almost 97% of respondents did not reply to these question. 

3.7. Questions on insurance – perspective of service providers [questions 83 to 96 of 

the online questionnaire] 

80% or sometimes even more of the respondents did not answer the questions on insurance or 
indicated that they are not applicable to them, for the reason that respondents to this section 
only  belong  to  the  insurance  sector,  being  service  providers  or  representing  interests  of 
insurance providers. Additional views were shared by stakeholders of the Insurance sector via 
position papers, which are reflected in the following paragraphs. 

3.7.1.  Internal market for key economic services sectors – Current situation 

Respondents engaged in a very limited way into the questions on their experience as providers 
contracting insurance coverage for cross-border activities.  

A majority of those who replied (20 respondents) confirmed that insurance obligations entail a 
certain  degree  of  administrative  burden  for  service  providers.  Among  the  sectors  most 
affected  by  difficulties  related  to  insurance,  the  following  were  mentioned:  construction, 
architectural and engineering services.  

3.7.2.  Need for action and potential impact of policy options 

The  majority  of  respondents  to  the  online  questionnaire  consider  that  difficulties  should  be 
addressed at national  level or  be left to  the markets, while around one quarter consider  that 
difficulties need to be addressed at EU level or at both EU and national level; as regards the 

92 

 
 
action  to  be  taken,  of  those  who  considered  this  question  relevant,  13  %  pleaded  for 
administrative action, 13 % for regulatory action and 18 % for a combination of both.  

The majority opted for the use of points of contact in Member States for access to insurance 
purposes, while around 20% agreed with standardisation of information and another 20% with 
the  creation  of  electronic  comparison  tools;  the  majority  agreed  with  partial  or  full 
harmonisation of insurance conditions; nevertheless, the majority considers that the reduction 
of administrative barriers or of regulatory barriers related to insurance would have little or no 
impact on the provision of services and related costs. 

3.8. Questions on insurance – perspective of insurers [questions 97 to 100 of the 

online questionnaire] 

Most insurers or insurers' associations who answered to the questionnaire indicated that any 
measures  taken  on  professional  indemnity  insurance  under  the  European  services  e-card 
should not affect the business freedom of insurers in granting cover for certain services or not. 

Insurers pointed out to the fact that differences in national liability laws and the ensuing costs, 
as well as cultural differences justify different insurance products across the Member States. 
Insurance  Europe,  supported  by  several  national  insurers'  associations,  suggested  that  any 
action should focus on the issue of access to information on applicable insurance obligations 
at national level, rather than aiming at harmonisation measures at EU level. A better use of the 
Points  of  Single  Contact  (PSCs)  under  the  Services  Directive  should  be  made.  A  national 
association  also  suggested  creating  a  European  facilitator  for  access  to  insurance,  without 
coercive power, but helping service providers in concrete cases. 

Most  insurers  did  not  answer  the  specific  questions  of  the  consultation  but  rather  provided 
further explanations. This is the case concerning the track record of the service provider from 
the  home  country,  this  would  be  already  taken  into  account  by  insurers  to  some  extent,  but 
there  should  be  no  legal  obligation  to  do  so.  Even  if  this  is  not  a  standard  approach  so  far, 
insurers  also  issue  track-record  documents  to  clients  upon  request.  Several  respondents 
confirmed that they offer insurance coverage for activities of clients in other Member States, 
while  the  remaining  respondents  indicated  that  the  predefined  answers  are  not  applicable: 
insurers explained that they do not see a lack of insurance offer for coverage of cross-border 
services; insurers are namely active through the freedom of provision of services for insurance 
companies, through the freedom of establishment for them or through networks of insurers or 
insurance  brokers,  in  order  to  serve  their  clients  on  a  cross-border  basis.  Respondents  also 
confirmed that insurance products adapted to the duration of services are available, although 
there is no uniform practice in this regard. 

3.9. Questions to national authorities [questions 101 to 107 of the online 

questionnaire] 

Respondents to this section of the online questionnaire were only public authorities or related 
organisations providing a public service: administrative bodies at national and regional level, 
chambers of commerce or of professionals with a public mandate. 

A  slight  majority  of  the  respondents  believe  that  it  is  to  Member  States  to  ensure  that 
procedures  are  fully  electronic  (52%).  56%  of  the  respondents  are  registered  in  IMI;  have 
used it in the last three years to communicate with authorities from other Member States (for 
45% of them) and found it efficient (43% against 23%). 

93 

 
 
 
More  and  easier  information  exchange  between  Member  States  regarding  service  providers 
established  in  one  Member  State  that  want  to  set  up  a  presence in  another  Member  State  is 
welcomed by an overwhelming  majority of national authorities, either because it could help 
the assessment of the application in the host Member State (69%) or because it would increase 
mutual trust (53%). Such an information exchange should happen through IMI for 87% of the 
respondents  and  could  include  basic  information  about  a  service  provider  (84%),  specifics 
about  the  type  of  activity  and  information  about  qualifications  of  professionals,  posted 
record  and  economic 
workers,  health  and 
solvency/soundness  of  the  company  (76%)  and  about  compliance  with  sector-specific 
requirements in the home Member State (61%). 

(80%),  about 

the  criminal 

safety 

3.10. General questions on scope of the actions [questions 108 to 111 of the online 

questionnaire] 

Nearly one third of respondents answered this section of the online questionnaire. 

21%  of them considered that business services should be covered by the initiative and 16% 
that  it  should  cover  construction  services.  Respondents  referred  to  general  construction, 
engineering  and  architectural  services.  Tax  advice  was  mentioned  in  23%  of  responses  and 
accounting services were mentioned in 19% of cases. 

34% of respondents said the initiative could cover other services too, such as craftsmanship 
(7%) or tourism (2%). Only a few respondents (2%) considered any initiative on a passport 
should only apply to non-regulated professions. 

26%  of  respondents  considered  that  the  European  Services  e-card  should  not  apply  to  any 
service. This figure includes those who expressly expressed reservations the application of a 
European  services  e-card  to  their  own  sector  of  activity,  without  commenting  on  others,  as 
well  as  those  who  said that  this  question  should  not  be answered  as  long  as  we  don't  know 
what the European services e-card would look like. 

4.  Meetings with stakeholders over the past months: 

The Commission also consulted with stakeholders at numerous occasions, some of which are 
summarised below. 

The  Commission  carried  out  nine  workshops  in  key  cross-border  regions  of  the  EU143 
between September and November 2014 in the context of the Single Market Forum, with a 
final meeting taking place on 26 March 2015 in Riga. The objective of these workshops was 
to  increase  understanding  of  the  real  barriers  to  providing  services  in  other  Member  State 
faced  by  businesses,  focusing  on  the  sectors  of  business  services,  construction,  retail  and 
tourism,  but  also  welcoming  contributions  from  other  sectors.  Over  300  businesses  and 
business  organisations  participated  in  the  events.  The  issues  raised  in  the  course  of  these 
workshop  were  numerous  and  diverse:  registration  and  authorisation;  recognition  of 
professional  qualifications;  other  regulatory  issues;  posting  of  workers  and  social  security; 
standards  and  certification;  points  of  Single  Contact  and  access  to  information;  tax  (direct 
taxation and VAT); public procurement; non-regulatory barriers. 

The Commission also pursued these discussions in the following cycle of the Single Market 
Forum, in particular at the closing conference organised together with the  Dutch Presidency 

143 Thessaloniki, Frankfurt (Oder), Verona, Vilnius, Ljubljana, Copenhagen, Brussels, Oporto and Paris 

94 

 
 
                                                 
on 13 June 2016 in Amsterdam, with a workshop on the Services Passport. The participants 
came to the following conclusion: 

"Governments  should  help  businesses  and  entrepreneurs  overcome  regulatory  and 
administrative barriers when wanting to deliver services in other MS, inter alia by facilitating 
the required flow of information. 
To that end, the creation of a “Services Passport” (still mentioned in these terms at the time) 
can help to increase trust and boost trade and investment in services, provided it is an EU-
wide  instrument,  voluntary,  digital,  comprehensive,  applies  the  once  only  principle  and  this 
way provides real value added for businesses. 
The possible “Services Passport” should address administrative and regulatory barriers, in 
particular insurance, licensing and certification. It should be introduced gradually and cover 
specifically selected sectors." 

The  Commission  also  engaged  with  stakeholders  at  other  occasions:  a  meeting  with 
stakeholders  from  the  construction  services  sector  on  1  February  2016;  a  meeting  more 
oriented on business services on 5 July 2016 and the stakeholder conference on 6 September 
2016. 

Around  30  stakeholders  participated  to  the  meeting  of  1  February,  mostly  EU  and  national 
associations as well as trade unions active in the sector, such as: FFB representing the French 
building  companies,  ACE  representing  architects,  CEBC  active  in  the  building  control 
services, the trade union EFBWW, etc. The purpose of the meeting was to present the early 
stage discussions on the European services e-card initiative and the results of the Commission 
study on construction.144 

in  Brussels.  The  participants 

represented  European  associations 

A meeting with 40 stakeholders mostly from the business services sector was held on 5 July 
2016 
(including 
BusinessEurope,  Eurochambres,  UEAPME,  InsuranceEurope,  ECFA/FEANI  representing 
engineers, ACE representing architects, FEE representing accountants), national associations 
(e.g. from DE, FR, NL, DK, CZ, LU) and individual companies (mainly from DE and FR). 
The objective of this meeting was to engage with stakeholders preparing contributions to the 
public  consultation.  Although  the  feedback  from  stakeholders  was  mixed,  the  majority  of 
stakeholders expressed increasing support for a European Services e-card and had questions 
on  how  it  could  work.  The  issues  that  interested  stakeholders  were,  for  example,  the  added 
value of the European services e-card compared to the Services Directive, the validity period 
of the European services e-card and the grounds for refusing to issue a European services e-
card. Regarding the potential regulatory impact of the European services e-card, stakeholders 
asked  about  how  the  targeted  regulatory  barriers  are  chosen  and  also  had  questions  about  a 
potential  negotiation  procedure  between  authorities  of  different  Member  States  and  about 
what would happen if the authorities do not reach an agreement. 

A conference on the European services e-card was held on 6 September 2016 in Brussels, to 
which more than 170 stakeholders participated, with very diverse profiles from all around the 
EU: service providers, or associations active in business services (in particular accountancy, 
architecture,  engineering  and  tax  advice),  in  construction  services  and  in  the  field  of 
insurance;  chambers  of  commerce  and  of  professionals;  representatives  of  Member  States 

144  Simplification  and  mutual  recognition  in  the  construction  sector  under  the  Services  Directive  - 
MARKT/2014/087/E, February 2016. 

95 

 
 
 
                                                 
(experts  from  national  administrations  and  from  permanent  representations  in  Brussels); 
experts from the European Parliament.  

The format of the conference was on purpose defined to:  

1.  Put  forward  “real-life”  examples  of  how  service  provision  is  performed  in  cross-
border contexts and what difficulties are encountered. To this aim, the following 
stakeholders  made  presentations  on  specific  issues:  Mr  Bruno  Clicquot  de  Mentque, 
Chairman  of  CERFRANCE,  presented  the  perspective  of  his  company  providing 
accountancy  services  in  France  and  wanting  to  develop  across  borders;  Prof.  Ralf 
Niebergall,  Vice-president  of  Bundesarchitektenkammer  e.V,  presented 
the 
perspective  of  architects  and  the  challenges  faced  by  this  sector  for  cross-border 
developments;  Mr  Madis  Ehastu,  Head  of  Trade  and  Services  division,  Estonian 
Ministry  of  Economic  Affairs  and  Communications,  presented  an  advanced 
mechanism set in place by Estonia to enhance cross-border development of companies 
and professionals of construction  sector  in  Finland;  Mr Martin van der Ende, Senior 
Consultant  Labour  and  Social  Policy,  Ecorys,  presented  the  first  trends  of  the  study 
conducted on behalf of the Commission on administrative costs for business services. 

2.  Engage  with  stakeholders  on  possible  policy  options  for  a  European  services  e-card 

(discussions on small tables of 8 persons). 

a.  A  first  breakout  session  was  organised  to  discuss  the  options  envisaged  to 
address administrative barriers. At this occasion, stakeholders confirmed the 
trends  identified  in  the  public  consultation:  a  wide  majority  of  stakeholders 
agreed with the need of EU action to address administrative barriers to cross-
border services. 

i.  On  the  information  to  be  included  in  the  card,  stakeholders  agreed 
that  basic  information  (e.g.  name,  company  type,  legal  establishment, 
to  which  sector  it  belongs)  is  necessary,  as  well  as  information  about 
VAT number in the home Member State, about professional indemnity 
insurance coverage in the host Member State, about the  history in  the 
country  of  origin,  would  be  relevant.  Most  stakeholders  also  showed 
interest  if  information  about  the  workers  to  be  posted  also  appears  in 
the  card,  although  representatives  of  the  construction  sector  did  not 
share  this  opinion.  In  addition,  some  stakeholders  indicated  that 
information  on  social  security  registration  would  be  useful  for  an 
authority  to  judge  of  a  service  provider.  Respondents  found  it  natural 
the solutions to build this instrument within IMI. 

ii.  On  the  potential  roles  of  coordinating  authorities  in  the  Home 
Member  State,  stakeholders  showed  interest  for  public  authorities  to 
ensure that it reuses information that it already has, that it liaises in this 
way  with  other  relevant  authorities,  that  it  ensures  that  the  final 
information  provided is reliable, that it cooperates fully with the Host 
Member  State  authority  to  maximise  trust  and  dialogue  in  particular 
respecting deadlines. On the role of Host Member State coordinating 
authority,  most  stakeholders  mentioned  the  need  to  keep  pre-defined 
conditions  under  which  it  could  refuse  and  revoke  a  card,  require 
additional information, especially for cases of secondary establishment. 
A  large  majority  of  stakeholders,  including  national  administrations, 
shared  the  need  to  leave  it  to  the  Member  States  to  determine  which 
structure  would  be  best  suited  to  accomplish  this  coordination  tasks, 

96 

 
 
 
taking the examples of Points of Single Contact if they are sufficiently 
operational  according  to  the  provisions  of  the  Services  Directive,  or 
chambers  of  commerce  when  they  perform  public  administration 
service.  A  large  majority  of  stakeholders  also  expressed  the  need  to 
reduce documents as most as possible in the procedure, and supported a 
solution of automatic translation for the information provided. 

iii.  Stakeholders  shared  divergent  views  on  the  issue  of  fees,  some 
indicated  that  it  should  be  reasonable  and  proportionate  to  the  cost  of 
the procedure, and some others, including national administrations, that 
did  not  find  justified  to  ask  fees  to  service  providers  for  such  “little” 
coordination efforts by the Member States. 

b.  A second breakout session was held to discuss options to address regulatory 
barriers.  There  as  well,  the  trends  identified  in  the  feedback  to  the  public 
consultation were confirmed in the discussions with stakeholders present: 

i.  Representatives from the construction sector, mostly associations and 
trade unions rather than service providers themselves, recalled that they 
do  not  see  relevant  that  their  sector  is  included  in  the  scope  of  the 
initiative. 

ii.  The  majority  of  stakeholders  answered  that  it  is  not  acceptable  that  a 
service provider is required to change its corporate structure at home 
to  operate  in  another  Member  State.  Building  on  this,  a  majority  of 
stakeholders save from the construction sector, indicated that EU action 
addressing  regulatory  requirements  would  be  useful  to  ensure  a  level 
playing  field  between  all  service  providers,  but  as  long  as  the  public 
interest is preserved, as well as quality and security. 

iii.  Stakeholders  also  shared 

their  views  on  possible  alternative 
safeguards  which  could  be  defined  at  EU  level  to  accommodate 
policy  concerns  of  Member  States  (in  particular  in  relation  to 
legal  forms,  shareholding,  voting  rights  and 
requirements  on 
multidisciplinary  activities).  According  to  most  of  them,  there  is  not 
only  a  need  to  accommodate  concerns  of  Member  States  but  also  of 
professional  bodies.  While  calling  for  stronger  enforcement  of  the 
Services  Directive  as  a  first  short-term  solution,  some  stakeholders 
recognized  the  need  to  reflect  on  the  issue  of  proportionality  of 
regulatory requirements, and reflected on solutions tailored to specific 
sectors. They made it clear, nevertheless, that solutions would need to 
differ  between  cases  of  temporary  cross-border  provision  of  services 
and cases of secondary establishment. 

iv.  On  the  issue  of  insurance,  stakeholders  representing  the  insurance 
sector (on the side of the insurance industry and not customers) showed 
contradiction  with  the  trends  identified  in  the  responses  to  the  public 
consultation, indicating that it would be complicated for the insurance 
the 
industry 
customers’  side  would  however  favour  an  easier  solution  for  them  to 
contract cross-border insurance contracts. 

track-records.  Stakeholders  from 

to  make  use  of 

The Commission also held numerous bilateral stakeholder meetings on the European services 
e-card,  mostly  with  European  or  national-level  associations.  Meetings  were  held  with 
stakeholders from all affected sectors, including: 

97 

 
 
 
 

 

the  business  services  sector  (e.g.  the  Architects’  Council  of  Europe  (ACE),  the 
Federation  of  European  Accountants  (FEE),    Confédération  Fiscale  Européenne 
(CFE), Conseil Supérieur de l'Ordre des Experts-Comptables (CSOEC), the Institute 
of  Chartered  Accountants  of  England  and  Wales 
Institut  der 
Wirtschaftsprüfer  in  Deutschland  (IDW),  Verband  Beratender  Ingenieure  (VBI),  the 
Royal  Netherlands  Institute  of  Chartered  Accountants  (NBA)  and  the  German 
Association of Liberal Professions (BFB)); 
the construction sector (e.g. the European Federation of Building and Woodworkers 
(EFBWW), 
the 
Consortium of European Building Control (CEBC));  
the insurance sector (e.g. InsuranceEurope); 

the  European  Construction  Industry  Federation  (FIEC)  and 

 
  associations  representing  businesses  in  general  (e.g.  BUSINESSEUROPE  and 

(ICAEW), 

EUROCHAMBRES). 

Bilateral  meetings  were  mostly  focused  on  answering  stakeholders'  questions  about  how  a 
European  services  e-card  could  potentially  work.  Stakeholders  also  pointed  out  possible 
difficulties in creating a European services e-card at these meetings but also expressed support 
for the European services e-card.  

In  parallel,  the  Commission  pursued  its  regular  dialogue  with  Member  States,  via  bilateral 
meetings but most particularly in the context of its Experts Group on the implementation of 
the  Services  Directive  with  specific  discussions  on  the  European  services  e-card  at  these 
meetings in 2016: 25 January, 15 March, 28 April, 12 July and 20 September. Other meetings 
will also follow in the coming months. 

98 

 
 
 
 
 
 
Annex 3: Who is affected by the initiative and how 

The following stakeholders would be affected by the initiative (under the options foreseen): 

  Service providers wishing to expand their activities to other Member States' markets will 
benefit  from  reduced  obstacles  to  offering  services  across  borders.  The  initiative  will 
increase  legal  certainty  and  ensure  administrative  simplification  for  service  providers. 
The costs incurred by services providers to complete formalities would decrease. Service 
providers would be able to deal with a coordinating authority in their home Member State 
which  would,  inter  alia,  enable  communications  in  a  familiar  language.  All  of  this  is 
particularly important for SMEs who may not have the resources to overcome significant 
administrative burdens associated with cross-border expansion. The European services e-
card  is  available  to  providers  previously  established  in  a  Member  State.  As  a  result, 
subsidiaries  of  companies  from  third  countries  established  in  the  EU  would  be  able  to 
apply for a card as well.145  

Overall, the reduction of barriers will promote increased cross-border activity by service 
providers,  who  may  then  explore  a  broader  client  base  across  a  wider  geographical 
market and therefore potentially enjoy greater profits. Conversely, some service providers 
will see an increase in competition from foreign providers, thus putting more pressure on 
them as far as the quality and price of services are concerned.  

  National  authorities  in  several  sectors,  namely  in  the  home  Member  State  will,  on 
average, face some additional administrative burdens following the initiative as compared 
to the situation today. Namely, the initial responsibility to process applications would lie 
with  the  home  Member  State  rather  than  the  host  Member  State,  thus  requiring  some 
additional  efforts  in  terms  of  coordination  and  verification.  The  additional  burden  may 
however  be  very  limited,  depending  on  how  relevant  authorities  and  databases  are 
organised and interacting today. It may also involve professional associations. Moreover, 
by making it easier for domestic service providers to expand into other markets, Member 
States'  authorities  will  ultimately  benefit  from  increased  export  opportunities  for  their 
national providers.  

By bundling relevant information about the service provider and certain procedures into a 
single  procedure,  authorities  in  host  Member  States  will  benefit  from  a  more  complete, 
centralised overview of incoming service providers than is the case today. This  may be 
useful for advance checking as well as ex post controls and inspections. 

Overall, the initiative will serve to enhance dialogue, administrative cooperation and trust 
between national authorities in home and host Member States. In this regard, the initiative 
and  the  clear  procedure  it  entails  (including  the  supporting  IT  workflow)  can  make  it 

145  Branches,  agencies  or  offices  of  such  companies  should  not,  in  accordance  with  Article  48  of  the  Treaty 
which reserves freedom of establishment and free movement of services to companies and firms constituted in 
accordance  with  the  laws  of  a  Member  State  and  having  their  registered  office,  central  administration  or 
principal place of business within the Union. 

99 

 
 
 
 
                                                 
easier  for  Member  States  to  process/review  applications  from  outgoing  or  incoming 
service providers.  

The  impact  of  the  initiative  on  Member  States'  authorities  including  associated 
administrative costs is outlined in further detail in Annex 8. 

  For the customers of service providers, notably industry clients but also consumers in 
the key services sectors covered, the initiative would bring an increase in choice and as 
well as lower prices following increased competition between service providers.  

  The Commission will primarily need to carry out technical work in relation to the IMI 
system  to  accommodate  the  procedure  and  necessary  functionalities  underpinning  the 
initiative. Such technical work will require staff resources and will have some impact on 
the  EU  budget.  However,  costs  are  expected to  remain  below  5  million  EUR  given  the 
choice to make use of the already existing IMI system.  

In  the  medium  to  longer  term,  the  Commission  will  monitor  how  the  initiative  is 
implemented  by  Member  States  and  evaluate  its  effects.  This  would  form  part  of  the 
"daily business" of the Commission and would therefore not have any specific budgetary 
implications.  

100 

 
 
 
 
 
Annex 4: Evaluation of the Services Directive implementation to remove 
obstacles to cross-border activities in key services sectors 

1. Introduction ........................................................................................................................ 105 

2. The Services Directive – background ................................................................................ 105 

2.1 Situation before the Services Directive ........................................................................ 105 

2.2. Services Directive: objectives and legal framework ................................................... 108 

2.2.1 General objectives ................................................................................................. 108 

2.2.2 Legal framework - relevant provisions of the Services Directive ......................... 108 

3. Evaluation questions .......................................................................................................... 113 

4. Methodology ...................................................................................................................... 113 

5. Implementation/state of play .............................................................................................. 114 

5.1 Implementation until end-2011 .................................................................................... 114 

5.2 Implementation since 2012 ........................................................................................... 120 

5.3 More detailed evidence on remaining obstacles today ................................................. 121 

6. Evaluation of the Services Directive implementation ........................................................ 126 

7. Conclusions ........................................................................................................................ 133 

101 

 
 
 
 
 
 
 
1. Introduction 
The  purpose  of  this  brief  evaluation  is  to  assess  the  effectiveness,  efficiency,  coherence, 
relevance and EU added value of the Services Directive in removing obstacles to cross-border 
activities in key services sectors.  

The  document  is  structured  as  follows.  First,  an  overview  will  be  provided  regarding  the 
situation  before  the  introduction  of  the  Services  Directive  as  well  as  the  different  legal 
provisions  of  the  Services  Directive  that  are  relevant  for  this  evaluation.  Second,  the  main 
evaluation questions used as a basis for this analysis will be outlined as well as the evidence 
used. Third, an overview will be provided of the implementation of the relevant provisions of 
the Services Directive by Member States since the introduction of the Directive until today. 
Finally, on this basis conclusions will be drawn on the performance of the Services Directive 
by answering a set of evaluation questions related to the five standard evaluation criteria.   

2. The Services Directive – background   

2.1 Situation before the Services Directive 
At the Lisbon Summit in 2000, EU leaders agreed a strategic goal of making Europe by 2010 
"the most competitive  and dynamic  knowledge-based  economy in  the world".  As part  of the 
programme  of  actions  designed  to  achieve  this,  the  Council  concluded  that  there  should  be 
"by  the  end  of  2000  a  strategy  for  the  removal  of  barriers  to  services".  The  Commission 
Communication of December 2000146 set out a two-stage strategy in response to the European 
Council’s request. The first stage involved the identification and analysis of existing barriers 
to  the  cross-border  provision  of  services  and  establishment  and  was  completed  by  the 
Commission’s report on “The State of the Internal Market for Services”147. The second stage, 
based on that analysis, was to bring forward appropriate solutions to the problems identified. 
As  a  result  of  this  process,  the  Services  Directive  was  adopted  in  2006  and  had  to  be 
implemented by Member States by the end of 2009. 

Report on the state of the Internal Market for Services (2002)  

The  2002  Commission  report  "The  State  of  the  Internal  Market  for  Services"  outlined  the 
barriers  which  hampered  the  expansion  of  service  activities  across  national  borders  at  the 
time.  The report was primarily based on a consultation with interested parties and focused on 
barriers  to  cross-border  service  activities  in  each  stage  of  the  business  process.  The  results 
showed that service providers faced a range of different obstacles.  

First,  regarding  temporary  cross-border  service  provision,  a  number  of  barriers  were 
identified including: 

  A requirement to be established or to have a local representative in the Member State 

in which the service is delivered; 

146 COM (2000) 888 of 29.12.2000. 
147 COM (2002) 441 of 31.07.2002. 

102 

 
 
                                                 
  Member States subjecting service providers to the same authorisation, registration or 
declaration procedures, which apply to operators established in their own territory; 
  Requirements regarding the internal structure and legal form of the service provider, 
such  as  a  requirement  to  have  a  specific  legal  form  and  shareholding  and/or 
management structure; 
Imposition  of  different  conditions  governing  the  exercise  of  an  activity  in  different 
Member States. 

 

Secondly, regarding secondary establishment in another Member State, some of the barriers 
identified by the report were: 

  Quantitative restrictions imposed on access to service activities, e.g. quotas governing 

the number of service providers; 

  Territorial restrictions, which confined authorisation to engage in service activities to 

a specific region or locality; 

  Nationality or residence requirements for persons related to the service provider, such 

as shareholders or managers; 

  Authorisation  and  registration  procedures,  including  the  failure  to  take  into  account 
requirements  already  met  by  a  service  provider  in  a  Member  State  in  which  he  is 
established and the bureaucratic nature of authorisation and registration procedures; 

  Restrictions on multi-disciplinary activities; 
  Requirements regarding the legal form and internal structure of economic operators, 
including shareholding requirements and rules on a minimum number of employees. 

Third, regarding the use of inputs necessary for the provision of services, the report brought 
out the following barriers, among others: 

  Difficulties related to posting of workers to another Member State, such as the burden 

and complexity of administrative formalities; 

  Difficulties related to cross-border use of business services, which may, for example, 
prevent a company from using providers from other Member States whose services are 
more attractive in terms of quality or price. 

Finally,  regarding  the  after-sales  aspect  of  services,  the  report  identified  that  one  of  the 
difficulties  concerned  liability  and  professional  indemnity  insurance  of  service  providers. 
Professional  liability  insurance  schemes  varied  markedly  between  Member  States  and 
between  service  activities  and  were  often  legally  complex.  These  disparities  were  found  to 
cause  difficulties  in  the  cross-border  provision  of  services,  as  Member  States  have  an 
incentive  either  to  impose  their  own  insurance  schemes  on  service  providers  from  other 
Member States or to require proof of equivalent insurance coverage in the country of origin, 
which is difficult if not impossible to provide. 

The report showed that often, the above restrictions were not found in the body of the legal 
texts,  but  rather  in  the  behaviour  of  certain  administrations  or  in  the  way  in  which  the 
administrative procedures were perceived or implemented.  

103 

 
 
The report also noted the horizontal nature of the barriers, as many of them were common 
to  a  large  number  of  widely  varying  sectors  of  activity.  A  large  number  of  services 
encountered the same problem: the Member State of destination treated the service provider 
as if he were established on its territory, and hence subjected him fully to its legal system, for 
example  by  imposing  a  system  of  authorisation  on  the  service  provider.  The  report  also 
pointed out that a wide range of cross-border services were affected by a high degree of legal 
uncertainty  as  to  their  legality,  since  this  depended  on  a  case-by-case  assessment  by  the 
national authorities. In particular, national regulations were often unclear or ambiguous as to 
whether they might be applicable to providers established in another Member State. 

In  addition  to  the  above-mentioned  barriers,  which  are  of  a  legal  nature,  the  report  also 
identified  several  non-legal  barriers.  One  of  these  was  the  lack  of  regulatory  information, 
which  occurred  at  all  stages  of  the  business  process.  For  example,  lack  of  information  on 
necessary  authorisations,  qualifications  requirements  and  tax  and  employment  law  were 
brought out as  problematic areas in the report. In addition, lack of knowledge  of competent 
authorities, procedures and formalities hindered the cross-border provision of services. Lack 
of  information  and  transparency  were  a  particular  problem  in  relation  to  identifying  the 
appropriate competent authorities in another Member State, obtaining all the necessary forms 
and  understanding  the  procedures.  Some  respondents  complained  that  on  occasion  public 
authorities  provided  contradictory  information  and  it  was  suggested  that  there  was  little 
cooperation  between  government  bodies  in  the  various  Member  States.  The  lack  of 
availability of necessary forms on-line was also emphasised. 

Finally,  the  report  showed  that  these  obstacles  to  the  internal  market  for  services  have  cost 
implications for the entire economy. The report specifically mentioned  reduced investment 
and reduced economies of scale and scope for service providers as the effects of the barriers. 
For example, reduced economies of  scale and scope  resulted from the fact that a successful 
business  model  could  not  be  exported  because  several  or  all  of  the  stages  of  the  business 
process needed to be changed to comply with differing legal and administrative requirements 
in other Member States. 

The  report  identified  SMEs  and  the  users  of  services,  in  particular  consumers,  as  the 
principal  victims  of  the  barriers.  SMEs  were  predominant  in  the  services  industry, 
accounting  for  a  far  greater  proportion  of  total  output  than  in  manufacturing,  while  at  the 
same  time  being  more  severely  affected  by  compliance  costs  than  larger  companies.  SMEs 
were  also  found  to  be  exposed  to  mergers  and  acquisitions,  as  medium-sized  firms 
constrained  from  expanding  abroad  but  often  with  significant  local  knowledge,  experience 
and  innovation  potential,  were  attractive  targets  for  larger  companies.  SMEs  in  small  and 
peripheral Member States were identified as particularly disadvantaged by the barriers. 

The report concluded that service users, and in particular consumers, ultimately paid the price 
for  the  existence  of  Internal  Market  barriers  in  the  services  field.  It  was  noted  that  citizens 
suffer  directly  when  they  are  prevented  from  using  services  offered  by  suppliers  in  other 
Member  States,  or  when  regulatory  and  administrative  fragmentation  dissuades  companies 
from  offering  their  services  to  customers  residing  in  other  Member  States.  The  report 

104 

 
 
maintained that this situation also contributed to the lack of consumer confidence in services 
from other Member States. 

2.2. Services Directive: objectives and legal framework 

2.2.1 General objectives 

The  Services  Directive  aims  to  contribute  to  a  genuine  Internal  Market  in  services  so  that 
businesses and consumers can take full use of the opportunities it presents and benefit from 
the fundamental freedoms guaranteed in Articles 49 and 56 of the Treaty. The Directive was 
adopted in 2006 and its transposition deadline was December 2009. By removing unnecessary 
barriers which hamper both cross-border trade and investment in the services sectors covered, 
the Directive was expected to significantly stimulate growth. The Directive has a horizontal 
nature  and  a  broad  scope  in  terms  of  sectors  and  requirements  covered.  A  large  variety  of 
services sectors are covered (representing more than 45% of GDP in the EU) such as business 
services, construction, retail and wholesale trade, tourism, etc.148  

2.2.2 Legal framework - relevant provisions of the Services Directive 

The  focus  of  this  annex  is  on  the  performance  of  the  Services  Directive  with  regard  to 
achieving its objective of removing obstacles for service providers to move across the Single 
Market.  Different  provisions  of  the  Directive  aim  to  simplify  administrative  procedures, 
remove  regulatory  obstacles  (regarding  freedom  of  establishment  as  well  as  freedom  to 
provide  temporary  cross-border  services)  and  enhance  both  mutual  trust  as  well  as 
administrative  cooperation  between  Member  States.149  The  provisions  relevant  for  this 
evaluation  will  be  shortly  described  below.  An  intervention  logic  summarising  how  the 
Services Directive was expected to work is provided in annex. 

Administrative simplification 

Regarding simplification of administrative procedures, the Services Directive includes several 
requirements towards Member States.  

First, all procedures and formalities applicable to access a service activity and to the exercise 
thereof  have  to  be  examined  and,  if  necessary,  simplified  (Art  5(1)).  This  means  assessing 
whether  administrative  requirements  are  necessary  or  whether  some  procedures  or  parts  of 
these  procedures  can  be  abolished  or  replaced  by  less  burdensome  alternatives.  In  addition, 
this also includes assessing whether all evidence and documents asked are needed. Documents 
from other Member States generally have to be accepted without requiring the production of 
the documents in original form or as a certified copy or a certified translation (Art 5(3)). 

Second,  fully  functioning  and  interoperable  electronic  procedures  have  to  be  set  up (Art  8). 
Service  providers  should  be  able to  complete  electronically and  at  a  distance  all  procedures 

148  More  details  on  the  background  and  objectives  of  the  Services  Directive  are  available  here: 
http://ec.europa.eu/growth/single-market/services/services-directive/index_en.htm  
149  For  a  detailed  description  of  the  legal  framework  of  the  Services  Directive,  see:  Handbook  on  the 
implementation  of  the  Services  Directive,  http://bookshop.europa.eu/en/handbook-on-implementation-of-the-
services-directive-pbKM7807096/  

105 

 
 
                                                 
and formalities necessary to provide a given service. Electronic means have to be available for 
the whole administrative process, from the service provider’s initial application/submission of 
documents  to  the  final  reply,  if  required,  from  the  relevant  competent  authority.  For  this, 
points of single contact have to be set up, through which service providers should be able to 
complete  all  procedures  and  formalities  needed  for  access  to  and  exercise  of  their  service 
activities (Art 6).  

These points of single contact are meant to be the single e-portals from the perspective of the 
service provider, so that he does not need to contact several competent authorities or bodies to 
collect  all  relevant  information  and  to  complete  all  necessary  steps  relating  to  his  service 
activities.  These  points  of  single  contact  should  provide  clear  and  updated  information 
regarding  applicable  requirements,  means  of  redress  and  the  contact  details  of  competent 
authorities,  which  should  assist  service  providers  in  complying  with  those  requirements. 
Contact details of associations or organisations providing practical assistance should also be 
made available in points of single contact (Art. 7). 

Freedom of establishment 

Articles  9  to  15  of  the  Services  Directive  apply  to  cases  of  establishment,  irrespective  of 
whether a provider seeks to establish in another Member State or in his own Member State. 
These  provisions  apply  to  all  requirements  specifically  relating  to  the  establishment  of  a 
provider of a service, whether imposed at national, regional or local level and they also apply 
to rules enacted by professional bodies. 

First, Member States have to review existing authorisation schemes and make them compliant 
with Articles 9 to 13 of the Directive: 

  Authorisation  schemes  may  be  maintained  only  if  they  are  non-discriminatory, 
justified by an overriding reason relating to the public interest and proportionate (Art 
9);  

  Decisions  on  authorisations  cannot  be  taken  in  an  arbitrary  manner.  The  underlying 
conditions  need  to  comply  with  the  criteria  of  non-discrimination,  necessity  and 
proportionality.  In  addition,  they  need  to  be  clear  and  unambiguous,  objective, 
transparent and accessible, and made public in advance (Art-s 10(1)-10(2)); 

  Member States, when applying its national requirements, have to take into account the 
equivalent or essentially comparable requirements which have already been complied 
with  by  the  service  provider  (equivalence  assessment  for  mutual  recognition).  To 
achieve  this,  Member  States  should  lay  down  a  clear  obligation  on  the  part  of  the 
competent  authorities  to  take  account  of  equivalent  requirements  already  complied 
with in other Member States. (Art 10(3)); 

  Authorisations are to be generally granted for the whole territory of the Member State 
(Art 10(4)) and for an unlimited period, except in cases of limited number of available 
authorisations, which must then be limited in time (Art 11); 

  Limitations  on  the  number  of  available  authorisations  may  be  justified  by  an 
overriding  reason  relating  to  the  public  interest  (Art.  15)  but  they  are  the  rule  if 
motivated  by  the  scarcity  of  available  natural  resources  or  technical capacity,  and  in 

106 

 
 
those cases an impartial and transparent selection procedure must be put in place (Art 
12); 

  Authorisation procedures should not be dissuasive, nor unduly complicate or delay the 
provision  of  the  service.  Authorisation  procedures  need  to  be  carried  out  within 
reasonable periods  of time and  be subject to  proportionate fees, never exceeding the 
actual  cost  of  the  control  procedure.  In  case  an  application  has  not  received  any 
response within the set time period, the authorisation should be deemed to have been 
granted  to  the  provider,  except  if  overriding  reasons  of  public  interest  impose  an 
express  decision;  refusals  should  be  duly  motivated  (Art  13)  and  means  of  redress 
must be made available (Art 10(6)); 

Second, Art 14 of the Directive provides a list of requirements which Member States cannot 
impose150  for access to or exercise of a service activity under any circumstances. Article 14 
prohibits for example the following requirements: 

  Requirements  based  directly  or  indirectly  on  nationality  or  the  location  of  the 

registered office of a company; 

  A prohibition on having an establishment in more than one Member State; 
  Restrictions on the freedom of a service provider to choose between a principal or a 

secondary establishment, or between a subsidiary, branch or agency; 

  An obligation to obtain a financial guarantee or insurance from an operator established 

in the same Member State; 

Finally, Art 15 of the Directive includes a list of requirements for access to or exercise of a 
service activity which Member States should not, in principle, impose, and are only allowed if 
non-discriminatory,  exceptionally  justified  by  an  overriding  reason  relating  to  the  public 
interest and proportionate. These requirements include for example: 

  An obligation on a service provider to take a specific legal form; 
  Requirements which relate to the shareholding of a company; 
  Fixed minimum and/or maximum tariffs with which the provider must comply.  

Freedom to provide (temporary cross-border) services 

In accordance with the Treaty, the Services Directive clearly distinguishes between the rules 
applicable to establishment and those applicable to temporary cross-border service provision. 
Establishment  involves  the  actual  pursuit  of  an  economic  activity  through  a  fixed 
establishment for an  indefinite period151. By contrast, according to  the case law of the ECJ, 
the freedom to provide (temporary cross-border) services is characterised by the absence of a 
stable and continuous participation in  the economic life of the host Member State152. While 
Art-s  9  to  15  concern  the  establishment  of  service  providers,  Art-s  16  to  18  deal  with 

150 See, in relation to the impossibility to justify the imposition of such requirements through national Law under 
any overriding reason of general interest , CJEU preliminary ruling in case C-593/13 (Rina Services), paragraph 
37 
151 Judgment of 25 July 1991, Factortame, Case C-221/89, paragraph 20. 
152 Judgment of 13 February 2003, Commission v Italy, Case C-131/01, paragraph 23. 

107 

 
 
                                                 
requirements  Member  States  may  impose  on  service  providers  who  provide  services  cross-
border on a temporary basis. 

Article  16  provides  for  the  freedom  to  provide  cross-border  services  without  unjustified 
restrictions.  Article  16(1)  provides  that  Member  States  may  not  impose  their  own 
requirements  on  incoming  service  providers  except  where  these  requirements  are  non-
discriminatory,  justified  by  reasons  of  public  policy,  public  security,  public  health  or  the 
protection of the environment and proportionate. In  addition, under Article 16(2)(3),  certain 
requirements  are  in  principle  not  allowed  for  any  temporary  cross-border  service  provision, 
and absolutely disallowed for temporary services provided at a distance. These requirements 
include:  

  The obligation to have an establishment in the territory where the service is provided; 
  The obligation to obtain an authorisation or a registration; 
  The ban on setting up an infrastructure; 
  Requirements, except for those necessary for health and safety at work, which affect 
the use of equipment and material which are an integral part of the service provided. 

Article 16 applies to all services falling within the scope of application of the Directive, with 
the exception of those services or matters listed in Art 17.  

Although  requirements  under  host  Member  State's  Law  are  thus,  as  a  rule,  inapplicable  to 
providers established elsewhere in the EU, the host Member State may impose certain case-
specific measures on the service provider related to the safety of services under Art.s 18 and 
35.  Such  case-by-case  derogations  of  the  freedom  to  provide  services  are  only  admissible 
when  safety  of  the  services  provided  is  demonstrably  compromised,  endangering  the 
protection  of  the  service  recipient,  and  even  though  measures  were  requested  of  the  home 
Member State under administrative cooperation obligations.  

Administrative cooperation 

Articles  28  to  36  establish  the  rules  for  administrative  cooperation  between  Member  States' 
authorities.  

Articles 28 and 29 oblige Member States to give each other mutual assistance, in particular to 
reply  to  information  requests  and  to  carry  out,  if  necessary,  factual  checks,  inspections  and 
investigations.  This  means  that  Member  States  will  not  be  able  to  refuse  to  cooperate  with 
each other. The obligation to  give mutual  assistance is comprehensive and encompasses the 
obligation to take all possible measures necessary for effective cooperation, for example using 
all  possible  means  to  find  information  if  the  information  is  not  already  available  and 
indicating if difficulties appear. 

In view of the sensitivity of information on good repute, Art 33 provides for specific rules for 
the  exchange  of 
information  concerning  criminal  sanctions  and  disciplinary  and 
administrative  measures.  Articles  30  and  31  provide  for  a  division  of  tasks  between  the 
different Member States involved in case of temporary cross-border provisions.  Concerning 
case-by-case derogations for temporary cross-border provisions, Art 35 provides for a specific 

108 

 
 
procedure for administrative cooperation which furnishes procedural safeguards ensuring that 
the  case-by-case  derogation  is  only  used  if  the  substantive  criteria  laid  down  in  Art  18  are 
fulfilled. Article 32 lays down a mechanism aiming to ensure that Member States inform all 
other Member States concerned and the Commission within the shortest possible time if they 
become  aware  of  acts  of  a  service  provider  or  specific  circumstances  relating  to  a  service 
activity  which  could  cause  serious  damage  to  the  health  or  safety  of  persons  or  to  the 
environment.  

Finally,  in  order  to  facilitate  communication  between  the  competent  authorities  of  different 
Member  States,  Art  34(1)  requires  the  Commission  to  set  up  an  electronic  system  for  the 
exchange  of  information  between  Member  States.  The  Commission  has  fulfilled  this 
obligation by setting up the Internal Market Information System (IMI). 

Other provisions relevant for this evaluation 

Article 23 concerns professional liability insurance and guarantees. Article 23(1) lays out the 
conditions under which a Member State may impose insurance coverage requirements: only 
when the services in question present a direct and particular risk to the health and safety of the 
recipient  or  a  third  person,  or  to  the  financial  security  of  the  recipient.  Art  23(2)  refers 
specifically  to  mutual  recognition  of  insurance  coverage  acquired  by  service  providers  who 
are already established in a Member State and want to establish in another Member State. The 
Member  State  where  a  service  provider  wants  to  establish  will  have  to  take  into  account 
essentially  equivalent  or  comparable  insurance  or  guarantee  requirements  to  which  the 
provider may already be subject to in the Member State of first establishment, and may not 
require the provider to take out any additional insurance or guarantee if the existing insurance 
or  guarantee  already  covers  the  territory  of  the  Member  State  where  the  provider  wants  to 
establish. Whether an insurance or a guarantee is equivalent or essentially comparable has to 
be assessed by the competent authorities in the light of its purpose and the cover it provides in 
terms of insured risk, insured sum or ceiling for the guarantee as well as possible exclusions 
from  the  cover.  Where  the  insurance  coverage  is  not  fully  but  only  partially  comparable,  a 
supplementary  arrangement  may  be  required.  In  any  case,  Member  States  have  to  accept 
attestations  of  such  insurance  cover  issued  by  credit  institutions  and  insurers  established  in 
other  Member  States  as  sufficient  evidence  of  compliance  with  the  insurance  obligation  in 
their territory. 

Art 25 means to remove requirements restricting the exercise of different activities jointly or 
in  partnership  where  such  restrictions  are  unjustified.  It  requires  Member  States  to  remove 
requirements  obliging  service  providers  to  exercise  a  given  specific  activity  exclusively  as 
well  as  requirements  restricting  the  exercise  of  different  activities  jointly  or  in  partnership. 
However,  Art  25  spells  out  conditions  under  which  such  restrictions  can  be  maintained  for 
regulated  professions  and  for  certification,  accreditation,  technical  monitoring  and  testing 
services. Restrictions on multidisciplinary activities aimed at ensuring the independence and 
impartiality  of  the  regulated  professions  can  be  justified  in  so  far  as  they  are  necessary  to 
guarantee  compliance  with  the  rules  governing  professional  ethics  and  conduct,  which  may 
vary according to the specific nature of each profession.  

109 

 
 
3. Evaluation questions 
In  order  to  guide  the  analysis  on  the  performance  of  the  Services  Directive,  the  following 
evaluation questions have been used: 

Effectiveness: 

1.  How  effective  have  the  different  provisions  of  the  Services  Directive  related  to 
freedom  to  provide  services  and  freedom  of  establishment  been  in  order  to  remove 
regulatory obstacles for service providers that want to go cross border?  

2.  Has  there  been  a  uniform  implementation  of  the  Services  Directive  (regarding  the 
removal of regulatory obstacles) across sectors, Member States and time? What are the 
factors influencing the implementation of the Services directive? 

3.  How well have the other provisions of the Services Directive related to administrative 
simplification and  administrative cooperation been put in practice by Member States 
and  how/to  what  extent  do  they  contribute  to  reaching  the  objectives  set  by  the 
Services Directive? 

4.  Overall,  how  effective  has  the  Services  Directive  been  in  generating  increased  GDP 

growth for the overall EU economy? 

Efficiency:  

5.  To what extent are the costs proportionate to the benefits achieved? 

Coherence:  

6.  Can the Services Directive be considered as (still) coherent with other EU instruments 

and policies? Is it coherent internally? 

Relevance:  

7.  Can the Services Directive (still) be considered to be relevant? 

EU added value: 

8.  Can  the  Services  Directive  be  considered  as  (still)  having  added  value  compared  to 

what could be achieved by Member States at national level? 

4. Methodology 
The Commission as well as external researchers have carried out a range of studies since the 
introduction of the Services  Directive to assess its implementation and impact . In addition, 
the European Court of Auditors carried out an analysis on the implementation of the Services 
Directive in 2016.153  

The  Commission  also  undertook  several  stakeholder  consultations  over  the  past  years  to 
investigate  the  experience  and  views  of  service  providers  regarding  remaining  obstacles  to 

153 Special report No 5/2016, "Has the Commission ensured effective implementation of the Services Directive?" 

110 

 
 
                                                 
cross-border  service  activities.  This  includes  9  workshops  across  the  EU  to  hear  from 
stakeholders  regarding  the  barriers  they  face  in  the  services  Single  Market  (2014/2015)  as 
well as the public consultation that was held in the context of this impact assessment (2016).    

This  annex  presents  the  critical  assessment  of  the  Commission  of  this  available  evidence. 
Section 5 presents an overview of the different analyses and stakeholder consultations carried 
out regarding the implementation/state of play of the Services Directive. On this basis, section 
6 provides replies to the evaluation questions outlined above. It focuses on the sectors which 
may  are  being  considered  for  the  initiative  and  does  not  cover  in  full  detail  other  sectors 
which may be subject to other specific initiatives such as retail.   

5. Implementation/state of play 
A  number  of  studies  have  been  carried  out  to  measure  the  implementation  of  the  Services 
Directive  implementation.  Two  periods  can  be  distinguished.  First,  implementation  by 
Member States over the period since the introduction of the Services Directive until end-2011 
led to an important number of reforms across many Member States. Second, reform progress 
by Member States over the period 2012 to 2015 has been much less intense. Both periods (and 
supporting evidence) will be discussed separately below. Then, more detailed evidence on the 
current  situation  regarding  remaining  obstacles  in  key  services  sectors  will  be  described  as 
well.  

5.1 Implementation until end-2011 
Several studies/analyses were carried out to understand how Member States have transposed 
the Services Directive by 2009 and further implemented it until end-2011. These also looked 
into the economic impact of these reforms.  

Mutual  evaluation  (2010)154  and  report  on  the  implementation  of  the  Services  Directive 
(2012)155 

The first major exercise to analyse the implementation of the Services Directive was the 2010 
mutual evaluation process. This was an evidence-based process of ‘peer review’ foreseen in 
Article 39 of the Services Directive to assess the state of the internal market for services after 
implementation of the Directive. In addition, as a follow-up to the mutual evaluation process 
the Commission published in 2012 updated information on the implementation of the Services 
Directive by Member States.  

Both  reports  showed  that  the  transposition  of  the  Services  Directive  led  to  an  important 
modernisation  of  national  legislative  frameworks  for  the  services  sectors  covered.  Many 
reforms  were  adopted  in  most  Member  States  to  abolish  barriers  or  reduce  their 
restrictiveness.  At  the  same  time,  implementation  progress  differed  significantly  across  the 
different provisions of the Services Directive as well as different services sectors. 

154 http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52011SC0102  
155 http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52012SC0148  

111 

 
 
                                                 
Table 1 gives  an overview of several  important provisions/articles of the Services Directive 
where (relatively) good implementation progress was reported in the 2010 mutual evaluation 
and 2012 report on the implementation of the Services Directive.  

Table 1 – SD articles with good implementation progress  

Services Directive provision  Description 
validity 
Nationwide 
authorisation (Art. 10(4)) 

of 

This provision was implemented by several Member States 
either  through  a  horizontal  law  (e.g.,  IT,  ES)  or  through 
for 
legislation  providing 
sector-specific 
automatic 
recognition  or 
recognition  of 
the  possibility  of 
authorisations obtained in another part of the territory (e.g., 
AT, DE). 
Member  States  were  active  in  removing  requirements 
based on nationality or residence which are clear violations 
of  EU  law  (such  obstacles  were  for  example  removed  in 
ES, NL, AT, BG, PL, RO, AT, IT and FR). 
These  requirements  were  in  force  in  national  legislation 
relating to the retail sector. They were removed in several 
Member States (such as BE, FR, LU, IT, NL, ES). 
Several  of  these  obstacles  were  removed,  mainly  in  the 
retail sector (for example in ES and FR). 

Such  obstacles  have  been  removed  in  sectors  such  as 
tourism, business services and construction (for example in 
EL and PT). 

As  a  consequence  of  the  Directive’s  implementation, 
several quantitative or territorial restrictions were abolished 
or amended (for example in EL, IT, ES, PT, LU, AT, FR). 
Only a limited number of such requirements were reported 
to  have  been  maintained and only  by few Member States.  
Several bans on having more than one establishment  have 
been  abolished  as  Member  States  considered  them  to  be 
disproportionate (e.g., in AT and IT). 
Following  implementation  of  the  Services  Directive,  a 
number of these requirements were abolished or made less 
stringent  because  they  have  been  found  unjustified  or 
disproportionate (e.g., in ES, PT, SI, DE). 
The  mutual  evaluation  process  and  2012  report  revealed 
that  they  are  relatively  widely  used.  The  discussion  with 
Member  States  confirmed  that  the  imposition  of  tariffs  is 
generally  perceived  as  a  severe  restriction  on  service 
providers,  which  impedes  them  from  competing  on  price 
and/or  on  quality.  A  number  of  Member  States  however 
decided  to  reform  or  abolish  tariffs  in  certain  services 
sectors (e.g., BE, BG, DE, EL, IE, IT, HU, MT, RO, ES).   
Were  shown  not 
the 
implementation  of  the  Services  Directive,  even  fewer 

to  be  very  common.  After 

112 

Requirements 
on 
nationality  or  residence  (Art. 
14(1)) 

based 

Requirements  on  an  economic 
needs test (Art. 14(5)) 

involvement 
operators 

Requirements  on  the  direct  or 
indirect 
of 
(Art. 
competing 
14(6)) 
Requirements 
to  obtain  a 
financial  guarantee  /insurance 
in the host Member State (Art. 
14(7)) 
Quantitative 
restrictions (Art. 15(2)(a)) 

territorial 

and 

Bans on having more than one 
(Article 
establishment 
15(2)(e)) 

to 

Requirements 
minimum 
employees (Article 15(2)(f)) 

number 

have 

a 
of 

Tariffs (Article 15(2)(g)) 

Obligations 
providers 

to 

on 
service 
supply  other 

 
 
specific  services  jointly  with 
their 
(Article 
15(2)(h)) 

services 

restrictions remain. Reforms were adopted by a number of 
Member States in this regard (e.g., IT, ES, FR, AT). 

At the same time, the mutual evaluation and the 2012 report also reported that on a number of 
provisions limited progress had been made. Table 2 gives an overview of such articles where 
only a limited number of Member States carried out reforms to implement them.  

Table 2 – SD articles with limited implementation progress 

Services  Directive 
provision 
Administrative 
simplification  (Art.  7, 
8) 

Authorisation 
schemes (Art. 9) 

Mutual  recognition  – 
equivalence 
assessment 
10(3) 

(Article 

Legal 
form 
requirements  (Article 
15(2)(b)) 

Description 

The  2012  report  on  the  implementation  of  the  Services  Directive 
highlighted that the establishment of PSCs posed a huge challenge 
to Member States. A first in-depth analysis156 was carried out on the 
functioning and usability of the PSCs. It concluded that most PSCs 
do  not  yet  comply  with  the  Services  Directive  in  legal  and 
regulatory  terms.  As  a  result,  the  Points  of  Single  Contact  had  not 
yet  led  to  a  simplification  in  administration  in  terms  for  providing 
temporary  cross-border  services  or  setting  up  a  business.  At  the 
same  time,  there  were  significant  differences  highlighted  between 
Member  States'  Points  of  Single  Contact  with  regard  to  the 
availability  and  quality  of  electronic  procedures.  The  gap  between 
the  high  performing  Points  of  Single  Contact  and  the  low 
performing  was  considered  to  be  important  with  major  differences 
across  the  portals  with  regard  to  the  strengths  and  weaknesses  of 
each portal.  
As  a  result  of  the  implementation  of  the  Services  Directive  some 
Member  States  reduced  the  scope  of  authorisation  schemes  and 
replaced,  for  certain  services,  authorisations  by  measures  such  as 
declarations (such changes were for example introduced in SK, MT, 
BG,  CY,  IT,  HU,  ES,  EL).  At  the  same  time,  numerous 
authorisation  schemes  remained  in  place  across  many  Member 
States and services sectors.  
Transposition  of  the  Services  Directive  brought  the  general 
principle  of  mutual  recognition  to  home  Member  States  internal 
law. However, sector-specific rules to implement the principle have 
remained  scarce  in  legislative  terms  across  practically  all  Member 
States, as has administrative implementation. 

These were notified by many Member States for a large variety of 
different  services.  Some  progress  was  achieved  during 
the 
implementation  of  the  Services  Directive  (e.g.,  through  reforms  in 
BE,  DK,  PT,  PL,  IT  and  FR).  However,  it  was  clear  that 
considerable  restrictions  remain.  These  concern  important  parts  of 
the  services  sector  and  include  services  with  a  significant  cross-
border  growth  potential.  The  discussion  during 
the  mutual 
evaluation  confirmed  that  legal  form  requirements  are  stringent 

156 https://ec.europa.eu/growth/single-market/services/services-directive/in-practice/contact/index_en.htm  

113 

 
 
 
 
 
                                                 
Shareholding 
requirements  (Article 
15(2)(c) 

Insurance 
requirements (Art. 23) 

Restrictions 
multidisciplinary 
activities (Article 25) 

on 

Tacit  approval  (Art. 
13(4) 

Freedom  to  provide 
(temporary 
cross-
border) 
services 
clause (Art. 16) 

obstacles for the internal market, which are particularly burdensome 
for  service  providers  from  other  Member  States,  where  different 
legal forms are made available. 
As  a  result  of  the  implementation  of  the  Directive,  a  number  of 
requirements  were  amended  (e.g.,  through  reforms  in  LU,  ES  and 
FR).  In  most  cases,  the  percentage  of  capital  that  may  be  held  by 
third  parties  was  raised.  Nevertheless,  a  considerable  number  of 
restrictions remain, in particular in the area of the business services. 
The  discussion  during  the  mutual  evaluation  confirmed  that 
shareholding  requirements  can  be  very  burdensome  on  service 
providers, in particular providers from other Member States, which 
may need to change their ownership structure in order to be able to 
exercise  an  activity  in  another  Member  State.  The  justification  of 
such  shareholding  rules  was  questioned  by  several  Member  States 
in the context of the mutual evaluation.  
Were  highlighted  during  the  mutual  evaluation  process  as an  issue 
creating  significant  problems  for  the  cross  border  provision  of 
services  in  sectors  such  as  business  services  or  construction. 
Limited reform progress took place. 
Were  also  shown  to  differ  significantly  across  Member  States.  In 
general  however  restrictions  on  multidisciplinary  activities  exist  in 
many  Member  States.  Following  implementation  of  the  Services 
Directive,  only  a  few  Member  States  abolished  or  relaxed  certain 
restrictions on multidisciplinary activities as they were found to be 
unjustified  or  disproportionate  (e.g.,  CY,  FR,  PL).  Nevertheless, 
significant restrictions on multidisciplinary activities persisted. The 
discussion  in  the  context  of  the  mutual  evaluation  confirmed  that 
such  requirements  severely  restrict  innovative  business  models. 
Some  Member  States  considered  that  authorisation  schemes  and 
rules of professional ethics are sufficient to ensure independence or 
impartiality  (any  violation  could  be  sanctioned  by  a  posteriori 
control). 
Most  Member  States  introduced  the  principle  of  tacit  approval  in 
their  horizontal  legislation  implementing  the  Services  Directive. 
However, in practice it has often had little effect on sector-specific 
rules  or  procedures,  which  still  require  an  express  decision  from 
competent authorities. 
Several  Member  State  laid  down  a  horizontal  general  rule  that 
requirements  applicable  to  established  providers  are,  in  principle, 
not  imposed  on  temporary  cross-border  service  providers  unless  a 
law  specifically  provides  for  their  application  to  cross-border 
services.  A  few  Member  States  have  relied  solely  on  varying 
degrees of amendment to existing (sector) legislation. Regarding the 
horizontal approach, the discussion showed that often there was still 
a lot of legal uncertainty for service providers as in many Member 
States  sector-specific  legislation  would  generally  prevail  over  the 
free movement clause introduced by the horizontal law. In practice 
this  means  that,  unless  sector-specific  legislation  is  expressly 
amended,  the  free  movement  clause  would  not  be  effective  and 
cross-border  service  providers  would,  in  principle,  have  to  comply 

114 

 
 
with the same requirements as providers wishing to establish. 

The mutual evaluation and 2012 report on the implementation of the Services Directive also 
made  clear  that  there  are  large  differences  in  implementation  progress  across  different 
services sectors. In some services sectors, relatively good progress was reported:  

  Retail. An important number of changes were made in the retail sector as a result of 
implementing the Services Directive, because some of the existing requirements were 
considered  discriminatory,  unjustified  or  disproportionate.  Some  authorisation 
schemes were abolished and many were modified. For example, some economic needs 
tests  were  abolished,  thresholds  for  the  application  of  authorisation  schemes  were 
raised, criteria were clarified and procedures were accelerated and simplified. 

  Tourism.  The  implementation  of  the  Services  Directive  resulted  in  a  considerable 
number  of  legislative  amendments,  the  most  significant  ones  being  those  affecting 
travel agencies and tourist guides. Many Member States have abolished requirements 
that  they  considered  unjustified  or  disproportionate.  Nevertheless,  difficulties  for 
service providers to exploit the internal market potential of this sector seem to remain. 
This seems to be the case, in particular, as regards the cross-border services provisions 
of travel agencies/travel agents and tourist guides. 

  Real  estate.  Many  of  the  rules  on  establishment  and  on  temporary  cross-border 

services were changed during implementation of the Services Directive. 

In other services sectors, little progress was reported: 

  Construction.  Both  the  mutual  evaluation  and  the  2012  report  showed  that  very 
different situations exist in different Member States as regards the level of regulation, 
the  type  of  regulatory  tools  in  force  and  the  categories  of  construction  activities 
regulated. Nevertheless, little reform progress was carried out since the introduction of 
the  Services  Directive  and  the  construction  sector  remained  heavily  regulated.  Most 
requirements  are  controlled  through  authorisation  schemes.  In  some  cases,  cross-
cutting  authorisation  schemes  affect  the  whole  construction  sector.  In  other  cases, 
authorisations  are  for  specific  activities,  such  as  supervision  and  inspection,  or 
activities  presenting  a  danger  to  the  environment.  Discussion  during  the  mutual 
evaluation  also  showed  that  service  providers  have  difficulty  obtaining  reasonably 
priced insurance cover for cross-border services. 

  Business services. Both the mutual evaluation and the 2012 report showed that there is 
a  large  divergence  within  the  business  services  sector.  Some  services  are  lightly 
regulated. Others are subject to stricter regulation. Also, for certain business services 
(mostly regulated professions) the level of regulation differs considerably between the 
Member States, from no/very light regulation to major restrictions to the freedom of 
establishment and to provide services. Implementation of the Services Directive led to 
certain  changes  but  overall  a  heavy  regulatory  environment  remained  across  certain 
services and many Member States. 

115 

 
 
 
 
Public consultation on the mutual evaluation (2010)157 

In the context of the mutual evaluation, the Commission also carried out a public consultation 
to  obtain  feedback  from  consumers,  businesses  and  any  other  interested  parties  as  to  their 
assessment of national measures implementing some specific parts of the Services Directive. 
The following stakeholder feedback was obtained through this consultation: 

  A  significant  number  of  respondents  considered  that  several  Member  States  did  not 
proceed  to  a  proper  proportionality  analysis  when  deciding  to  maintain  certain 
authorisation  schemes.  In  general,  several  respondents  considered  that  too  many 
different licences exist, sometimes for rather simple activities (e.g. in the construction 
sector); 

  Respondents  considered  that  several  requirements  covered  by  Article  15  of  the 
Directive have been maintained without being justified or proportionate. For example, 
legal  form  and  shareholding  requirements  were  reflected  by  a  number  of  replies  as 
being serious obstacles to freedom of establishment; 

  Some respondents expressed general concerns over the correct implementation of the 
Services  Directive  in  respect  of  cross-border  provision  of  services  (Art.  16).  Many 
replies raised specific examples of  requirements applicable to  cross-border  provision 
of services which are perceived by the respondents as unjustified or disproportionate; 
Insurance  obligations  were  mentioned  by  several  replies  as  obstacles  to  cross-border 
provision of services. The respondents considered that insurance can be very costly or 
impossible to obtain by service providers from other Member States; 

 

  Some respondents highlighted problems outside the scope of the Services Directive as 
well. Declarations that cross-border service providers need to submit, were raised by 
several  respondents  as  being  a  serious  obstacle.  In  general,  professional  associations 
and  chambers  of  commerce  mentioned  declarations  and  other  formalities  required in 
respect of posting of workers as a difficulty. Comments which were often linked with 
a call for further administrative simplification in general. 

Economic impact of the Services Directive until end-2011 (2012)158 

In  2012, the Commission carried out  a study to  assess the economic impact of the Services 
Directive taking into account the way it had been implemented across Member States until the 
end  of  2011.  This  was  a  significant  step  forward  compared  to  previous  studies  which 
estimated  theoretical  impacts  of  the  Directive  assuming  a  homogeneous  implementation 
across countries and sectors (sometimes full elimination of barriers), while the reality showed 
a  considerable  heterogeneity  in  the  degree  of  implementation  across  countries.  The  study 
estimated the economic effects of the reduction or elimination of a number of obstacles across 
15 services sectors and all Member States. It concluded that: 

  The estimated impact of the actual implementation of the Services Directive from its 
introduction until end-2011 on GDP is a 0.8% increase at EU level (to materialise over 

157 http://ec.europa.eu/DocsRoom/documents/9975  
158 http://ec.europa.eu/economy_finance/publications/economic_paper/2012/ecp456_en.htm  

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5  to  10  years),  with  a  dispersion  across  countries  whose  GDP  impact  ranges  from 
below  0.3%  to  more  than  1.5%.  In  addition,  trade  and  FDI  flows  in  services  sectors 
will increase as a result of barrier reduction (7% for trade and 4% for FDI, both at EU 
level); 

  Additional  gains  could  be  reaped,  still  within  the  scope  of  the  Directive,  if  Member 
States  would reduce  their remaining sectoral  barriers to  the average level of sectoral 
barriers in the EU. Under this not very demanding scenario the EU-level GDP effect 
would amount to a 1.2% increase in total (i.e. additional 0.4 percentage points of GDP 
relative to the impact of already achieved barrier reduction); 

  A  more  ambitious  effort  under  which  Member  States  move  towards  the  level  of 
restrictions of the five best countries per sector159 would bring additional gains of up 
to 1.8% of GDP (on top of the 0.8%). 

Considering  this  significant  untapped  growth  potential,  the  Commission,  the  European 
Parliament  and  the  Council  in  2012  all  called  for  a  more  ambitious  implementation  of  the 
Services Directive. 

5.2 Implementation since 2012 
Staff  working  document  to  the  Single  Market  Strategy  (2015)160  and  Economic  impact  of 
the Services Directive from 2012 to 2014 (2015)161 

In  2015,  the  Commission  carried  out  an  update  of  the  above  2012  study  on  the  economic 
impact  of  the  Services  Directive  to  estimate  how  much  of  the  remaining  potential  for  GDP 
growth (1.8%) has been realised by Member State reforms over the period 2012-2014.  

It was found that reform effort across Member States during this period has been uneven, with 
reforms  mainly  having  taken  place  in  Member  States  subject  to  financial  assistance 
programmes  or  implementing  comprehensive  national  reform  programmes.  The  three 
Member States where most services barriers have been abolished or partially reduced over the 
period 2012-2014 are Greece, Italy and Portugal. Beyond those countries, only few Member 
States have made important reform progress. Several Member States have not undertaken any 
reforms to abolish or reduce regulatory barriers in the services sectors covered by the Services 
Directive  over  the  period  2012-2014.  This  is  despite  the  fact  that  some  of  them  received 
Country-Specific  Recommendations  adopted  by  the  EU  Council  under  the  European 
Semester.162 In some isolated cases, previously achieved reforms have even been reversed.  

The  limited  reform  progress  in  2012-2014  can  in  some  cases  be  explained  by  the  fact  that 
previous  reforms  already  led  to  lighter  regulatory  regimes,  leaving  less  scope  for  further 
reforms in some cases. This is for example the case in countries such as the UK, Sweden or 
the Netherlands. In other cases, however, there has been little reform progress despite the fact 

159 This scenario is close to the full elimination of barriers across most sectors. 
160 http://ec.europa.eu/DocsRoom/documents/14012?locale=nl  
161 http://ec.europa.eu/DocsRoom/documents/13327/attachments/1/translations/en/renditions/native  
162 Country-Specific Recommendations covering services reforms have been issued in 2012-2014 to: Austria, 
Belgium, the Czech Republic, Denmark, Finland, France, Germany, Hungary, Italy, Poland, Slovenia, and 
Spain. 

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that important barriers continue to exist. This is notably the case for Member States to whom 
services reforms have been recommended by the EU Council under the European Semester. 

With  only  limited  additional  national  reform  efforts  in  2012-2014,  the  economic  effects  of 
these changes are bound to be limited. Only 0.1% out of the 1.8% EU GDP growth potential 
that  the  Commission  estimated  in  2012  is  estimated  to  have  been  realised  over  the  period 
2012-2014. As a result, 1.7% of EU GDP growth potential remains unexploited to date.  

Stakeholder workshops and consultation (2014) 

In  cooperation  with  the  Member  States,  the  Commission  in  2014  organised  9  workshops 
across Europe to hear from stakeholders the barriers they faced in the services Single Market. 
Over  300  business  and  business  organisations  participated  in  the  events.  In  addition,  the 
Commission  conducted  two  questionnaires  on  barriers  to  the  Single  Market  in  services. 
Together  293  answers  were  submitted  by  stakeholders,  mostly  SMEs  (81%).  The  feedback 
obtained  from  service  providers  participating  in  the  survey  confirms  that  many  obstacles 
remain for services providers, for example:  

  79%  companies  have  encountered  problems  with  registration,  authorisations  and 
licenses  when  providing  cross-border  services  (temporarily  or  through  secondary 
establishment).  As  such,  requirements  can  be  complicated,  lengthy  and  costly  to 
comply  with,  deterring  service  providers  from  going  cross-border  and  forming  an 
obstacle to greater cross-border trade and investment, particularly by SME. 

  More than 30 % of companies providing services cross-border which responded to the 
Commission  questionnaire  reported  that  existing  rules  on  the  posting  of  workers 
constituted  a  barrier.  The  problems  related  to  posting  of  workers  were  raised 
principally  by  companies  active  in  the  construction  sector,  but  also  frequently  by 
business  services  companies.  Stakeholders  reported  burdensome  administrative 
requirements  for  the  posted  workers  related  to  the  necessary  paperwork,  registration 
obligations and fees charged in the context of these procedures.  

  The  requirement  to  purchase  a  particular  type  of  insurance  created  problems  for 
companies.  In  some  cases,  multiple  insurance  policies  were  required,  causing 
administrative difficulties and high costs. Companies reported difficulties with the fact 
that  different  Member  States  required  different  types  of  professional  indemnity 
insurance, and in some cases the required insurance presented a very high cost or was 
difficult  to  obtain.  Some  professionals  found  it  difficult  to  have  their  existing 
insurance recognised by the authorities in other countries; 

  The variation of legal form and shareholding requirements across Member States was 

considered to be a barrier, both to cross-border provision and to establishment. 

5.3 More detailed evidence on remaining obstacles today 
The  above  shows  that  the  Services  Directive  has  been  successful  in  removing  certain 
(regulatory) obstacles, mostly during the period 2009 to end-2011. At the same time, there are 
a  number  of  important  sectors  (mainly  business  services  and  construction)  as  well  as 
provisions  of  the  Services  Directive  where  implementation  has  been  lacking.  Over  the  last 
years, the Commission reviewed these sectors and obstacles in a more detailed way. 

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Business services – Study on the economic impact of barriers in business services (2015)163 
and peer review on legal form and shareholding requirements (2013)164  

One  of  the  sectors  where  many  obstacles  to  cross  border  activities  still  remain  is  business 
services. The Commission carried out an analysis in 2015 to understand the economic impact 
of  remaining  obstacles  in  4  key  business  services  sectors  (accountants,  architects,  engineers 
and lawyers). This analysis drew the following conclusions: 

  Despite  the  introduction  of  the  Services  Directive,  the  level  of  barriers  in  these  4 
sectors  still  varies  greatly  between  Member  States  and  sectors.  Barriers  in  the  least 
restrictive Member State amount to merely 7% of the barriers in the most restrictive 
Member  State.  The  differences  are  of  similar  magnitude  within  the  sector  assessed, 
with the exception of the legal profession which faces significant barriers in almost all 
Member States. 

  Member States with more restrictive barrier levels have on average a lower number of 
new service providers entering their markets in each of the four sectors analysed. 
  Member  States  with  more  restrictive  barriers  have  on  average  higher  profit  rates  in 

each of the four business services sectors analysed. 

  Member  States  with  higher  barrier  levels  have  a  less  efficient  flow  of  resources  to 
their most productive use, which has a negative impact on overall productivity in these 
sectors. 

In  short,  the  analysis  undertaken  confirmed  that  reducing  barrier  levels  in  the  four  services 
sectors assessed would generate more intensive competition as a result of more firms entering 
the market. It would also lead to benefits for consumers in terms of lower prices as a result of 
reduced  profit  rates.  Finally,  the  analysis  confirmed  that  lower  barriers  would  lead  to  more 
performant sectors characterised by a stronger allocative efficiency. 

Barriers which have been shown since the start of the Services Directive implementation to be 
particularly  important  for  business  services  are  legal  form  or  shareholding  requirements.  In 
this context Member States took place in a peer review in 2013 specifically to discuss these 
requirements. A number of conclusions were drawn from this analysis, including: 

  A  large  group  of  Member  States  imposes  such  requirements  on  service  providers. 
Since the adoption of the Services Directive, limited reforms in this area took place. A 
few  Member  States  abolished  their  legal  form  or  shareholding  requirements.  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.   

  The peer review discussions showed that it is often unclear how precisely legal form 
and  shareholding  requirements  are  necessary  to  meet  the  stated  public  interest 
objectives.  Some  Member  States  impose  none  of  these  restrictions,  be  it  that  they 

163 http://ec.europa.eu/DocsRoom/documents/13328/attachments/1/translations/en/renditions/native  
164 http://ec.europa.eu/DocsRoom/documents/14964/attachments/1/translations/en/renditions/native  

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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.  

  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.  

Construction - Simplification and mutual recognition in the construction sector under the 
Services Directive (2015)165 

Another  sector  where  many  obstacles  to  cross  border  activities  still  remain  is  construction 
services. The Commission carried out an in-depth mapping in 2015 to understand remaining 
obstacles in this sector. The main objective of this study was to determine whether Member 
States  make  full  use  of  the  principles  of  administrative  and  regulatory  simplification, 
including  by  way  of  mutual  recognition,  as  part  of  their  relevant  authorisation  schemes  for 
construction service providers. This analysis drew the following conclusions: 

  There is considerable room for simplification of procedures imposed on cross-border 
service providers of construction services, in terms of establishment and those offering 
temporary cross border services. 

  Horizontal  authorisation  schemes  (where  they  exist)  have  little  or  no  impact  in 
simplifying subsequent building control procedures and operate as barriers to service 
provision. 

  Building permits are also in need of considerable simplification. They apply unevenly 
to categories of works across Member States. Declarations and self-certifications are 
generally not  used by building permit procedures.  Non-site specific issues are often 
controlled  repeatedly  for  each  building  project.  Alternative  procedures  and  the 
exemptions available should be expanded upon to cover a greater variety of works. 
  A  common  element  for  both  horizontal  authorisation  schemes  and  building  permits 
seems  to  be  the  lack  of  clear  mutual  recognition  principles  and  procedures.  For 
example, a cross-border service provider is forced to restructure its approach to service 
provision  when  going  cross-border,  even  temporarily.  Or  it  must  adapt  to  new 
requirements,  in  view  of  technical  and  professional  capacity  requirements,  and 
associated certifications, that are imposed whilst disregarding arrangements previously 
complied  with  in  a  home  Member  State,  often  to  comply  with  similar  requirements 
there.  Health  and  safety  service  structures  have  to  be  set  up  irrespective  of  home 
Member State facilities and resources. Technical standards which are not performance 
based  may  be  more  difficult  to  comply  with  and  may  require  the  advisory  inputs  of 
local professionals. Insurance coverage needs to be purchased locally, on top of every 
other previously acquired across Member States. 

165 
databases/newsroom/cf/itemdetail.cfm?item_id=8657&lang=en&title=Study%3A-Simplification-and-mutual-
recognition-in-the-construction-sector-under-the-Services-Directive  

http://ec.europa.eu/growth/tools-

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  From  an  administrative  burden  perspective  regarding  both  horizontal  authorisation 
schemes  and  building  permits,  a  number  of  issues  have  been  identified  such  as:  e-
procedures are only partially adopted; evidentiary requirements are too stringent, with 
little  room  for  simple  declarations  and  self-certifications;  certified  and  authenticated 
copies are still required, and sometimes need to be produced in the host Member State; 
in  some  cases,  fees  are  disproportionate  to  costs;  and  tacit  approval  is  not  a  widely 
adopted practice, even for horizontal authorisation schemes and building permits not 
controlling zoning aspects. 

Insurance  –  Staff  working  document  on  access  to  insurance  for  services  provided  in 
another Member State (2014)166 and public consultation on insurance (2013) 

Since  the  introduction  of  the  Services  Directive,  stakeholders  have  indicated  that  access  to 
insurance continues to be an important obstacle to cross-border activities. In this context, the 
Commission undertook an in-depth analysis of insurance requirements and their consequences 
in  2014.  In  addition,  in  2013,  the  Commission  services  also  engaged  with  stakeholders 
through a public consultation to better understand whether the market itself offers sufficient 
solutions to make the Services Directive work in practice in respect of insurance obligations. 
The following conclusions were drawn from these analyses: 

  Many  SMEs  and  professionals  continue  to  find  it  hard  to  obtain  insurance  cover  for 

more than their country of establishment; 

  Member  States  take  a  very  heterogeneous  approach  as  regards  insurance  obligations 

 

and access to insurance for provision of services; 
It  seems  that  Member  States  have,  in  many  instances,  simply  carried  over  the 
insurance  requirements  they  had  in  place  before  the  Directive  entered  into  force, 
without sufficiently assessing them in the light of the conditions set by Article 23(1) of 
the Services Directive; 

  The  Services  Directive  foresees  an  equivalence  rule  for  insurance  policies  issued  in 
other  Member  States  (as  per  Article  23(2)  of  the  Services  Directive).  Nevertheless, 
while this rule as such was transposed in national law, in most cases Member States 
did  not  offer  practical  tools  for  ensuring  that  such  equivalence  could  work  in  daily 
cross-border context. Thus, no approach exists on the comparability and equivalence 
assessment of insurance cover from other Member States, 

  The  insurance  market  focuses  on  domestic  needs  and  solutions  are  only  available 
where  there  are  economies  of  scale  for  major  companies  as  regards  their  needs  for 
global insurance cover; 

  There  is  a  need  for  more  systematic,  comparable  and  consistent  information  on  the 
insurance  obligations  imposed  by  Member  States  in  the  ambit  of  the  Services 
Directive; 
Insurance  policies  are  not  always  sufficiently  clear  as  regards  potential  geographical 
restrictions of the insurance cover in order to enable service providers to communicate 
this to their clients. 

 

166 http://ec.europa.eu/DocsRoom/documents/15037/attachments/1/translations/en/renditions/native  

121 

 
 
                                                 
Administrative  simplification  –  The  Performance  of  the  Points  of  Single  Contact:  an 
assessment against the PSC Charter (2015)167 

A recent assessment of the performance of the Points of Single Contact in the 28 EU Member 
States  showed  that  while  some  progress  was  made,  performance  is  still  mediocre  with 
considerable room for improvement. In general and across Member States, PSC performance 
is clearly the weakest when it comes to offering information and e-procedures to cross-border 
users.  The  assessment  showed  that  companies  that  want  to  go  cross-border  face  important 
linguistic  and  technical  problems  in  completing  administrative  requirements  online.  Often 
only  rudimentary  information  is  provided  in  English  or  other  foreign  languages  and  online 
forms are merely available in local languages. Only the general business registration can be 
done  fully  online  in  more  than  50%  of  the  PSCs.  For  the  more  specific  requirements 
(including  sector  specific  requirements),  greater  in  number  and  complexity,  the  PSCs  still 
often only offer general information about the procedure or no information at all and few or 
no e-procedures. 

Administrative cooperation 

The  Commission  regularly  publishes  statistics  on  the  number  of  information  exchanges 
between  Member  States  in  the  area  of  the  Services  Directive.168  These  statistics  show  the 
following trends: 

  There  is  currently  very  little  exchange  of  information  between  different  Member 
States  in  the  area  of  the  Services  Directive.  There  is,  for  example,  much  more 
exchange  of  information  between  Member  States  in  other  areas  such  as  posting  of 
workers or professional qualifications. In addition, whereas in the areas of professional 
qualifications  or  posting  there  is  a  positive  evolution  over  time  in  the  amount  of 
information exchange (indicative of Member States developing more regular contacts) 
the activity levels regarding the Services Directive remain surprisingly stable; 
In  addition,  the  use  of  the  IMI  system  for  exchange  of  information  on  incoming 
service  providers  is  very  uneven  across  Member  States.  In  fact,  during  2015,  22 
Member  States  requested  less  than  10  times  other  Member  States  to  supply 
information  on  an  incoming  service  provider. 8  Member  States  even  did  not  request 
any information at all. A similar picture can be seen for the year 2014.   

 

As  a  result,  the  objectives  of  the  system  of  administrative  cooperation  as  set  out  in  the 
Services  Directive  are  not  being  met.  There  is  currently  little  exchange  of  information 
between Member States regarding cross-border service providers. In the long run, more day-
to-day  cooperation  between  Member  States  would  contribute  to  enhancing  trust  in  each 
other's regulatory and supervision systems. The current lack of information exchange shows 
that Member States are not interested in knowing the situation of the service provider in its 
home Member State or other information that can be provided by the competent authority in 

167 http://ec.europa.eu/growth/tools-databases/newsroom/cf/itemdetail.cfm?item_id=8342  
168 http://ec.europa.eu/internal_market/imi-net/statistics/index_en.htm   

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the  home  Member  State,  such  as  applicable  rules  there.  Exchanges  to  prepare  joint 
supervisions in a cross-border context have been practically non-existent.  

6. Evaluation of the Services Directive functioning 
This section will provide answers to the different evaluation questions highlighted in section 3 
on the basis of the evidence described above. 

Effectiveness 

1. 
How  effective  have  the  different  provisions  of  the  Services  Directive  related  to 
freedom to provide services and freedom of establishment been in order to remove regulatory 
obstacles for service providers that want to go cross border? 

The  above  shows  that  the  Services  Directive  has  so  far  been  only  partially  able  to  remove 
certain  regulatory  obstacles.  Particularly  important  regulatory  obstacles  where  so  far  little 
progress has been achieved are: 

  Authorisation  schemes  (Art.  9):  despite  a  considerable  reduction  in  the  number  of 
authorisation  and  registration  requirements  following  the  entry  into  force  of  the 
Services  Directive,  numerous  requirements  remain  in  place  across  many  Member 
States. Several Member States impose authorisation schemes on companies who wish 
to  open  a  secondary  establishment  or  to  provide  temporary  cross-border  services. 
These  authorisation  schemes  are  often  disproportionately  burdensome  and  largely 
repetitive for companies incorporated elsewhere; 

  Restrictions on companies as regards their legal form, their shareholding structure, the 
allocation of voting rights, management positions and multidisciplinary activities (Art. 
15 and 25): these are still present in a large range of Member States, in particular in 
some business services sectors. Although some of these rules are meant to protect the 
independence  of  the  professionals,  these  requirements  are  serious  obstacles  for  the 
establishment  of  service  providers  from  other  Member  States,  because  such 
restrictions might oblige them to change their legal form, structure or business model.  
  Insurance  requirements  (Art.  23):  professional  indemnity  insurance  as  compulsory 
insurance aims to cover risks related to professional liability of service providers and 
thus  to  function  as  a  guarantee  towards  clients  for  the  quality  of  services  covered. 
Nevertheless, such insurance may become an impediment to the proper functioning of 
the Single Market in services, both as regards secondary establishment and temporary 
cross-border  services.  Particular  problem  remain  unaddressed  in  relation  to  lack  of 
equivalence  assessments  by  host  Member  States,  lack  of  transparency  regarding 
insurance coverage and disproportionate costs for service providers going cross-border 
to obtain the required insurance coverage; 

  Mutual  recognition  (Art.  10(3)):  Transposition  of  the  Services  Directive  brought  the 
general  principle  of  mutual  recognition  to  home  Member  States  internal  law. 
However,  sector-specific  rules  to  implement  the  principle  have  remained  scarce  in 

123 

 
 
legislative  terms  across  practically  all  Member  States,  as  has  administrative 
implementation; 

  Freedom to provide (temporary cross-border) services clause (Art. 16): there is still a 
lot of legal uncertainty for service providers as to which rules apply when they provide 
services cross-border on a temporary basis.  

The  above  is  also  confirmed  by  a  2016  report  of  the  European  Court  of  Auditors169  which 
the 
important  regulatory  obstacles  are  still 
highlighted 
implementation of the Services Directive has only been partially effective so far.   

in  place  and  overall 

that 

2. 
Has  there  been  a  uniform  implementation  of  the  Services  Directive  (regarding  the 
removal of regulatory obstacles) across sectors, Member States and time? What are the factors 
that are influencing the implementation of the Services directive? 

A  significant  number  of  reforms  took  place  in  the  first  years  of  implementation  which  has 
resulted in the removal of an important amount of obstacles. This has happened across most 
Member States. Nevertheless, in the last years reform progress has slowed down. Since 2012, 
reform effort across Member States has been uneven, with reforms mainly having taken place 
in Member States subject to financial assistance programmes or implementing comprehensive 
national  reform  programmes.  Several  Member  States  have  not  undertaken  any  or  very  little 
reforms to abolish or reduce regulatory barriers in the services sectors covered by the Services 
Directive over the period 2012-2014.  

Significant  progress  has  been  achieved  in  some  services  sectors  (e.g.  tourism  services). 
However,  there  are  some  key  services  sectors  (such  as  business  services  and  construction) 
where a number of important regulatory barriers remain.170 This has been confirmed also by 
the  public  consultation  carried  out  in  the  context  of  this  impact  assessment.  Regarding 
business  services,  more  than  60%  of  respondents  consider  regulatory  obstacles  as  still 
important today. For example, more than 40% consider legal form requirements as an obstacle 
and about 30% consider shareholding restrictions as a barrier to cross-border activities.  

includes,  for  example, 

In view of these remaining regulatory obstacles the Commission has been pursuing an active 
enforcement policy including in the most recent years. For example, about 40 EU pilots have 
been launched in relation to compliance issues with Art. 14, 15, 16 and 25 of the Directive. 
This 
the  recent  enforcement  action  against  unjustified  or 
disproportionate legal  form, shareholding,  management and multidisciplinary  restrictions. In 
addition,  the  Commission  also  issued  over  several  years  country  specific  recommendations 
related to these issues. These were however not implemented by Member States or only to a 
limited extent.    

This lack of progress in Member States' reforms to remove or reduce barriers in these sectors 
can be explained by a number of elements. In general, the current situation is characterised by 
a lack of common trust, as a result of which Member States continue to impose their domestic 

169 Special report No 5/2016, "Has the Commission ensured effective implementation of the Services Directive?" 
170  These  priorities  were  also  highlighted  in  the  2014  work  plan  for  reporting  on  national  reforms  in  services 
markets (http://ec.europa.eu/DocsRoom/documents/15036/attachments/1/translations/en/renditions/native)  

124 

 
 
                                                 
requirements  on  incoming  service  providers  with  little  or  no  regard  to  the  regulatory 
framework  already  imposed  on  the  service  provider  in  their  home  country.  In  addition, 
business services and construction are typically sectors where there are strong vested interests 
often defending a status quo of the current rules.  

3. 
How well have the other provisions of the Services Directive related to administrative 
simplification  and  administrative  cooperation  been  put  in  practice  by  Member  States  and 
how/to  what  extent  do  they  contribute  to  reaching  the  objectives  set  by  the  Services 
Directive? 

In  general,  both  provisions  can  only  be  considered  as  implemented  by  Member  States  to  a 
limited  extent.  First,  implementation  progress  of  the  different  provisions  related  to 
administrative simplification has in several cases been limited. Performance of the PSCs in 
many Member States is still weak as they do not offer adequate solutions for service providers 
going  cross-border.  In  general,  the  provisions  of  the  Services  Directive  related  to 
administrative  simplification  set  general  principles  but  are  however  not  enforceable  by  the 
Commission when it comes to achieving administrative simplification in individual cases. 

In practice, service providers still face significant administrative burden when going abroad: 

  Service providers often need to complete an extensive number of different procedures 
when  going  cross-border.  The  service  provider  needs  to  contact  these  authorities 
separately often leading to re-submission of the same information.   

  To provide services in other territories service providers often have to submit a range 
of  supporting  documents.  Often  these  documents  are  not  in  the  possession  of  the 
service  provider  and  need  to  be  requested  from  different  authorities  in  its  home 
Member States; 

  Sector  specific  procedures  can  in  most  cases  not  be  completed  electronically.  They 
often still require a physical visit to an office or sending forms by post, for example to 
the professional chamber involved; 

  For many procedures that service providers face when going cross-border it is unclear 
by when they will receive a decision (positive or negative) regarding their application 
for an authorisation. 

These obstacles of an administrative nature are in practice dissuading service providers from 
going  cross-border.  This  has  been  confirmed  by  the  public  consultation  carried  out  in  the 
context  of  this  impact  assessment.  Regarding  business  services  as  well  as  construction 
services,  more  than  60%  of  respondents  consider  administrative  barriers  as  an  important 
challenge when going cross-border.171  

171  For  example,  regarding  business  services  the  lack  of  electronic  options  to  complete  procedures  in  the  host 
Member  State  is  seen  as  an  obstacle  by  almost  1  out  of  3  respondents,  as  well  as  the  need  to  contact  several 
authorities separately in the host Member State, identified by nearly 40%. Translation requirements are seen an 
obstacle  for  1  out of  3  respondents.  Regarding  construction,  almost  60%  of  respondents  indicated  the  need  to 
contact  several  authorities  as  another  important  problem  and  more  than  40%  highlighted  the  length  and 
complexity of the procedures as problematic.  

125 

 
 
                                                 
Second, regarding administrative cooperation the Services Directive obliges Member States 
to assist each other and to exchange information whenever this is necessary to ensure a proper 
enforcement of applicable rules. In addition, the Internal Market Information (IMI) to allow 
for  such  cooperation  has  been  set  up  and  is  managed  and  funded  by  the  Commission.  In 
practice  however,  Member  States  are  not  using  these  possibilities.  They  are  seemingly  not 
interested in knowing the situation of the service provider in its home Member State or other 
information  that  can  be  provided  by  the  competent  authority  in  the  home  Member  State. 
Therefore, the objectives of the system of administrative cooperation as set out in the Services 
Directive are not being met. This despite of the fact that most public authorities replying to 
the public consultation highlighted that they find the IMI system efficient to use. .   

In  March  2014172,  the  Commission  highlighted  this  problem  publicly  and  subsequently 
reminded  Member  States  of  the  issue  in  the  expert  group  on  the  implementation  of  the 
Services  Directive.  No  change  has  however  been  seen  since.  This  issue  is  also  clearly 
emphasized  by  stakeholders  who  responded  to  the  public  consultation.  55%  of  respondents 
active  in  business  services  indicated  that  ensuring  close  cooperation  between  the  home  and 
host Member State should be addressed; 61% of them active in construction services indicated 
so as well. 

Limited progress related to the provisions on administrative simplification and administrative 
cooperation has also been highlighted by the European Court of Auditors.173 

Overall,  how  effective  has  the  Services  Directive  been  in  generating  increased  GDP 

4. 
growth for the overall EU economy? 

Over  the  first  years  of  implementation,  the  Services  Directive  has  been  shown  to  generate 
additional trade, cross-border investment and GDP growth. The estimated impact of the actual 
implementation  of  the  Services  Directive  until  end-2011  on  GDP  is  a  0.8%  increase  at  EU 
level. Nevertheless, only 0.1% of additional growth has been captured over the period 2012-
2014 due to the slower reform progress by Member States highlighted above. 

1.7% of EU GDP growth potential remains unexploited to date. In general, the provisions and 
sectors where the least amount of progress has been achieved have remained unchanged since 
end-2011  until  today.  This  conclusion  of  unexploited  potential  of  the  Services  Directive  is 
also confirmed by external research carried out by for example the IMF174 or the EP175.  

Efficiency 

5. 

To what extent are the costs proportionate to the benefits achieved? 

The  Services  Directive  does  not  generate  any  direct  costs  for  service  providers.  It  does 
however  generate  some  costs  for  public  authorities.  This  mostly  relates  to  setting  up  and 
managing  the  points  of  single  contact  and  to  a  lesser  extent  the  system  of  administrative 

172 See Commission Staff Working Document (SWD (2014) 131 final, page 6 
173 Special report No 5/2016, "Has the Commission ensured effective implementation of the Services Directive?"  
174 https://www.imf.org/external/pubs/ft/wp/2014/wp14113.pdf 
175 http://www.europarl.europa.eu/EPRS/EPRS_STUDY_536354_CoNE_Single_Market_II.pdf 

126 

 
 
                                                 
cooperation.  There  are  no  details  available  on  the  costs  that  Member  States  have  incurred 
related to these provisions. At the same time, both the PSCs and the system of administrative 
cooperation  are  only  partially  functioning  today  as  highlighted  above.  Therefore,  these 
provisions can be considered as partially efficient at best.    

Coherence 

Can the Services Directive be considered as (still) coherent with other EU instruments 

6. 
and policies? Is it coherent internally? 

To what extent is the intervention coherent with other interventions with similar objectives? 

There are other interventions which also aim to enhance free movement of services. The one 
most  closely  related  to  the  Services  Directive  is  the  2005  Professional  Qualifications 
Directive176 (PQD, amended in 2013) which regulates the mutual recognition of professional 
qualifications.  

The PQD applies to all Member State nationals wishing to practise a regulated profession, on 
either a self-employed or employed basis, in a Member State other than the one in which they 
obtained  their  professional  qualifications.  While  the  PQD  covers  the  recognition  of 
professional  qualifications  and  other  closely  linked  requirements  under  national  legislation 
restricting access to a profession, the Services Directive deals with questions other than those 
insurance, 
relating 
structure 
multidisciplinary 
requirements, etc.).  

to  professional  qualifications  (for  example  professional 

liability 
corporate 

simplification, 

administrative 

activities 

and 

The  Directives  cross-refer  one  to  each  other  in  several  instances.  Consistency  in  the 
definitions  is,  for  example,  ensured  through  specific  cross-references  to  PQD  definitions 
within the Services Directive such as the definition of a regulated profession.  

In  addition, initiatives have  been  undertaken to better align both  instruments. These  include 
the  2011  evaluation  of  the  2005  PQD  Directive  which  identified  several  areas  where  the 
coherence and interaction between both Directives could be enhanced. For example, it noted 
that the obligations for Member States to exchange information had to be reinforced similarly 
to the alert system existing under the Services Directive. Also, it highlighted that the points of 
single contact established under the Services Directive should be used for the purposes of the 
PQD. Such changes have been introduced in the amended PQD Directive, which, for instance, 
requires  Member  States  to  ensure  that  certain  information  is  available  online  and  regularly 
updated  through  the  points  of  single  contact  and  that  all  requirements,  procedures  and 
formalities relating to matters covered by the PQD may be easily completed, remotely and by 
electronic means. 

176 2005/36/EC (PQD) 

127 

 
 
 
                                                 
Overall, both Directives can be considered to complement each other whilst covering different 
aspects  of  the  free  movement  of  professionals.  Stakeholders177  also  do  not  point  to  major 
inconsistencies  among  the  objectives  of  both  instruments.  The  performance  checks  done  by 
the  Commission  in  2011  came  to  a  similar  conclusion.    The  obstacles  that  exist  today  in 
relation to the Services Directive and the PQD (affecting free movement of services) are not 
so  much  caused  by  of  a  lack  of  coherence  between  both  instruments  but  rather  by  an 
incomplete or incorrect implementation of the existing rules by Member States.  

To what extent is the intervention coherent with wider EU policy? 

One of the 10 political priorities put forward by the Juncker Commission is to enable a deeper 
and fairer Internal Market. This includes completing the internal market in services, making it 
a  launch  pad  for  our  companies  to  thrive  in  the  global  economy  while  at  the  same  time 
ensuring a fair internal market with less abuse or circumvention of rules.  Furthermore, one of 
the pillars of the Investment Plan for Europe consists in further reinforcing the Single Market 
by creating the optimal framework conditions for investment in Europe. 

The Single Market Strategy178 highlighted the fact that the Single Market needs to be revived 
and  modernised  in  a  way  that  improves  the  functioning  of  the  markets  for  products  and 
services and guarantees appropriate protection for people. It is made up of targeted actions in 
three  key  areas:  (1)  creating  opportunities  for  consumers,  professionals  and  businesses;  (2) 
encouraging and enabling the modernisation and innovation that Europe needs; (3) ensuring 
practical delivery that benefits consumers and businesses in their daily lives.  

A  better  implementation  of  the  Services  Directive  would  remove  remaining  obstacles  for 
service  providers,  creating  more  opportunities  for  professionals  and  business  to  go  abroad. 
The intervention remains therefore coherent with wider EU policy.   

Relevance 

7. 

Can the Services Directive be considered as (still) relevant?  

The original objectives of the different provisions of the Services Directive that are described 
in  section  1.2.2  were  to  increase  cross-border  trade  and  investment  in  the  services  sectors 
covered and overall to stimulate growth in the EU. The main problem drivers to cross-border 
integration  identified  during  the  initial  analysis  in  preparation  of  the  Services  Directive 
included  regulatory  obstacles,  administrative  burden  faced  by  service  providers  and  lack  of 
cooperation between national authorities.  

First, analysis shows that the reforms undertaken by Member States to implement the Services 
Directive  have  indeed  made  a  positive  contribution  to  trade,  investment  and  growth.  At  the 
same  time  there  is  also  evidence  showing  that  a  large  potential  for  growth  remains  to  be 

177 See for example evidence obtained in the context of the fitness check for construction services (final report 
forthcoming) 
178 http://ec.europa.eu/DocsRoom/documents?locale=en&tags=single-market-strategy-2015-communication  

128 

 
 
                                                 
exploited  (as  described  above).  This  is  particularly  relevant  in  those  services  sectors  where 
cross-border  trade  and  cross-border  investment  have  remained  low.  This  is  the  case  in 
important  sectors  such  as  several  business  services  as  well  as  the  construction  sector. 
Research  has  shown  that  more  integrated  markets  in  these  sectors  would  entail  important 
positive effects such as increased competitiveness and benefits for consumers. The objectives 
to increase cross-border trade and investment and stimulate growth remain therefore relevant 
today.  

Second, the problem drivers to cross-border integration identified during the initial analysis in 
preparation  of  the  Services  Directive  (including  regulatory  obstacles,  administrative  burden 
and lack of cooperation between national authorities) have also been addressed only partially 
by  Member  States'  implementation  of  the  Services  Directive.  Furthermore,  it  seems  that 
despite the remaining potential reforms by Member State to implement the Services Directive 
have slowed down recently. Service providers in several services sectors still complain about 
administrative  complexity  as  an  obstacles  when  going  cross-border.  This  concerns  not  only 
lack of information about applicable rules but also complexity of procedures and formalities, 
a lack of electronic procedures and unclear deadlines and multiple fees. In addition, although 
many  regulatory  obstacles  were  removed  in  the  first  years  after  the  introduction  of  the 
Services  Directive,  service  providers  still  face  a  number  of  stringent  regulatory  obstacles 
when going cross-border in particular in sectors such as business services and construction (as 
described  above).  Finally,  provisions  on  administrative  cooperation  between  Member  States 
are  currently  hardly  implemented  by  Member  States.  In  the  long  run,  more  day-to-day 
cooperation between Member States would contribute to enhancing trust in each other's legal 
and administrative systems. 

In  conclusion,  the  above  evidence  shows  that  the  different  provisions  of  the  Services 
Directive  still  offer  potential,  in  particular  in  services  sectors  such  as  business  services  and 
construction, provided measures to ensure a proper and ambitious implementation take place. 
The original objectives and identified problem drivers remain therefore relevant even though 
implementation process by Member States has been limited over recent years. 

EU Value added 

Can  the  Services  Directive  be  considered  as  (still)  having  added  value  compared  to 

8. 
what could be achieved by Member States at national level? 

The  original  aim  of  the  Services  Directive  was  to  eliminate  obstacles  to  the  freedom  of 
establishment for service providers and the free movement of services. The positive changes 
that  took  place  as  a  result  of  the  Services  Directive  were  described  in  the  effectiveness 
assessment  above.  There  is  sufficient  reason  to  believe  that  these  changes  would  not  have 
taken place without action at EU level. 

First, the Services Directive addresses issues which have a clear cross-border dimension. EU 
level action has created legal certainty for service providers going cross-border, who can now 
rely  on  the  existence  of  a  framework  governing  rules  on  cross-border  service  activities 

129 

 
 
throughout the Single Market, regardless of the Member States involved. Although Member 
States  continue  to  impose  divergent  requirements  on  service  providers  from  other  Member 
States,  this  fragmentation  would  have  been  more  severe  without  the  introduction  of  the 
common rules of the Services Directive. 

In  addition,  the  situation  before  the  introduction  of  the  Services  Directive179  showed  that  a 
large number of economically significant Internal Market barriers to services were not being 
addressed by Member States. Even though Member States had agreed to remove obstacles to 
free movement of services180, little progress was made in practice. In addition, in the absence 
of  agreement  on  a  common  and  co-ordinated  approach  at  EU  level  individual  action  by 
Member  States  would  have  been  likely  to  result  in  further  fragmentation  of  the  legal 
framework.  This  was  for  example  also  supported  by  the  Competitiveness  Council  of 
November  2002,  which  concluded  that  it  was  clear  that  unilateral  action  by  Member  States 
was unlikely to yield sufficient results by 2010. 

In conclusion, action at EU level has been creating clear added value given the cross-border 
nature of the issues being addressed, the resulting legal certainty for service providers and the 
ineffectiveness of individual Member States' actions. 

The  above  is  also  confirmed  by  stakeholder  feedback  obtained  through  the  public 
consultation.  In general, stakeholders confirm that policy action aimed at achieving a better 
implementation of the Services Directive still has important potential. For example, regarding 
administrative  barriers  respondents  considered  that  the  impact  of  policy  action  to  better 
implement  the  Services  Directive  would  be  positive,  especially  for  saving  costs  of  service 
providers  (70%),  increasing  cross-border  service  provision  (68%)  and  increasing  choice  for 
consumers (55%).  

7. Conclusions 

On  the  basis  of  the  analysis  presented  above,  the  following  conclusions  can  be  drawn  in 
relation to the assessed provisions of the Services Directive. 

The provisions of the Services Directive in scope of this evaluation can be considered to have 
been only partially effective until today. First, service providers in key services sectors (such 
as  business  services  and  construction)  still  face  an  important  number  of  regulatory  barriers 
(including  insurance  requirements).  This  is  mainly  due  to  incomplete  implementation  by 
Member States and the fact that over the last years reform progress has even slowed down. As 
a  result,  the  regulatory  environment  across  Member  States  is  still  highly  divergent  in  these 
sectors.181  Second,  service  providers  still  face  significant  administrative  burden  and  costs 
when  going  cross-border.182  Thirdly,  the  system  of  administrative  cooperation  between 

179 See for example the 2002 Commission report on "The State of the Internal Market for Services" 
180 For example at the 2000 Lisbon European Council 
181 See problem drivers 3 and 4 of the main impact assessment 
182 See problem driver 1 of the main impact assessment 

130 

 
 
                                                 
Member  States  is  currently  not  working  in  practice.183  Member  States  are  currently  not 
cooperating  when  it  comes  to  cross-border  service  providers.  The  current  situation  is 
characterised  by  a  lack  of  common  trust,  as  a  result  of  which  Member  States  continue  to 
impose their domestic requirements on service providers established in other Member States 
with little or no regard to the regulatory framework already imposed on the service provider in 
their home country. 

A  limited  number  of  provisions  in  scope  of  this  evaluation  required  direct  investments  by 
Member States (Points of Single Contact and administrative cooperation). There is no detailed 
data available on the costs that Member States incurred to implement these provisions. At the 
same  time,  performance  of  the  PSCs  leaves  much  room  for  improvement  and  very  little 
administrative cooperation between Member States has taken place over the last years. These 
provisions can  therefore be considered as  only partially  efficient at most.  The main  reason 
for this conclusion is lacking of implementation by Member States of the requirements to set 
up  fully  functioning  PSCs  and  ensure  active  administrative  cooperation  regarding  cross-
border service providers. 

There are no major coherence issues with other instruments aimed at improving the single 
market  for  services  (such  as  the  professional  qualifications  directive).  Internal  coherence  of 
Service Directive's provisions presents challenges, but they are surmountable through proper 
implementation.  In  addition,  the  Services  Directive  remains  coherent  today  with  wider  EU 
policy such as the Single Market Strategy. 

The  provisions  discussed  still  offer  important  potential,  in  particular  in  sectors  such  as 
business services and construction. The original objectives and identified problem drivers at 
the basis of the Services Directive are still relevant today. 

Finally,  the  Services  Directive  has  been  creating  clear  added  value  given  the  cross-border 
nature  of  the  issues  being  addressed  and  the  resulting  increased  legal  certainty  for  service 
providers.  

183 See problem driver 2 of the main impact assessment 

131 

 
 
 
                                                 
Annex – Services Directive intervention logic 

Needs 

Objectives 

Inputs 

Activities 

Internal market for services: removing obstacles to cross border service provision and establishment 

Simplification of 
administrative 
requirements 

Removing obstacles to 
establishment 

Removing obstacles to 
temporary cross 
border provision 

Fostering 
administrative 
cooperation 

Services Directive 

Art. 5 
Assessment of 
existing 
procedures and 
simplification 

Art. 6-8 
Electronic 
procedures and 
Points of single 
contact 

Art. 9-13 Rules 
on 
authorisation 
schemes 

Art. 14 
Prohibited 
requirements 

Art. 15 
Requirements 
to be evaluated 

Art. 16 
Freedom to 
provide services 

Art. 23 Mutual 
recognition of 
insurance 
coverage 

Art. 25 Limits to 
multidisciplinary 
restrictions 

Art. 28-38 
Administrative 
cooperation 

Outputs 

Elimination of 
unnecessary 
formalities 

Setting Points 
of Single 
Contact and 
online 
information 

Non-
discriminatory, 
justified and 
proportionate 
authorisation 
schemes 

e.g. rules 
based on 
nationality 
prohibited 

e.g. 
disproportiona
te 
requirements 
not allowed 

e.g. no 
authorisation 
scheme for 
temporary 
provision of 
services 

Insurance 
bought in one 
country 
accepted in 
others if 
equivalent 

One firm can 
provide 
different kinds 
of services 

Home and host 
Member States 
give each other 
mutual 
assistance 

Results 

Impacts 

Easier procedures and access to 
information 

Elimination of main obstacles to 
cross border establishment 

Elimination of main obstacles to 
temporary cross border provision 
of services 

Lower cost of 
engaging in cross 
border activities 

More firms 
provide service or 
establish across 
borders 

Increased service 
innovation 

Wider choice of 
service suppliers to 
businesses at 
competitive prices 

Wider choice of 
services  and products 
to consumers at 
competitive price 

Maintained client 
protection 

132 

 
 
 
 
 
 
 
Annex 5: Problem definition 

1. Additional evidence on "what is the problem?" 

  Surveys on export participation 

Different surveys have enquired about export participation of EU SMEs. For example, a 2014 
Commission  report184  based  on  a  large  survey  among  EU  SMEs  showed  that  export 
participation of service providers in general is much lower than that of manufacturers and that 
export participation differs significantly across different services sectors. Only 5% of SMEs 
providing construction services are estimated to participate in export activities, compared to 
33% across all sectors (and for example 19% in financial services, 36% in transport, 36% in 
wholesale trade and 52% in manufacturing). It also shows that 27% of SMEs in the business 
services participate in export without however making a further distinction between different 
business services sectors. 

National research shows similar results. For example, the 2016 UK Small Business Survey185 
showed that only 2% of UK SMEs providing construction services have sold services outside 
the  UK  over  the  last  12  months,  compared  to  for  example  38%  in  information  and 
communication  services  and  over  40%  in  manufacturing.  On  business  services  the  survey 
shows  significant  differences  between  individual  business  services  sectors.  For  example, 
export 
computer 
programming/consultancy (44%) is much higher than export participation in sectors such as 
architecture/engineering (27%).    

advertising/market 

participation 

research 

(50%) 

and 

in 

  Choice of expansion channels  

Several business services and the construction sector are currently characterised by levels of 
cross-border  trade  and  cross-border  investment  which  are  significantly  below  that  of  other 
services sectors. This shows that even though service providers in these sectors have different 
channels available to them for expanding their activities to other Member States none of them 
are used in practice or only to a limited extent 

the  case  for 

Historically, it has been assumed that for many services sectors more resource-intensive entry 
modes  such  as  Foreign  Direct  Investment  are  the  preferred  option  for  internationalisation 
given that service provision depends heavily on client interactions and customisation. This is 
particularly 
information  and 
communication technology have increasingly made different types of services more tradable 
across borders. While customer interaction can still be needed at some stages of the service 
delivery  process,  it  is  no  longer  required  for  others  (such  as  support  or  analysis  functions). 
Overall, for many services cross-border expansion is possible today also with less resource-
intensive entry modes.186 As a result, a service provider that wants to expand activities across 

information-intensive  services.  However, 

184 European Competitiveness Report, Drivers of SME internationalisation, 2014 
185 BIS, Longitudinal Small Business Survey Year 1 (2015): SME employers, 2016 
186 D. Ball, V. Lindsay, E. Rose, Rethinking the paradigm of service internationalisation: less resource-intensive 
market entry modes for information-intensive soft services, 2008 

133 

 
 
                                                 
borders  in  order  to  increase  and  diversify  its  sources  of  revenue  has  a  choice  of  different 
market entry modes ranging from exporting to establishing a permanent presence abroad. It is 
therefore  important  to  consider  both  trade  and  investment  as  possible  channels  for  cross-
border expansion when analysing levels of market integration. 

  Evolution labour productivity in services sectors 

Figure 1 shows the evolution of labour productivity for a number of large sectors of the EU 
economy since 2000. It is clear that most services sectors have achieved modest but positive 
productivity  growth,  even  though  being  outperformed  by  the  manufacturing  sector.  At  the 
same  time,  some  services  sectors  have  not  followed  this  trend,  with  no  or  even  negative 
productivity growth over the last 15 years. This is the case in particular for business services 
and construction. Given the economic size of both sectors (together they represent about 18% 
of EU GDP), this is an issue of concern.    

Figure 1 – Labour productivity growth (2000-2014, 2000 = 100) 

150
145
140
135
130
125
120
115
110
105
100
95
90
85
80

All economy

Manufacturing

Construction

Wholesale & retail

Transport

Financial services

Real estate activities

Business services

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

  Economic potential of further market integration 

Source: Eurostat 

There  is  strong  evidence  showing  that  fostering  the  completion  of  the  single  market  in 
services  facilitates  higher  productivity  growth.  Companies  that  go  cross-border  show  on 
average  higher  turnover  and  employment  growth  as  well  as  stronger  innovation  activity187. 
This benefits both home and host Member States. In addition, more cross-border competition 
increases pressure on incumbent service providers to innovate and become more productive 
in  order  to  differentiate  themselves  from  new  (foreign)  competitors.  This  includes  adapting 
their services to better respond to the consumer preferences on the market.  

In  general,  the  economic potential of a  more integrated single  market for services to  create 
growth and jobs has been highlighted in several studies and reports by the Commission, other 
EU  institutions,  researchers  and  Member  States188.  A  recent  Commission  study189  for 
example  showed  that  a  more  integrated  market  for  a  number  of  services  sectors  through  a 
better  implementation  of  the  Services  Directive  would  lead  to  1.7%  EU  GDP  growth.  It  is 

187 European Competitiveness Report, Drivers of SME internationalisation, 2014 
188  See  for  example  European Added  Value Unit,  The  Cost  of  Non-Europe  in  the Single  Market for  services, 
2014  
189 European Commission, Update of the 2012 study on the economic impact of the Services Directive, 2015 

134 

 
 
 
                                                 
striking that sectors such as business services and construction, where market integration is in 
general low, are also facing important challenges of competitiveness.    

  Spill-over effects to other sectors 

On  the  one  hand,  services  industries  are  customers  or  users  of  other  sectors'  inputs  – 
backward  linkages.  On  the  other  hand,  services  industries  also  serve  as  suppliers  or  inputs 
into the production process of other sectors – forward linkages. Industrial clients are a major 
source of income for several services sectors. The increasing forward and backward linkages 
are  part  of  the  trend  of  blurring  borders  between  services  and  manufacturing.  This  is  in 
particular the case  for business  services  which  constitute  key inputs into  the manufacturing 
sector which plays an important "carrier" role given that an important share of the value of 
manufacturing output produced embodies value added created in services. For example, the 
business services sector accounts for more than 12% of the value of manufactured exports in 
the EU190.  Several studies have also shown positive economic effects of reforms in business 
services  (such  as  architects,  engineers  and  accountants)  on  downstream  sectors  such  as  the 
manufacturing sector.191 In other words, the performance of industrial clients suffers if "their" 
service providers are not performing well.  

This interaction between business services and manufacturing is particularly important in the 
context of the evolution of both sectors in terms of economic importance and specialisation 
patterns192. Whereas the share of manufacturing in EU GDP declined in the last 20 years, the 
share  of  business  services  strongly  increased.  However,  some  Member  States  (such  as 
Germany,  Austria  and  Czech  Republic)  have  maintained  a  strong  orientation  towards 
manufacturing,  whereas  others  (such  as  the  UK  and  the  Netherlands)  have  increasingly 
specialised in service activities. In other words, a specialisation trend has been ongoing with 
the emergence of manufacturing and business services clusters. This indicates that the share 
of  imported  services  in  manufacturing  production  is  likely  to  become  more  important  and 
underlines the need for a proper functioning single market not only for goods but especially 
also for services.  

2. Additional evidence on the identified problem drivers 

  Other problem drivers not in scope of the initiative 

There  are  several  other  drivers  that  are  not  directly  in  scope  of  this  initiative  which 
potentially  influence  differences  in  market  integration  between  services  sectors  (although 
certain  synergies  could  be  explored).  Firstly,  there  are  a  number  of  regulatory  obstacles  to 
cross-border activities that will not be considered in the scope of this impact assessment. This 
includes for example regulatory disparities arising from different tax regimes, criminal law, 
competition  law,  general  company  law,  labour  and  social  security  laws  or  any  operational 
restrictions  that  service  providers  face  after  entering  the  market  (e.g.,  periodic  reporting 

190 OECD, Trade in Value Added 
191  See  for  example  IWP,  Services  Liberalisation  in  Germany  –  Overview  and  the  potential  of  deregulation, 
2015 
192 ECSIP, Study on the relation between industry and services in terms of productivity and value creation, 2014 

135 

 
 
                                                 
obligations,  rules  on  consumer  safety,  tariff  and  advertising  restrictions).  For  most  of  these 
issues, the Commission is already undertaking several initiatives to address them such as in 
the  area  of  tax/VAT  (including  in  the  context  of  e-commerce  such  as  the  VAT  MOSS 
initiative193) or different actions on company law that were announced also in the 2015 Single 
Market  Strategy.  For  others,  such  as  criminal  and  competition  law,  impact  is  focused  on 
particular  services  sectors  (with  money  laundering,  financing  of  terrorism  or  human 
trafficking  implications)  or  particular  types  of  service  providers  (larger  companies  with 
dominant  positions  in  the  market  and/or  expanding  cross-border  through  mergers  and 
acquisitions)  which  are  not  the  focus  of  this  impact  assessment.  General  company  law 
presents harmonisation challenges which have an impact on companies in all sectors of the 
economy, going much beyond the services sector. Labour law and social security law are also 
the  object  of  separate  initiatives,  as part  of  the  labour  mobility  package.  As  for  operational 
restrictions  upon  entering  the  market,  each  of  them  present  particular  problems  and  pursue 
specific  policy  objectives,  largely  detached  from  market  entry  barriers.  Targeted  action 
addressing these barriers, namely through enforcement action, is already underway. 

This  initiative  may,  however,  address  some  of  the  administrative  obstacles  raised  in  the 
context  of  regulatory  disparity  in  these  other  domains.  This  can  certainly  be  the  case  for 
formalities already specifically governed by EU Law in force, such as posting formalities in 
the  context  of  labour  and  social  security  law.  Although  this  initiative  does  not  aim  at 
modifying  the  formalities  stemming  from  EU  law  in  those  areas,  there  may  be  positive 
administrative  simplification  effects  from  this  initiative  on  other  formalities  imposed  under 
other rules of social security law, general company law or even tax law.  

Secondly,  there  are  other  non-regulatory  obstacles  that  can  determine  market  integration. 
These include inherent characteristics of the sector. For example, sectors with larger average 
firm size are more likely to have stronger market integration given that these companies have 
more  capacities  to  go  cross-border  in  terms  of  financing,  skills  and  managerial  experience. 
Tradability  of  services  is  also  often  quoted  as  an  important  factor  that  still  limits  further 
market  integration.  Other  elements that  might  play  a  role  include  drivers  such  as  consumer 
preferences. It is important however to put these drivers into perspective. Reducing obstacles 
to cross-border activities will also give more companies opportunities to grow across the EU 
hereby  changing  the  sector  characteristics  over  time.  Also,  even  though  some  services  are 
still more easily traded across borders than others, ICT developments have been reducing this 
gap. In addition, setting up a local presence (instead of trading across borders) can offer an 
alternative  channel  of  business  expansion  for  service  providers  going  cross-border.  Finally, 
consumer preferences can play a role but previous studies have already shown that whether 
the service provider is domestic or not does not play a major role for most consumers when 
selecting a certain provider.194  

193 See http://europa.eu/rapid/press-release_IP-15-5719_en.htm  
194 European Commission, Barriers to trade in business services, 2001 

136 

 
 
                                                 
2.1 Additional evidence on problem driver 1 

  Examples  of  administrative  obstacles  faced  by  service  providers  of  business 

services  

Example 1 – Accounting services in Belgium  

An accounting company that wants to set up a secondary establishment in Belgium needs to 
complete  a  range  of  different  procedures.  One  of  them  concerns  the  application  to  become 
member  of  the  Belgian  professional  chamber  for  accountants  (Institute  of  Accounting 
professionals and Tax Experts) as a legal person. A description of the procedure can be found 
on the website of the professional chamber. The procedure and the forms are only available in 
the  local  languages.  The  service  provider  is  required  to  complete  an  application  form, 
providing a large amount of information including legal form, company name, statutory seat 
contact  data,  branch  contact  data,  shareholder  data  (number  of  shares,  number  of  voting 
rights),  general  business  registration  number,  management  data  and  management 
mandates/positions of managers in other legal persons. In addition, the service provider needs 
to  include  a  range  of  supporting  documents  (including  company  statutes,  copy  of 
shareholding register and proof of insurance). These documents can be submitted only to the 
professional  chamber  by  registered  (postal)  mail.  In  addition,  the  chamber  can  decide 
afterwards  that  the  company  needs  to  complete  its  application  by  submitting  additional 
documents  and/or  invite  representatives  of  the  company  for  a  hearing  with  the  chamber 
before deciding on the application.    

Example 2 – Architectural services in France 

A service provider of architectural services that wants to set up a branch in France needs to 
undergo  a  range  of  procedures.  One  of  them  concerns  the  need  to  be  registered  with  the 
chamber of architects. In order to obtain this registration, the service provider needs to submit 
a  registration  form  together  with  a  range  of  supporting  documents  (including  for  example 
original  of  the  statutes  of  the  company  which  must  include  the  allocation  of  shares,  signed 
and  initialled  by  every  associate).  There  is  no  electronic  procedure  available  and  the 
application  needs  to  be  posted  by  mail.  Each  document  in  a  foreign  language  must  be 
accompanied by a dated and certified translation into French (with a stamp of an official or 
sworn  translator)  which  may  not  be  older  than  one  year.  In  addition,  the  service  provider 
needs to pay a registration fee of 480 EUR (afterwards annual fees also need to be paid). The 
procedure  takes  up  to  two  months  from  the  date  of  the  acknowledgement  of  receipt  of  the 
application with no tacit approval in the absence of a reply.  

Example 3 – Architectural and engineering services in Italy 

A  service  provider  of  architectural  or  engineering  services  is  faced  with  multiple  entry 
controls  (before  the  professional  chamber  and  the  company  register).  These  are  meant  to 
check  legal  establishment  in  the  home  Member  State  but  also  insurance  coverage  and 
corporate structure. If the service provider wants to set up a branch or agency, these controls 
serve  to  make  the  company  a  member  of  the  professional  chamber  also.  However,  since 

137 

 
 
chamber  membership  does  not  seem  to  apply  to  temporary  cross-border  providers,  it  is 
unclear whether and how exactly do these control schemes apply to temporary cross-border 
providers. 

In  any  case,  an  electronic  procedure  is  not  available.  A  range  of  documents  needs  to  be 
submitted  (on  incorporation  details,  legal  establishment  in  the  home  Member  State  and 
insurance coverage in the host Member State), in certified/authenticated format, accompanied 
by  certified  translations  performed  in  Italy.  The  procedures  take  from  1  to  4  months  to  be 
completed and there is no tacit approval. Also, fees have to be paid. 

Example 4 – Architectural and engineering services in Germany 

A  company  providing  architectural  or  engineering  services  is  free  to  provide  services  in 
Germany  without  undergoing  sector-specific  controls.  However,  if  the  company  wants  to 
make  use  of  the  reserved  titles ("Architekt", "Stadtplaner"  or  "Beratender  Ingenieur")  in  its 
corporate  name,  it  must  undergo  a  complex  authorisation  scheme.  This  procedure  is  not 
available electronically. A range of documents needs to be submitted (on incorporation with 
specific  details  on  controlling  shareholders,  managers  and  corporate  purpose,  legal 
establishment in the home Member State and insurance coverage in the host Member State), 
in certified/authenticated format, accompanied by certified translations. The procedures take 
3 months to be completed. Also, fees amount to €500. 

Example  5  –  Interview  with  an  English  engineering  company  going  cross-border  to 
Spain195 

A  service  provider  of  engineering  services  established  in  the  UK  wanted  to  set  up  a 
secondary  establishment.  It  reported  numerous  complicated  formalities  and  costs,  including 
the following: 

-  The company spent an important amount of time on identification and familiarisation 

with the Spanish requirements; 

-  The company also had to collect different supporting documents from home country 
authorities  as  well  as  collect  other  data  itself  (for  example  on  management  and 
shareholders).  This  involved  costs  both  in  the  form  of  internal  staff  time  as  well  as 
fees  paid  to  home  country  authorities  to  obtain  the  required  evidence.  Documents 
need to be delivered in person to the Spanish authorities;  

-  Given the complexity of the procedure the company used external advice services to 
help  understand  and  comply  with  the  different  requirements,  leading  to  further 
additional costs;  

-  The  company  had  to  look  also  for  external  translators  to  translate  supporting 
documents  into Spanish (representing additional  costs also in  the form  of fees to  be 
paid to the translator);  

195 In the context of an on-going study by the Commission, interviews with companies going cross-border were 
carried out.  

138 

 
 
                                                 
-  Finally,  authorisation  and  registration  fees  had  to  be  paid  as  well  to  the  Spanish 

authorities.  

In  general,  the  process  can  be  considered  burdensome  representing  a  cost  for  the  service 
provider of up to 5,000 EUR.  

Example 6  – Interview with a German engineering company going to Austria  

A German provider of mechanical and electric engineering services that wanted to establish 
in Austria was forced to incorporate a subsidiary, since branches are currently not allowed. 
Furthermore  several  of  its  staff  and  managers  needed  to  undergo  special  training  and  pass 
exams  in  order  to  acquire  specific  professional  qualifications,  as  per  Austrian  Law.  This 
included  managers  which  are  not  involved  in  service  performance  in  Austria.  These 
regulatory obstacles also lead to significant administrative costs for the service provider, that 
could go up to 10,000 EUR and more.   

  Examples of administrative obstacles faced by service providers of construction 

services 

Table  1  in  in  appendix  gives  an  overview  of  the  most  stringent  authorisation  requirements 
across Member States for the provision of construction services, either as a sector in general 
or in relation to a specific segment. (column "horizontal authorisation/notification schemes"). 

Example 1 – Construction services in Bulgaria  

A provider of certain construction services that wants to set up a secondary establishment in 
Bulgaria needs to apply for an authorisation with the Bulgarian Construction Chamber. The 
application  form  for  this  authorisation  is  available  only  in  Bulgarian.  The  service  provider 
needs to submit an extensive range of documents such as an application form, four types of 
professional capacity documents, an equipment inventory, copies of insurance documents, a 
document  of  good  repute,  and  three  types  of  economic  and  financial  capacity  documents. 
Simple  copies  of  documents  are  accepted  but  not  simple  translations  which  must  be 
submitted in original format and certified by a translator registered in BG.   

In  temporary  cross-border  situations,  a  prior  notification  is  required  for  each  construction 
project.  The  application  is  available  only  in  Bulgarian.  The  range  of  documents  to  be 
submitted is more limited than in establishment situations (proof of legal establishment in the 
home  Member  State,  details  of  envisaged  construction  project,  proof  of  professional  and 
technical capacity) but still, while simple copies of documents are accepted, translations must 
be submitted in original format and certified by a translator registered in BG. 

Example 2 – Construction services in Denmark 

A provider of certain construction services (such as electrical and gas installations) that wants 
provide  its  services  in  Denmark  (either  establishing  or  on  a  temporary  basis)  needs  to 
undergo  several  procedures,  including  an  authorisation  specific  for  legal  persons.  In  the 
context  of  this  authorisation  procedure  the  company  needs  to  provide  evidence  that  it 

139 

 
 
operates  an  approved  quality  management  system.  Even  if  the  company  has  undergone  a 
similar control in its home Member State, it needs to obtain a certification from certification 
bodies in Denmark. The certification fees related to this are expensive and profit-driven. In 
addition, the certification scheme has no fixed period for decision and is subject to variation 
as  to  a  large  extent  the  completion  of  the  procedure  rests  upon  the  applicant  to  introduce 
appropriate  systems  to  demonstrate  to  the  certification  body  full  compliance  with  the 
requirements.  As  a  result,  this  can  delay  access  to  the  market  considerably  for  the  service 
provider and deter him from expanding operations cross-border. 

  Secondment of staff formalities 

As far as advance declarations concerning posted workers under the Enforcement Directive 
(Article  9)  are  concerned,  administrative  requirements  vary  significantly  across  Member 
States.  For  instance,  access  to  the  procedure  for  the  prior  notification  of  posted  workers  is 
rarely  available  via  the  national  PSCs  (e.g.  DE,  FR).  Where  an  electronic  procedure  is 
available,  registration  in  the  relevant  system  is  usually  necessary  in  order  to  proceed,  thus 
implying  a  separate  registration  for  each  Member  State  to  which  workers  are  posted. 
Declarations may be accepted in a foreign language(/s), usually  English, however this does 
not  necessarily  meet  the  needs  of  SMEs  coming  from  predominantly  "sending"  countries 
(Central-Eastern/Southern  Europe),  whose  language(s)  are  not  covered.  For  instance,  major 
receiving  countries  including  Belgium,  France  and  Germany  do  not  accept  declarations  in 
other languages than English, French or German. Finally, for some Member States, it is not 
that quick to confirm whether advance notifications are required or not. This is also linked to 
the ongoing implementation of the Enforcement Directive. 

Finally,  concerning  advance  declarations  on  professional  qualifications  (where  applicable), 
fully online procedures are only offered in few Member States depending on the profession a 
hand  (no  online  procedure  for  example  for  these  sectors  e.g.  in  BE,  IE,  LV  and  PT). 
Depending  on  Member  State,  the  necessary  administrative  steps  can  be  rather  burdensome 
(e.g. BE, ES), such as bringing original documents or certified copies to a given building of a 
national authority and/or involving long timelines, up to several months. Furthermore, there 
are weaknesses  in  terms of  access to information  (and procedures,  if any) via PSCs.  All  of 
this  makes  it  challenging  to  get  a  full  picture  of  procedural  steps,  document  requirements, 
timelines and fees.    

  Existing research on the impact of administrative burden market dynamics  

A recent Commission study looked into the impact of red tape barriers.196 It showed that the 
higher  the  level  of  red  tape  barriers,  the  lower  entry  dynamics  (i.e.  less  new  companies 
coming into the market). The study also made an attempt to estimate the potential impact of 
recent  reforms  in  Portugal,  Spain  and  Italy  aimed  at  reducing  administrative  burden.  This 
confirmed that these reforms fostered entry dynamics to a significant extent. For example, the 
study showed that as consequences of the changes in the cost of starting a business birth rates 
may  increase  from  6.7%  to  7.2%  in  Italy  and  in  Spain  from  7.9%  to  9.2%.  In  general,  the 

196 European Commission, Business Dynamics and Red Tape Barriers, 2014 

140 

 
 
                                                 
general policy conclusion that can be drawn from this work is that entry rates of companies in 
the EU have positively and robustly reacted to changes in administrative burden during the 
period 2004-2011. 

2.2 Additional evidence on problem driver 2 

  Statistics on information exchange between Member States  

In addition to administrative cooperation under the Services Directive, the IMI system is also 
used  for  administrative  cooperation  under  a  number  of  other  areas  such  as  professional 
qualifications (Directive 2005/36/EC), posting of workers (Directive 96/71/EC) and patients' 
rights (Directive 2011/24/EU). Looking at statistics of exchange of information through IMI, 
it is clear that for issues governed by the Services Directive there is very little communication 
and  cooperation  between  Member  States  (differently  from  posting  of  workers,  where 
exchanges  of  information  are  substantial).  This  becomes  especially  clear  when  comparing 
these  statistics  to  other  areas  for  which  IMI  is  used  (figure  2).  In  addition,  whereas  in  the 
areas of professional qualifications or posting there is a positive evolution in the amount of 
information  exchange  (indicative  of  Member  States  developing  more  regular  contacts)  the 
activity levels regarding the Services Directive remain surprisingly stable.   

Figure 2 – IMI number of information exchanges 

414 
440 
424 
409 
352 

1580 

1069 
971 

806 

Services Directive

Posting of workers

181 

344 
285 

Patients rights

Professional qualifications

3091 

2166 

4527 

5778 

7266 

0

1000

2000

3000

4000

5000

6000

7000

8000

2015

2014

2013

2012

2011

Figure 3 –Member States IMI requests of information under the SD (2015) 

141 

 
 
 
0 
0 
0 
0 
0 
0 
0 
0 
1 
1 
1 
1 
1 
2 
2 
3 
4 
4 

NL
MT
IE
EL
FI
EE
CY
BG
UK
LU
IT
HR
DK
SI
RO
SK
PT
BE
PL
LT
LV
FR
SE
CZ
HU
ES
DE
AT

0

8 
8 
9 
9 

13 

17 

31 

63 

42 

50

100

150

193 

200

250

In  the  context  of  this  impact  assessment,  it  is  also  useful  to  look  into  the  types  of  queries 
Member States have regarding incoming service providers (under the Services Directive).197 
IMI  offers  standardised  questions  that  Member  States  can  use  to  ask  for  information  from 
other  Member  States.  Table  1  gives  an  overview  of  the  10  most  used  questions.  These  are 
related to the legal establishment of the service provider in its home Member State as well as 
information on identification, good repute and solvency.    

Table 1 – Top 10 questions Services Directive IMI (2015) 

Question 
Is the service provider entitled to exercise the activity of [XXX] 
in your Member State? 

1 

3 

2  Is [XXX] the correct business name of the service provider?  
Is this service provider lawfully established in your Member 
State? 
On the basis of information in your criminal register, has any 
(final) criminal sanction which is directly relevant to his/her 
competence or professional reliability been imposed on [XXX] 
(only in relation to measures which can no longer be challenged 
in the courts and which are still active against this person)? 
Does the [XXX] of the service provider correspond to the one 
that has been registered/is held by public authorities in your 
Member State? 

5 

4 

% of 
requests 

14,2% 

9,5% 

9,3% 

8,8% 

8,1% 

197 Taking into account however that these IMI statistics, due to the low volume of administrative cooperation, 
are not fully representative. The statistics of the services requests predominantly reflect the needs and activity of 
the few competent authorities that actively use IMI for administrative cooperation. 

142 

 
 
 
  
                                                 
Is the service provider: [XXX] registered in a debtors register, 
has he been declared insolvent/bankrupt in your Member State 
or has any insolvency/bankruptcy proceeding of the assets of 
the service provider been instituted (only if this is still active 
against this service provider, i.e. pending or actual insolvency)? 
Does the service provider, to your knowledge, exercise his 
activities in a lawful manner? 
Does the service provider effectively carry out/has he 
effectively carried out the activities of [XXX] from his 
establishment in your Member State? (Further information 
about the specific service provision [e.g. name, address of 
recipient, date when the service has been/will be provided etc.] 
is given below) 
Does the address: [XXX] of the service provider correspond to 
the one that has been registered/is held by public authorities in 
your Member State? 
Does the service provider effectively carry out his activities 
from his establishment in your Member State? 
Other questions 

6 

7 

8 

9 

10 

7,9% 

7,4% 

6,6% 

5,7% 

3,8% 
18,8% 

2.3 Additional evidence on problem driver 3 

  Identified professional indemnity insurance obligations in business  services and 

construction 

Tables 2, 3 and 4 in appendix show an overview of insurance requirements per Member State 
for the business services sectors of accountants, architects and engineers. The ELIOS project 
has  reported  insurance  requirements  for  construction  services  across  all  Member  States 
(although  in  the  UK  as  a  market  condition  to  access  financing),  as  shown  in  Table  1  in 
appendix198.  

Some Member States maintain strict insurance requirements for all three  business services. 
These are LT, PL, PT, IT and DE (in the latter case for auditors and tax advisors providing 
accounting services).  

Several Member States have strict requirements in place for architects and engineers (SI, LU, 
HR,  CZ,  CY  and  BG).  FR  and  BE  have  strict  requirements  in  place  for  accountants  and 
architects.  SK  has  requirements  in  place  for  architects  and  engineers,  but  these  are  less 
restrictive than in other Member States because it has both a clause and a procedure in place 
to provide for the mutual recognition of insurances obtained in another Member State. SE and 
EL have no insurance requirements in their regulations. 
Regarding  construction  services199,  there  is  also  a  large  diversity  of  national  liability 
regimes which in turn results in very diverse insurance coverage obligations across Member 
States. Accruing to this diversity, the insurance coverage obligations themselves differ across 

198 Available at http://www.elios-ec.eu/sites/default/files/pdf/Eliosspecialreporton27MemberStates.pdf  
199  See  also  Ecorys,  "Simplification  and  mutual  recognition  in  the  construction  sector  under  the  Services 
Directive", 2015 

143 

 
 
  
   
                                                 
Member  States  in  terms  of  geographical,  temporal  coverage,  insured  risks  in  particular, 
insured sum and exclusions from the cover. Although policy objectives are to a large extent 
similar,  each  Member  State  chooses  each  or  even  all  types  of  liability  and  their  respective 
mandatory  insurance  coverage  conditions  in  particular  terms,  differently  from  all  other 
Member States, in order to secure the quality and safety of construction services and thus the 
protection of service recipients, third parties and society in general. 

  Implementation of Art. 23 by Member States 

Regarding business services, in those Member States where insurance is mandatory, there is 
usually a mutual recognition clause in place, based on Article 23 of the Services Directive. In 
most  cases,  however,  there  is  no  clear  procedure  or  guidelines  for  the  assessment  of 
equivalence  of  insurance  policies  issued  in  other  Member  States.  In  AT  (accountants),  BE 
(architects), FR (accountants & architects), LT (accountants, architects & engineers) and PL 
(accountants) no explicit equivalence rule has even been provided for. 

For construction services, there is also an absence of specific mutual recognition procedures 
for  assessing  equivalence  between  coverages  obtained  in  different  Member  States.  As  a 
result, stakeholders have confirmed that coverage obtained in a home Member State is largely 
disregarded  when  accessing  a  host  Member  State  market.  A  whole  new  coverage,  in 
accordance with host Member State requirements, needs to be obtained. 

This assessment for construction services drew some of the data from another initiative in the 
construction sector - the ELIOS project200. Its aim was to facilitate access to insurance across 
borders  by  building  contractors,  especially  the  self-employed  and  small  firms,  in  both 
secondary  establishment  and  temporary  cross-border  services  cases.  The  project  team 
included  leading  general  insurers  as  well  as  construction  insurance  specialists.  The  project 
had  two  phases:  ELIOS  I,  completed  in  2010,  and  ELIOS  II,  completed  in  2015. 
Nevertheless,  no  concrete  measures  seem  to  have  been  taken  so  far  as  a  follow  up  to  the 
report. ELIOS suggested establishing a system of equivalence of insurance issued in different 
Member  States  but  it  also  anticipates  the  limitations  of  such  a  solution  if  the  regulatory 
diversity of national legislations201 is not concurrently addressed. ELIOS also recommended 
the setting up a mediator (European Facilitator for access to construction insurance), aimed to 
assist  cross-border  construction  service  providers  in  collecting  information  and  directing 
them to recognised insurance organisations. 

2.4 Additional evidence on problem driver 4 

  Authorisation procedures – secondary establishment  

Despite a considerable reduction in the number of authorisation and registration requirements 
following  the  entry  into  force  of  the  Services  Directive,  numerous  requirements  remain  in 
place  across  many  Member  States.  A  mutual  evaluation  exercise  undertaken  in  2010  and 
2011  concluded  that  overall  there  were  around  4400  authorisation  schemes  and  225 

200 http://www.elios-ec.eu/  
201 For an overview of national liability and insurance systems in 27 EU Member States, see page 81 of the final 
report of ELIOS I (2010): http://www.elios-ec.eu/sites/default/files/pdf/Eliosfinalreportfullversion.pdf     

144 

 
 
                                                 
multidisciplinary requirements in place across the EU and confirmed high regulatory activity 
on these issues.202 

Tables 2, 3 and 4 in appendix give an overview of authorisation requirements across Member 
States  for  the  business  services  sectors  of  accountants,  architects  and  engineers  (column 
"control  schemes").  Authorisation  schemes  are  required  of  accountancy  firms  in  Austria, 
Belgium,  France,  Italy,  Luxembourg,  Portugal  and  Romania  and  of  architectural  firms  and 
engineering firms  in  Austria,  Belgium  (only  architectural  firms),  Bulgaria,  Croatia, Cyprus, 
Czech  Republic,  France  (only  architectural  firms),  Germany,  Italy,  Luxembourg,  Portugal, 
Slovakia,  Slovenia  and  Spain,  although  in  Germany  and  Portugal  companies  not  bearing  a 
reserved title are not subject to these requirements. 

In  some  countries,  such  as  Austria,  Belgium,  Cyprus,  Germany,  Luxembourg,  Italy  and 
Portugal  an  authorisation  is  even  meant  to  award  chamber  membership  to  the  company.  In 
addition,  not  all  fees  related  to  chamber  membership  are  calculated  in  compliance  with 
Articles  13  of  the  Services  Directive.  For  instance,  in  Italy,  fees  are  reportedly  calculated 
based on corporate turn-over, not on the costs incurred by the administration. 

In  the  context  of  these  authorisations,  Member  States  often  require  information  and 
documents  of  service  providers  instead  of  resorting  to  administrative  cooperation,  as 
explained above.  

Much simpler authorisation schemes are put in place in some countries to control compliance 
with  different,  simpler  conditions:  an  authorisation  scheme  controls  compliance  with 
involvement of professionals by architectural and engineering in the Netherlands in order for 
the professional title to be used in the corporate name. Insurance requirements are controlled 
in the same fashion in Lithuania. 

Finally  some  Member  States  control  those  same  sorts  of  conditions  through  mere  prior 
notifications,  meaning  a  company  may  start  provision  of  services  immediately  upon 
submission of a declaration properly filled-in (examples include Greece and Latvia). This is a 
much less burdensome approach. 

  Authorisation procedures – temporary cross-border provision  

Regarding temporary provision of cross-border services, authorisation schemes are virtually 
impossible  to  justify  under  the  Services  Directive,  given  that  prior  legal  establishment  in  a 
home Member State is a  pre-condition to  go cross-border but  particularly given the limited 
link of the provider with the host Member State's jurisdiction. Article 16(2)(b) of the Services 
Directive lists such requirements as inadmissible, as a matter of principle. Any justification of 
such requirements, as indeed of any other, including prior notifications, must take place under 
overriding  reasons  of  public  policy,  public  health,  public  safety,  protection  of  the 

202  Communication  from  the  Commission  to  European  Parliament,  the  Council,  the  European  Economic  and 
Social Committee and the Committee of the Regions, Towards a better functioning Single Market for services – 
building  on  the  results  of  the  mutual  evaluation  process  of  the  Services  Directive,  27.1.2011,  COM(2011)  20 
final. 

145 

 
 
                                                 
environment and none other, and of course requirements must always be non-discriminatory 
(Article 16(1)(3) of the Services Directive). 

As explained above, only few Member States have put in place specific rules for companies 
providing temporary cross-border professional services of this nature: for accountancy firms 
Belgium,  France  and  Romania  require  a  prior  notification  (see  tables  in  appendix,  column 
"control  schemes").  For  architectural  and  engineering  services,  Croatia,  Cyprus  and 
Luxembourg  also  require  a  prior  notification,  as  does  Belgium  for  architectural  services. 
However, the underlying conditions which have to be proven by such declaration in advance 
are often unclear, as we mention below. 

Much more unclear is the situation in those countries heavily regulating the sector but having 
no particular rules for temporary cross-border provision. For example, accountancy firms in 
Austria,  Italy  and  Luxembourg  as  well  as  architectural  firms  and  engineering  firms  in 
Austria,  Bulgaria,  France  (only  architectural  firms),  Italy,  Slovakia  and  Slovenia  do  not 
specify clearly whether controls imposed on their professionals (natural persons) performing 
the  services  suffice  when  it  is  the  company  who  provides  the  service.  Portugal  is  clear  in 
stating  that  controlling  an  incoming  professional  working  for  a  company  temporarily 
providing services in its territory is enough. 

In  Germany  and  Spain,  certain  requirements  apply  for  the  temporary  provision  of  services 
through the so-called "professional" companies.  

  Restrictions  on  corporate  form  and  shareholding/voting  and  management 

structures  

Several  Member  States  impose  restrictions  on  companies  who  want  to  open  a  secondary 
establishment as regards their legal form, their shareholding structure, the allocation of voting 
rights, management positions and multidisciplinary activities: 

  Legal form restrictions allow for the provision of certain services by partnerships and 
sometimes by limited liability companies only. Other company types, including public 
limited liability companies, are not allowed in certain countries. A range of Member 
States imposes such requirements, thus not allowing for the recognition of companies 
incorporated under the laws of other Member States.  

  Requirements for shareholding and voting rights to be held by qualified professionals 
are  even  more  widespread.  They  often  bar  legal  persons  from  holding  shares  and 
sometimes  go  beyond  imposing  a  simple  majority.  In  other  cases,  professionals 
(natural  persons)  owning  shares  or  voting  rights  even  need  to  be  qualified  in  those 
respective countries or have undergone professional qualification recognition there.  
  Requirements  imposing  management  positions  to  be  held  by  professionals  are  also 
common, requiring sometimes one manager to be a professional but more often that a 
majority or even all managers be professionals. Such requirements are also present in 
a range of different Member States.  

Regarding  secondary  establishment,  Article  14  of  the  Services  Directive  clearly  forbids 
discriminatory  requirements  regarding  legal  form,  shareholding/voting  and  management 

146 

 
 
positions.  It  also  forces  Member  States  to  allow  for  a  free  choice  between  subsidiaries, 
branches and agencies. Article 15 of the Services Directive, in turn, requires Member States 
to assess and justify the existence of (other) requirements on legal form, shareholding/voting 
or management, on the basis of the principles on non-discrimination, necessity (i.e. justified 
by an overriding reason of public interest) and proportionality. 

Tables  2,  3  and  4  in  appendix  give  an  overview  of  requirements  on  corporate  form  and 
shareholding/voting  and  management  structures  across  Member  States  for  the  business 
services sectors of accountants, architects and engineers.   

Requirements  limiting  the  legal  form  of  companies  providing  architectural  or  engineering 
services  are  still  present  for  example  in  Austria,  Belgium  (for  architectural  services  only), 
Cyprus and Czech Republic. Other countries such as Germany impose particular legal forms 
on companies, but only if they wish to bear a reserved title203.  

Shareholding and voting rights requirements are present in a large number of countries.  For 
example,  regarding  accountancy  firms  these  requirements  are  present  in  countries  such  as 
Belgium,  France,  Italy,  Luxembourg  and  Romania.  Regarding  architectural  or  engineering 
firms,  examples  include  Austria,  Belgium  (only  architectural  services),  Bulgaria,  Cyprus, 
Czech  Republic,  France  (only  architectural  services),  Italy,  Slovakia  and  Slovenia. In  some 
cases (including Austria, Bulgaria, Cyprus, Czech Republic, France, Romania, Slovakia and 
Slovenia),  professionals  (natural  persons)  owning  shares  or  voting  rights  even  need  to  be 
qualified  in  those  respective  countries  or  have  undergone  professional  qualification 
recognition  there.  Other  countries  such  as  Germany  impose  shareholding  and  voting  rights 
requirements  on  companies,  but  only  if  they  wish  to  bear  a  reserved  title.  Sometimes  legal 
persons are even barred from owning a (majority) stake in shares. 

Countries such as Austria, Luxembourg and Cyprus also require managers of the company to 
be qualified in those respective countries. Non-discriminatory management requirements, i.e. 
a pre-determined number of managers required to be qualified as professionals anywhere in 
the EU are also present, for example in Portugal (for all three professions, although only to be 
able to use a reserved title), Belgium (for accountancy and architectural services) and France 
(for accountancy services). 

Regarding  temporary  cross-border  provision  of  services,  the  situation  in  these  countries  is 
often unclear. In those Member States imposing a mere notification in advance for temporary 
cross-border  services,  as  mentioned  above,  it  is  perhaps  fair  to  assume  that  such  stringent 
requirements are not applicable. In the remaining Member States, legislation does not refer to 
this manner of service provision at all.  

Portuguese and German legislation are clear in stating that these requirements apply only to 
those wishing to bear their respectively reserved titles, but Croat and Spanish legislation are 
not. In any case, as mentioned above, acquisition of a reserved title is much more important 

203 A "reserved title" of a company is a particular designation, or part thereof, which use is subject under Law to 
compliance  with  pre-defined  requirements,  barred  from  use  by  any  other  company  not  fulfilling  those  same 
requirements. 

147 

 
 
                                                 
for  establishment  situations,  since  companies  do  not  change  their  home  Member  State 
corporate name in the context of temporary provisions. 

  Restrictions on multidisciplinary activities  

Multidisciplinary restrictions forbidding joint exercise of certain professional activities may 
also prevent companies from other Member States from opening a secondary establishment 
or providing temporary cross-border services. Tables 2, 3 and 4 in appendix give an overview 
of multidisciplinary restrictions for architects, engineers and accountants across the Member 
States.  

This type of restriction may occur whenever a company wishes to expand its activities to a 
Member State where two (or more) activities are deemed incompatible but their joint exercise 
is  allowed in the home  Member State: accountancy in  Belgium is  not allowed to  be jointly 
provided with services such as insurance, broking, banking, crafts or trade. Legal services are 
banned for accountancy firms in Portugal, as is tax advice in Poland. Construction activities 
are banned for architectural and engineering services in Bulgaria.  

Certainly  some  of  these  restrictions  may  be  justifiable,  in  proportionate  terms,  for 
independence or impartiality reasons, as allowed by Article 25 of the Services Directive. But 
such rules should not dictate a total ban on cross-border expansion for companies, provided 
they  comply  with  multidisciplinary  restrictions  regarding  their  operations  in  the  territory 
where the restriction is in force, while keeping their corporate purpose in the home. 

It  is  nevertheless  far  more  stringent  a  restriction  by  which  any  other  activity  whatsoever  is 
banned to providers of professional services. This is the case for accountancy in Luxembourg 
and  Portugal  (if  a  reserved  title  is  used)  and  for  architectural  or  engineering  services  in 
Austria,  Belgium  (architectural  services  only),  Croatia  (if  a  reserved  title  is  used),  Cyprus, 
Germany (if a reserved title is used), Greece and Luxembourg. In these cases, any company 
involved  in  any  other  activity  in  another  Member  State  is  banned  from  expanding  its 
activities into the aforementioned Member States. Total bans such as these are not justifiable 
under Article 25 of the Services Directive, certainly in situations where access to a reserved 
title is not in question. 

148 

 
 
  
 
 
 
 
 
Appendix – Overview of requirements for construction and selected business services204205 

Type of 
restriction 

Horizontal207 authorisation/ notification schemes  
(access to whole market and/or segments)  

Insurance 

Table 1 – Construction services206   

Member  
State 

AT 

BE 

BG 

HR 
CY 
CZ 

DK 

DE 

Authorisation (whole market) 

Yes  

Authorisation 
(whole market + separate authorisations for demolition with 
asbestos, certain drilling and alarm installation) 
Authorisation (whole market) (estab) 
Notification (whole market) 
(temp) 
Authorisation, (whole market) 
Authorisation + Notification (whole market) 

Authorisation (Electrical, gas, sewerage) 

Yes  - Work performance (completion) + Latent defects 

Yes - Work performance + latent defects 

Yes 
Yes 
Yes 

Yes  - Latent defects 

Yes - Work performance + latent defects 

204 Highlight colour indicates ongoing infringement procedure 
205 (estab) – requirement applicable to establishment situations; (estab with title) – requirement applicable to establishment situations in which the company/firm chooses to 
bear a reserved title, although bearing this title is not required to become legally established; (temp) – requirement applicable to temporary cross-border provision of services 
206 Partial information only – further collection of data ongoing 
207 As opposed to authorisation or notification schemes for on-site performance of services (e.g. building permits) 

149 

 
 
 
 
 
 
 
 
                                                 
EE 

EL 

FI 

FR 

HU 

IE 

IT 
NL 

LV 

LT 

LU 

MT 
PL 

PT 

Notifications (separate notifications for separate segments: 
Notification scheme is implemented on most construction services. 
Though, there is no universal notice providing access to all 
segments. Service providers must submit a notification concerning 
each specific segment before engaging in that segment.) 
Authorisation (design and supervision staff – whole market) 

Yes 

Yes 

Notification, (whole market) 

Authorisation 
(whole market) 

Certificate undeclared work (exemption less than 3 months) 

Authorisation, (specific segments: building construction, building 
water and sewerage, etc) 
Authorisation (for more complex building works) or Notification 
(for other works)   
(specific segments: building water and sewerage, gas or electrical 
installations, installing certain equipment to be incorporated in the 
building, once completed, such as air conditioning, lifts, etc.) 
Horizontal authorisation scheme is applicable to service providers 
only for building works in the most demanding class.) 
Authorisation  
(whole market) 

Authorisations (whole market + separate for specific segments of 
telecom, gas, acclimatisation, lifts installation) (estab) 
Notifications (whole market + separate for specific segments of 
telecom, gas, acclimatisation, lifts installation)  (temp) 

Yes  - Work performance (insolvency) + latent defects 

Yes - Work performance + latent defects + statutory liability (equipment) 

Yes 

Yes - Work performance (insolvency) + latent defects 

Yes - Work performance (insolvency) + latent defects 
Yes - Work performance (insolvency) + latent defects 

Yes - Latent defects 

Yes - Latent defects 

Yes  

Yes 
Yes - Work performance + Latent defects 

Yes - Work performance + Latent defects (to be implemented)  

150 

 
 
 
 
 
 
 
RO 

SK 

SI 
SE 

ES 

UK 

Notification  
(whole market) 

Authorisation (whole market) 
(exemption for less than 8 days) 

Yes 

Yes 

Yes  - Work performance + Latent defects (solidity) 
Yes - Work performance (completion) + Latent defects 

Yes - Work performance + Latent defects 

Yes - Work performance (fraud and completion) + Latent defects (de facto, 
for financing purposes) 

151 

 
 
 
 
 
 
 
 
 
 
 
Type of 
restriction 

Member  
State 

Registration and 
other control 
schemes for legal 
persons 

AT 

Chamber membership 
(estab) 

Table 2 - Architectural services 

Legal form 

Shareholding 
and/or voting rights 
in professional 
hands208 

Management in 
professional 
hands212 

Multi 
Disciplinary 
restrictions for legal 
persons 

Professional 
indemnity 
Insurance of legal 
persons  

Only legal form of 
types of companies 
available in AT are 
allowed + limited 
choice of AT legal 
forms  
(estab) 
Only legal form of 
types of companies 
available in BE are 
allowed + limited 
choice of BE legal 
forms  
(estab with title) 
(estab) 

Chamber membership 
(estab with title) 
Authorisation (estab)  
Yearly notification 
(temp) 

Authorisation  
(estab) 

------------ 

Chamber membership 
(estab with title) 

-------------- 

50% + 1 share must be 
owned by professionals 
qualified as per AT Law 
+ no legal persons 
allowed as shareholders 
(estab)  

Majority of managers 
must be professionals 
qualified as per AT Law  
+ only shareholders can 
be managers 
(estab) 

Only civil engineering 
services allowed 

--------- 

60% shares (estab with 
title) or 50% + 1 shares 
(estab) must be owned 
by professionals 
qualified or companies 
established anywhere in 
the EU  

50% + 1 share must be 
owned by professionals 
qualified as per BG Law 
or companies established 
anywhere in the EU 
under majority control by 
professionals 
 (estab) 
100% shares must be 
owned by professionals 

100% of managers must 
be professionals 
qualified anywhere in the 
EU 
 (estab) 

Exclusivity 
 (estab) 

Yes 

------------ 

Several 

Yes 

100% of managers must 
be professionals 

Only engineering services 
allowed  

Yes 

BE 

BG 

HR 

208  The  reference  "qualified  as  per  a  Member  State's  Law"  includes  recognition  of  professional  qualification  procedures,  put  in  place  while  transposing  the  Professional 
Qualifications Directive in the Member State in question but, in these cases, made to apply to situations not covered by that Directive. 

152 

 
 
 
 
 
 
                                                 
Authorisation (estab)  
Yearly notification 
(temp) 

Chamber membership  
(estab)  
Prior notification 
(temp) 

Authorisation 
 (estab) 

-------------- 
-------------- 
-------------- 

Chamber membership 
(estab) 

Authorisation  
(estab with title) 

qualified (also as 
engineers) as per HR 
Law + no legal persons 
allowed as shareholders 
(estab with title) 
100% shares must be 
owned by professionals 
qualified (also as 
engineers) as per CY 
Law + no legal persons 
allowed as shareholders 
(estab) 
100% shares or 50% + 1 
share (depending on 
company type) must be 
owned by professionals 
qualified as per CZ Law 
+ no legal persons 
allowed as shareholders 
(estab) 
-------------- 
-------------- 
-------------- 
50% shares must be 
owned by professionals 
qualified or companies 
established as per FR 
Law 
 (estab) 
100% shares (50% of 
related professionals) 
must be owned by 
professionals qualified 
anywhere in the EU + no 
legal persons allowed as 
shareholders  
(estab with title) 

Only legal form of 
types of companies 
available in CY are 
allowed + limited 
choice of CY legal 
forms  
(estab) 

Only legal form of 
types of companies 
available in CZ are 
allowed + limited 
choice of CZ legal 
forms  
(estab) 

-------------- 
-------------- 
-------------- 

No tradesmen's forms 
of types of companies 
are allowed  
(estab) 

Only legal form of 
types of companies 
available in DE are 
allowed + limited 
choice of DE legal 
forms  
(estab with title) 

qualified (also as 
engineers) as per HR 
Law  
(estab with title) 

100% of managers must 
be professionals 
qualified (also as 
engineers) as per CY 
Law  
(estab) 

100% or majority of 
managers (depending on 
company type) must be 
professionals qualified as 
per CZ Law  
 (estab) 

(estab with title) 

Only engineering services 
allowed  
(estab) 

Yes (estab) 

Only engineering services 
allowed  
(estab) 

Yes 

-------------- 
-------------- 
-------------- 

-------------- 
-------------- 
-------------- 

-------------- 
-------------- 
-------------- 

50% of managers must 
be professionals 
qualified as per FR Law 
(estab) 

50% of managers must 
be professionals 
qualified anywhere in the 
EU 
 (estab with title) 

-------------- 

Yes 

Only related professional 
activities 
 (estab with title) 

Yes 

CY 

CZ 

DK 
EE 
FI 

FR 

DE 

153 

 
 
EL 

HU 

IE 

IT 

LV 

LT 

LU 

MT 

NL 

PL 

PT 

Notification within 6 
months  
(estab) 

-------------- 

-------------- 

-------------- 

Only related professional 
activities 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

Authorisation  

-------------- 

-------------- 

1 executive manager 
must be a professional 
qualified anywhere in the 
EU 

-------------- 

Yes 

Chamber membership, 
Notification to 
company register 
(estab) 

Prior notification 
(estab) 

Authorisation  
(estab) 

-------------- 

2/3 of voting rights must 
be held by professionals 
qualified anywhere in the 
EU + no legal persons 
allowed as shareholders 
(estab) 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

Chamber membership 
(estab) 
Prior notification 
(temp) 

No companies with 
bearer or endorseable 
shares are allowed 
(estab) 

-------------- 

100% of managers must 
be professionals 
qualified as per LU Law 
(estab) 

Only engineering services 
allowed  
(estab) 

Yes 

Yes 

Yes 

Yes 

Yes 

-------------- 
Authorisation  
(estab with title) 

-------------- 

-------------- 

--------------  

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

Chamber membership 
(estab with title) 
Notification to chamber 
 (estab) 

-------------- 

50% + 1 share must be 
owned by professionals 
qualified anywhere in the 
EU or companies 

-------------- 
1 executive manager 
must be a professional 
qualified anywhere in the 
EU  
(estab with title) 

-------------- 

Yes 

Exclusivity  
(estab with title) 

Yes (temp only if no 
insurance at home) 

154 

 
 
 
 
 
 
 
RO 

SK 

-------------- 

-------------- 

Authorisation  

-------------- 

SI 

Authorisation  

-------------- 

ES 

SE 

UK 

Authorisation  

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

established anywhere in 
the EU under majority 
control by professionals 
(estab with title) 
-------------- 
50% + 1 share must be 
owned by professionals 
qualified as per SK Law 
+ no legal persons 
allowed as shareholders 
(estab) 
50% + 1 share must be 
owned by professionals 
qualified as per SI Law + 
no legal persons allowed 
as shareholders 
 (estab) 
50% + 1 share must be 
owned by professionals 
qualified anywhere in the 
EU or companies 
established anywhere in 
the EU  
(estab with title) 
-------------- 
Controlling stake must 
be owned by a 
professional established 
in the UK 
 (estab with title) 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

Yes 

-------------- 

-------------- 

Yes 

-------------- 

-------------- 

Yes  
(in many regions – in 
all ES for estab with 
title) 

-------------- 

-------------- 

-------------- 

1 executive manager 
must be a professional 
established in the UK 
(estab with title) 

-------------- 

Yes 
 (estab with title) 

155 

 
 
 
 
 
 
 
 
 
 
 
 
Table 3 - Civil, mechanical and electrical engineering services 

Legal form 

Shareholding 
and/or voting rights 
in professional 
hands209 

Management in 
professional 
hands213 

Multi 
Disciplinary 
restrictions for legal 
persons 

Professional 
indemnity 
Insurance of legal 
persons  

Registration 
and other 
control schemes 
for legal 
persons 

Type of 
restriction 

Member  
State 
(and specific 
service sector) 

AT210 

Chamber 
membership 
 (estab) 

BE 

------------ 

Only legal form of 
types of companies 
available in AT are 
allowed + limited 
choice of AT legal 
forms  
(estab) 
------------ 

BG 
(civil 
engineering 
only) 

Authorisation  
(estab) 

------------ 

HR211 

Chamber 
membership  

------------ 

50% + 1 share must be 
owned by professionals 
qualified as per AT Law 
+ no legal persons 
allowed as shareholders 
(estab)  

Majority of managers 
must be professionals 
qualified as per AT Law  
+ only shareholders can 
be managers  
(estab) 

Only architectural services 
allowed 

------------ 

------------ 
50% + 1 share must be 
owned by professionals 
qualified as per BG Law 
or companies established 
anywhere in the EU 
under majority control by 
professionals 
 (estab) 
75% shares must be 
owned by professionals 

------------ 

------------ 

------------ 

------------ 

Several 

Yes 

------------ 

Only architectural services 
allowed  

Yes 

209  The  reference  "qualified  as  per  a  Member  State's  Law"  includes  recognition  of  professional  qualification  procedures,  put  in  place  while  transposing  the  Professional 
Qualifications Directive in the Member State in question. 
210 The ongoing infringement procedure refers to civil engineering services only 
211 Information for mechanical and electrical engineering services not available 

156 

 
 
 
 
 
 
 
                                                 
(estab with title) 
Authorisation 
(estab)  
Yearly notification 
(temp) 

Chamber 
membership  
(estab)  
Prior notification 
(temp) 

Authorisation 
(estab) 

-------------- 
-------------- 
-------------- 
-------------- 

Authorisation  
(estab with title) 

Notification within 
6 months 
 (estab) 

CY 

CZ 
(civil 
engineering 
only) 

DK 
EE 
FI 
FR 

DE 

EL 

qualified (also as 
professionals in 
construction) as per HR 
Law + no legal persons 
allowed as shareholders 
(estab) 
100% shares must be 
owned by professionals 
qualified (also as 
architects) as per CY 
Law + no legal persons 
allowed as shareholders 
(estab) 
100% shares or 50% + 1 
share (depending on 
company type) must be 
owned by professionals 
qualified as per CZ Law 
+ no legal persons 
allowed as shareholders 
(estab) 
-------------- 
-------------- 
-------------- 
-------------- 
100% shares (50% of 
related professionals) 
must be owned by 
professionals qualified 
anywhere in the EU + no 
legal persons allowed as 
shareholders  
(estab with title) 

Only legal form of 
types of companies 
available in CY are 
allowed + limited 
choice of CY legal 
forms 
 (estab) 

Only legal form of 
types of companies 
available in CZ are 
allowed + limited 
choice of CZ legal 
forms 
 (estab) 

-------------- 
-------------- 
-------------- 
-------------- 

Only legal form of 
types of companies 
available in DE are 
allowed + limited 
choice of DE legal 
forms  
(estab with title) 

(estab with title) 

100% of managers must 
be professionals 
qualified (also as 
architects) as per CY 
Law  
(estab) 

100% or majority of 
managers (depending on 
company type) must be 
professionals qualified as 
per CZ Law  
 (estab) 

Only architectural services 
allowed  
(estab) 

Yes  
(estab) 

Only architectural services 
allowed  
(estab) 

Yes 

-------------- 
-------------- 
-------------- 
-------------- 

-------------- 
-------------- 
-------------- 
-------------- 

-------------- 
-------------- 
-------------- 
-------------- 

50% of managers must 
be professionals 
qualified anywhere in the 
EU 
 (estab with title) 

Only related professional 
activities  
(estab with title) 

Yes 

-------------- 

-------------- 

-------------- 

Only related professional 
activities 

-------------- 

157 

 
 
HU 

IE 

IT 

LV215 

LT215 

LU 

MT 

NL 

PL 

PT 

Chamber 
membership, 
Notification to 
company register 
(estab) 

Prior notification 
(estab) 

Authorisation 
(estab) 

Chamber 
membership  
(estab) 
Prior notification 
(temp) 

-------------- 
Authorisation 
(estab with title) 
-------------- 

Chamber 
membership 
 (estab with title) 
Notification to 
chamber 
 (estab) 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

2/3 of voting rights must 
be held by professionals 
qualified anywhere in the 
EU + no legal persons 
allowed as shareholders 
(estab) 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

No companies with 
bearer or endorseable 
shares are allowed 
(estab) 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

100% of managers must 
be professionals 
qualified as per LU Law 
(estab) 

Only architectural services 
allowed (estab) 

--------------  

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

50% + 1 share must be 
owned by professionals 
qualified anywhere in the 
EU or companies 
established anywhere in 
the EU under majority 
control by professionals 
(estab with title) 

1 executive manager 
must be a professional 
qualified anywhere in the 
EU 
 (estab with title) 

Exclusivity  
(estab with title) 

Yes  
(temp only if no 
insurance at home) 

158 

Yes 

Yes 

Yes 

Yes 

Yes 

-------------- 

Yes 

 
 
 
 
 
 
 
 
 
RO 

-------------- 

-------------- 

SK 
(civil 
engineering 
only) 

Authorisation  

-------------- 

SI215 

Authorisation  

-------------- 

ES 

SE 

UK 
(civil and 
mechanical 
engineering 
only) 

Authorisation  

-------------- 

-------------- 

-------------- 

-------------- 

Only partnerships are 
allowed  
(estab with title) 

-------------- 
50% + 1 share must be 
owned by professionals 
qualified as per SK Law 
+ no legal persons 
allowed as shareholders 
(estab) 
50% + 1 share must be 
owned by professionals 
qualified as per SI Law + 
no legal persons allowed 
as shareholders  
(estab) 
50% + 1 share must be 
owned by professionals 
qualified anywhere in the 
EU or companies 
established anywhere in 
the EU  
(estab with title) 
-------------- 

100% shares must be 
owned by professionals 
established in the UK + 
no legal persons allowed 
(estab with title) 

-------------- 

-------------- 

-------------- 

-------------- 

-------------- 

Yes 

-------------- 

-------------- 

Yes 

-------------- 

-------------- 

Yes  
(in many regions – in 
all ES for estab with 
title) 

-------------- 
100% managers must be 
professionals established 
in the UK  + only 
shareholders can be 
managers 
(estab with title)  

-------------- 

-------------- 

-------------- 

-------------- 

159 

 
 
 
 
 
 
 
 
 
 
 
 
Type of 
restriction 

Member  
State 

Registration and 
other control 
schemes for legal 
persons 

Table 4 - Accountancy services 

Legal form 

Shareholding 
and/or voting rights 
in professional 
hands212 

Management in 
professional 
hands216 

Multi 
Disciplinary 
restrictions for legal 
persons 

Professional 
indemnity 
Insurance of legal 
persons  

AT 

BE 

BG 
HR 
CY 
CZ 
DK 
EE 
FI 

FR 

--------- 

--------- 

Chamber membership 
(estab) 

Chamber membership 
(estab)  
Yearly notification 
(temp) 

--------- 
--------- 
--------- 
--------- 
--------- 
--------- 
--------- 

--------- 

--------- 
--------- 
--------- 
--------- 
--------- 
--------- 
--------- 

Chamber membership 
(subsidiaries only) 
Yearly notification 
(temp) 

No tradesmen's forms 
of types of companies 
are allowed  
(estab) 

1 manager must be a 
professional qualified as 
per AT Law 
(estab) 

Majority of managers 
must be professionals 
qualified anywhere in the 
EU 
 (estab) 

--------- 
--------- 
--------- 
--------- 
--------- 
--------- 
--------- 
100% of managers must 
be professionals 
qualified anywhere in the 
EU  + only shareholders 
can be managers  
(estab) 

--------- 

Yes  
(purchased in AT) 

Several 

Yes 

--------- 
--------- 
--------- 
--------- 
--------- 
--------- 
--------- 

Some tradesmen's 
activities 

--------- 
--------- 
--------- 
--------- 
--------- 
--------- 
--------- 

Yes  
(estab) 

50% + 1 shares must be 
owned by professionals 
qualified or companies 
established anywhere in 
the EU 
 (estab) 
--------- 
--------- 
--------- 
--------- 
--------- 
--------- 
--------- 
2/3 of voting rights must 
be held by professionals 
qualified or companies 
established anywhere in 
the EU  
(estab) 

212  The  reference  "qualified  as  per  a  Member  State's  Law"  includes  recognition  of  professional  qualification  procedures,  put  in  place  while  transposing  the  Professional 
Qualifications Directive in the Member State in question but, in these cases, made to apply to situations not covered by that Directive. 

160 

 
 
 
 
 
 
                                                 
DE 
EL 
HU 

IE 

IT 

LV 

LT 

LU 

MT 
NL 
PL 

PT 

--------- 
--------- 
--------- 

--------- 
--------- 
--------- 

-------------- 

-------------- 

Chamber membership, 
Notification to 
company register 
(estab) 

-------------- 

-------------- 

-------------- 

--------- 
--------- 
--------- 
50% of voting rights 
must be held by 
professionals qualified 
anywhere in the EU + no 
legal persons allowed as 
shareholders 
(estab with title) 
2/3 of voting rights must 
be held by professionals 
qualified anywhere in the 
EU + no legal persons 
allowed as shareholders 
(estab) 
-------------- 

--------- 
--------- 
--------- 

--------- 
--------- 
--------- 

--------- 
--------- 
--------- 

50% of managers must 
be professionals 
qualified anywhere in the 
EU  
(estab with title) 

-------------- 

Yes  
(estab with title) 

-------------- 

-------------- 

Yes 

-------------- 

-------------- 

-------------- 

Company register 
(estab) 

-------------- 

-------------- 

-------------- 

-------------- 

Yes 

Chamber membership 
(estab) 

-------------- 

-------------- 
-------------- 
-------------- 

Chamber membership 
(estab with title) 
Notification to chamber 
 (estab) 

-------------- 
-------------- 
-------------- 

-------------- 

50% + 1 voting rights 
must be held by 
professionals qualified as 
per LU Law + no legal 
persons allowed as 
shareholders  
(estab) 
-------------- 
-------------- 
-------------- 

50% + 1 share must be 
owned by professionals 
qualified anywhere in the 
EU or companies 
established anywhere in 

Majority of managers 
must be professionals 
qualified as per LU Law 
(estab) 

Exclusivity 
 (estab with title) 

-------------- 

-------------- 
-------------- 
-------------- 

-------------- 
-------------- 
Tax advice not allowed 

-------------- 
-------------- 
Yes 

1 executive manager 
must be a professional 
qualified anywhere in the 
EU 
 (estab with title) 

Exclusivity  
(estab with title) 
Legal services not allowed 

Yes  
(temp only if no 
insurance at home) 

161 

 
 
 
 
 
 
 
RO 

SK 
SI 
ES 
SE 

Authorisation (estab) 
Notification  
(temp) 

-------------- 
-------------- 
-------------- 
-------------- 

-------------- 

-------------- 
-------------- 
-------------- 
-------------- 

UK 

-------------- 

-------------- 

the EU under majority 
control by professionals 
(estab with title) 
50% + 1 share must be 
owned by professionals 
qualified as per RO Law 
+ no legal persons 
allowed as shareholders 
(estab) 
-------------- 
-------------- 
-------------- 
-------------- 
50% of voting rights 
must be held by 
professionals established 
in the UK + other shares 
must be owned by 
professionals providing 
services in the UK + no 
legal persons allowed as 
shareholders  
(estab with title) 

Majority of managers 
must be professionals 
qualified as per RO Law 
(estab) 

-------------- 

Yes (estab) 

-------------- 
-------------- 
-------------- 
-------------- 

-------------- 

-------------- 
-------------- 
-------------- 
-------------- 

50% of income must 
derive from public practice 
accountancy services 
(estab with title) 

-------------- 
-------------- 
-------------- 
-------------- 

-------------- 

162 

 
 
163 

 
 
 
 
 
 
Annex 6: Consistency with other EU policies and with the Charter for 
fundamental rights 

There  are  a  number  of  forthcoming  initiatives  of  the  Commission  which  are  related  to  the 
initiatives under analysis here. Consistency with these initiatives is ensured in the following 
way: 

  This initiative aims to implement the once-only principle, currently the object of pilot 

projects run by DG CONNECT; 

  Simplification of formalities regarding documents would follow closely the solutions 
to  be  introduced  under  the  forthcoming  Regulation  on  the  promotion  of  the  free 
movement  of  citizens  by  simplifying  the  requirements  for  presenting  certain  public 
documents in the European Union; 

  Potential  action  to  simplify  formalities  for  declaration  of  posted  workers  shall  be 
without  prejudice  to  the  Electronic  Exchange  of  Social  Security  Information  system 
(EESSI)  to  be  introduced  under  Social  Security  legislation  for  a  variety  of  social 
security formalities, including transmission of A1 forms to host Member States which 
will make use of EESSI;  

  Declarations in advance regarding temporary cross-border provisions as an associated 
procedure  to  the  European  services  e-card  procedure  will  be  made  redundant  as 
European  Professional  Card  procedures  are 
the  amended 
Professional  Qualifications  Directive,  since  there  is  no  need  for  two  EU-level  e-
procedural solutions. Currently, the EPC procedure is only available for applicants in a 
selected  number  of  professions  (nurses,  pharmacists,  physiotherapists,  mountain 
guides  and  real  estate  agents).  No  other  proposals  for  introducing  the  EPC  are 
pending;  

introduced  under 

  The  information  available  via  the  interconnection  of  company  registers  (BRIS), 
currently  ongoing  under  Directive  2009/101/EC,  and  of  insolvency  registers  under 
Regulation (EU) 2015/848 shall also be used for completing the European services e-
card  application  and  for  cross-border  checks  of  information  Notifications  on 
applicable  requirements  under  the  Services  Directive  and  the  forthcoming  Directive 
laying down a notification procedure for authorisations and requirements applicable to 
services  will  be  taken  under  consideration  during  the  implementation  phase  of  the 
card's procedure and afterwards, in order to update the forms and IT functionalities.  
  The  removal  of  existing  disproportionate  regulatory  obstacles  for  certain  regulated 
professional  services  (assessed  for  option  4  of  this  initiative)  through  targeted 
enforcement  action  and  through  the  specific  recommendations  on  reform  needs  for 
Member  States  as  regards  the  regulation  of  seven  professions  (including  engineers, 
architects  and  accountants)  seems  adequate  at  this  stage.  This  guidance  will  address 
the  justification  and  proportionality  of  rules  regulating  the  profession  as  a  whole, 
including  the  requirements  mentioned  in  problem  driver  4.  Its  conclusions  would 
contribute  to  and  frame  the  proportionality  assessment  that  Member  States  will 
perform in the context of the services card procedure under option 2A; 

164 

 
 
 
  This  initiative  will  include  and  integrate  information  elements  regarding  service 
providers  registered  under  the  soon  to  be  expanded  Mini  One  Stop  Shop  for  VAT 
(VAT-MOSS) initiative. 

Regarding the Charter of fundamental rights, several of its provision will be implemented by 
this initiative: 

  Protection of personal data shall be ensured in line with Article 8 of the Charter; 
  The main objective of this initiative is to facilitate the rights of establishment and the 
right  to  provide  services  in  any  Member  State,  as  prescribed  by  Article  15(2)  of  the 
Charter, ensuring no discrimination, even indirect, is in place on grounds of nationality 
(further implementing Article 21(2) of the Charter); 

  The EU-level procedure is envisaged to put in place an impartial, fair and reasonably 
speedy procedure, also in regards to Commission participation, as required by Article 
41 of the Charter; 

  Prohibition of abuse of rights, namely of the freedom to provide service, shall be duly 

considered, as prescribed by Article 54 of the Charter.  

165 

 
 
 
Annex 7: Administrative burden reductions under the different policy 
options 

The purpose of this annex is to provide further details on how the policy options outlined in 
section 5 of the impact assessment would reduce administrative burden for service providers 
going cross-border on a temporary basis or to set up a secondary establishment.  

This  is  done  through  a  number  of  examples  explaining  the  formalities  and  procedural  steps 
that service providers need to undergo today213 in order to enter a specific services market in a 
given  Member  State.  On  the  basis  of  these  descriptions  of  the  current  situation,  the 
simplification impact of the different policy options will be highlighted.   

Firstly, this annex will highlight a number of costs currently faced by service providers when 
going  cross-border  on  the  basis  of  interviews  with  service  providers.  On  this  basis,  a  rough 
estimation of the potential reduction of administrative burden for companies under options 1 
and 2A is made. 

Secondly,  this  annex  will  present  further  qualitative  examples  of  how  the  options  would 
simplify current formalities and procedures. 

1. Quantified impact of administrative burden reduction on the basis of interviews with 
service providers 

This section is based on the above mentioned study on the administrative formalities and costs 
involved in accessing business services markets cross-border (forthcoming). On the basis of 
more  than  50  interviews  with  cross-border  service  providers,  the  study  shows  that  costs  for 
service providers related to administrative formalities can go up to several thousands of EUR. 

In general, service providers report numerous formalities and costs when going cross-border. 
For the purpose of estimating the potential impact of the different policy options in reducing 
these  costs,  we  will  consider  a  few  administrative  formalities  that  were  raised  by  service 
providers in several interviews: 

-  Service  providers  often  need  to  spend  an  important  amount  of  time  on  the 
identification and familiarisation with the requirements in the host Member State. This 
becomes particularly burdensome in situations with more complicated procedures for 
which  there  is  no  easily  understandable  information  available.  This  is  the  case 
specifically in Member States and sectors with different procedures across regions; 
-  They  highlighted  in  several  interviews  that  they  are  required  to  collect  supporting 
documents  from  authorities  in  the  home  Member  State  as  proof  to  complete 
formalities in the host Member State; 

213 The information provided in this Annex is based on the findings of two studies by Ecorys: "Simplification 
and  mutual  recognition  in  the  construction  sector  under  the  Services  Directive"  (2015)  and  "Study  on  the 
administrative formalities and costs involved in accessing markets cross-border", (forthcoming)   

166 

 
 
 
 
                                                 
-  There  is  often  also  a  need  to  collect  internal  company  data  when  completing 
formalities in the host Member State. This includes collecting data/information on the 
shareholders and managers of the company which in some cases requires a great level 
of  detail  (including  for  example  information  on  positions  that  partners  hold  in  other 
firms); 

-  They often are required to translate information and documents in the language of the 
host  Member  State.  In  many  cases,  these  documents/translations  also  need  to  be 
certified.  This  can  represent  important  costs  for  service  providers  in  the  form  of 
external translators and certification procedures; 

-  Service  providers  are  sometimes  still  required  to  submit  documents  in  person  to 

- 

authorities in the host Member State; 
In  most  cases,  service  providers  need  to  complete  forms  of  the  host  member  State. 
These forms can be numerous and complicated; 

-  Finally, authorisation and registration fees need to be paid in many Member States.  

This  overview  does  not  include  a  large  range  of  other  formalities  reported  by  service 
providers.  These  include  for  example  arranging  additional  insurance  coverage,  making  the 
necessary arrangement to adapt to host Member States' rules on legal form and shareholding 
structures, etc. In some cases, managers of the company even need to undergo an examination 
in  the  host  Member  State  and/or  acquire  certain  language  skills.  Costs  can  therefore  run  up 
considerably.  This  explains  why  service  providers  report  costs  of  administrative  formalities 
when going cross-border of up to 10,000 EUR and more.   

Service providers reported a large diversity of situations in the interviews. In some Member 
States and sectors, formalities seem to be relatively easy to understand and complete. In other 
Member  States  complexity  for  service  providers  is  very  high.  Table  1  below  gives  an 
indicative overview for the selected formalities described above of the range of time/costs that 
were highlighted by service providers in the interviews. For example, regarding hours spent 
on "familiarisation with requirements/procedures" some service providers reported that very 
few  efforts  were  needed  (0.5  hours),  whereas  others  reported  that  important  efforts  were 
required  (up  to  20  hours).  For  the  sake  of  this  estimation,  we  identify  a  "medium"  scenario 
which reflects an average level of complexity reported by several service providers.  

To  calculate  costs,  we  take  as  a  reference  the  average  hourly  labour  cost  across  the  EU  as 
reported  under  Eurostat  statistics  for  the  NACE  section  M  ("Professional,  scientific  and 
technical activities"). This shows an average labour cost of 35 EUR/hour across the EU. At 
the same time, service providers in interviews have reported in the majority of cases higher 
labour costs for these formalities mainly due to the fact that mostly senior professionals and 
managers  are  involved  in  them.  We  therefore  take  into  account  40  EUR/hour  as  a  basis  for 
calculating costs.        

Table 1 – Example of costs of selection of administrative formalities 

Administrative obstacle 

Time spent by 
staff of the 

Medium 
scenario 

Costs 

167 

 
 
 
company 
complete 
host 

Familiarisation 
with 
requirements/procedures/etc. 
Collect 
supporting 
documents  from  authorities 
in the home Member State 
internal 
Collect 
to 
information 
formalities 
of 
Member State  
Submit  documents  in  person 
to the host Member State 
Complete  forms  of  the  host 
Member State 
Fees  to  home  and  host  MS 
authorities 
Costs of external translators  

the 

Costs of certification 

Total  

service 
provider or 
costs 

0.5 to 20 hours 

5 hours 

200 EUR 

0.5 to 12 hours 

3 hours 

120 EUR 

0.5 to 40 hours 

10 hours 

400 EUR 

5 to 30 hours 

12 hours 

480 EUR 

0.5 to 40 hours 

9 hours 

360 EUR 

Up to 1000 
EUR and more 
Up to 1000 
EUR and more 
Up to 500 EUR 
and more 

N/A 

N/A 

N/A 

400 EUR 

700 EUR 

500 EUR 

3,160 EUR 

Under policy option 1 (table 2), the host Member State would have to accept the certificate as 
proof of legal establishment in the home Member State. This would reduce somewhat costs 
related to: 

  Translation and certification given the use of multilingual forms but only as regards 
information regarding legal establishment in the home Member State (estimated as 5 
to 10% cost reduction); 

  The  collection  of  supporting  documents  in  the  home  Member  State  would  be 
significantly  simplified  (estimated  as  75%  to  100%  cost  reduction)  given  that  the 
home Member State would use all information already at its disposal ("once-only").  

Nevertheless,  the  service  provider  would  not  get  access  to  the  host  Member  State  market 
through the card procedure. The host Member State would remain free to control compliance 
with  domestic  requirements  applicable  to  activities  on  its  territory  through  its  current 
procedures. As a result, overall costs would be reduced with only about 5 to 10%.  

Table 2 – Impact of option 1 

Administrative obstacle 

Cost 

Estimated impact 
on costs under 
policy option 1 

Explanation 

Familiarisation with 
requirements/procedures/etc. 

200 EUR 

None 

Complexity of procedure in 
the host Member State 

168 

 
 
 
 
 
 
Collect supporting 
documents from authorities 
in the home Member State 

Collect internal company 
information to complete 
formalities of the host 
Member State  
Submit documents in person 
to the host Member State  

Complete forms of the host 
Member State 

Fees to home and host MS 
authorities 
Costs of external translators  

Costs of certification 

Overall 

120 EUR 

- 75% to 100%  (-
90 to 120 EUR) 

400 EUR 

None 

480 EUR 

None 

360 EUR 

None 

would not be affected by 
this option.  
Option 1 would require the 
home Member State to use 
all information at its 
disposal. This would reduce 
significantly these costs.   
Complexity of procedure in 
the host Member State 
would not be affected by 
this option. 
Complexity of procedure in 
the host Member State 
would not be affected by 
this option. 
Complexity of procedure in 
the host Member State 
would not be affected by 
this option. 

400 EUR 

None 

This would not be changed. 

This would be reduced but 
only as regards information 
regarding legal 
establishment in the home 
Member State. 
This would be reduced but 
only as regards information 
regarding legal 
establishment in the home 
Member State. 

700 EUR 

- 5% to 10%  (-35 
to 70 EUR) 

500 EUR 

- 5% to 10%  (-25 
to 50 EUR) 

3,160 EUR 

Reduction of costs 
with about 5% to 
10% (-150 to -240 
EUR) 

Under  policy  2A  (table  3),  more  significant  simplification  effects  would  be  achieved.  It 
introduces a fully electronic procedure with a structured workflow including clear and short 
deadlines. The service provider will be able to use this EU-level procedure to gain access to 
the  host  Member  State.  The  service  provider  will  also  be  actively  supported  by  the  home 
Member State. It reduces significantly the need for supporting documents (and related costs 
for translation and certification) and overall administrative burden: 

  Costs  of  familiarisation  with  requirements/procedures/etc.  will  be  significantly 
reduced as the option would replace the national procedure with a simplified EU-level 
procedure (estimated as 25% to 50% cost reduction); 

169 

 
 
 
 
 
  The impact on costs related to collecting supporting documents from authorities in the 

home Member State will be similar to option 1; 

  Costs  related  translation,  certification,  submitting  documents  in  person  would  be 
completely removed (a conservative estimate of 75% to 100% cost reduction is used); 
  Costs related to collecting internal company information and completing forms will be 

significantly simplified (estimated as 25% to 50% cost reduction). 

Overall, costs would be reduced with about 50% to 75%.  

Table 3 – Impact of option 2A 

Administrative obstacle 

Cost 

Estimated impact 
on costs under 
policy option 2A 

Explanation 

Familiarisation with 
requirements/procedures/etc. 

Collect supporting 
documents from authorities 
in the home Member State 
Collect internal company 
information to complete 
formalities of the host 
Member State  
Submit documents in person 
to the host Member State  
Complete forms of the host 
Member State 

Fees to home and host MS 
authorities 
Costs of external translators  

Costs of certification 

Overall 

Conclusions 

200 EUR 

- 25% to 50%  (-50 
to 100 EUR) 

This option would replace 
the national procedure with 
a simplified EU-level 
procedure. This would 
reduce costs of 
familiarisation significantly.   

120 EUR 

- 75% to 100%  (-
90 to 120 EUR) 

Similar to option 1.    

400 EUR 

- 25% to 50%  (-
100 to 200 EUR) 

480 EUR 

- 75% to 100%  (-
360 to 480 EUR) 

360 EUR 

- 25% to 50%  (-90 
to 180 EUR) 

This option would replace 
the national procedure with 
a simplified EU-level 
procedure. 
These costs would be 
removed. 
This option would replace 
the national procedure with 
a simplified EU-level 
procedure. 

400 EUR 

None 

This would not be changed. 

700 EUR 

500 EUR 

3,160 EUR 

- 75% to 100%  (-
525 to 700 EUR) 
- 75% to 100%  (-
375 to 500 EUR) 
Reduction of costs 
with about 50% to 
75% (-1,590 to -
2,280 EUR) 

These costs would be 
removed. 
These costs would be 
removed. 

The  actual  cost  reductions  related  to  reduced  administrative  burden  will  depend  on  the 
situations  today  which  are  significantly  different  from  one  Member  State  to  the  other. 

170 

 
 
 
 
 
However, on the basis of the indicative examples above it can be estimated that the impact of 
policy option 1 (about 5-10% cost reduction) will be much smaller compared to policy option 
2 (about 50-75% cost reduction). 

2. Further qualitative examples 

2.1. Formalities for temporary cross-border provision of services 

Example 1- Accounting services in Belgium (see table 1 in appendix) 

Current situation 

Currently,  companies  that  want  to  provide  accounting  services  on  a  temporary  basis  in 
Belgium need to undergo a number of formalities. These formalities generate administrative 
complexity for them. First, they need to send a prior notification (with a waiting period) to the 
professional  chamber  of  accountants  each  year.  This  procedure  is  not  electronic  and  it 
requires the company to download the necessary forms and send them (by email or in paper 
format)  to  the  chamber.  The  waiting  period  can  take  up  to  1  month  and  there  is  no  tacit 
approval if the competent authority fails to act. The form needs to be filled out in Dutch or 
French,  leading  to  translation  costs  for  most  companies.  In  addition,  a  range  of  supporting 
evidence  needs  to  be  submitted  (including  proof  of  incorporation,  legal  establishment  and 
insurance coverage). The Belgian Point of Single Contact only provides limited information 
to  service  providers  on  the  details  of  this  procedure  (more  detailed  information  needs  to  be 
obtained from the chamber).  

Second,  the  company  also  needs  to  complete  a  number  of  formalities  related  to  the 
secondment of staff: 

-  A  declaration  in  advance  regarding  the  professional  qualifications  of  the  posted 
professionals.  Also  this  declaration  cannot  be  done  through  electronic  means  and 
requires information to be provided in Dutch or French; 

-  A separate prior notification to a different authority regarding employment conditions 

under the posting of workers rules; 

Situation under the different policy options 

The different policy options (in this case notably options 1, 2A and 3) outlined in section  5 
would simplify many of the above formalities. Table 1 in appendix shows the simplification 
effects generated by the different options (ranging from "+", a slight simplification to "++++", 
a major simplification). 

Under  option  1,  the  company  would  obtain  a  certificate  issued  by  the  home  Member  State 
demonstrating  legal  establishment.  This  would  make  it  easier  for  the  company  to  complete 
host  Member  States'  controls  and  formalities  that  fall  under  the  scope  of  the  Services 
Directive  (in  this  case,  the  prior  notification  to  the  professional  chamber).  For  example, 
translation  costs  would  be  avoided  through  the  multilingual  forms  used  by  the  service 

171 

 
 
 
provider  to  apply  for  the  certificate.  No  supporting  documents  would  be  required  as 
attachments to the certificate.  

Under option 2A, the simplification effects would be larger: 

 

If a service provider requests for a certificate as foreseen, he/she could obtain it within 
5 weeks at most under a system of tacit approval.  

  Once a certificate is granted, it should be valid for the lifetime of the service provider 
in  every  Member  State  the  service  expressed  an  interest  (updated  by  the  service 
provider himself or ex officio through administrative cooperation of Member States). 
When it comes  to  secondment of staff and the necessary  declarations (such as about 
qualifications, allowing for a control of employment conditions) to be sent to the host 
Member State, this could be swiftly organised through a separate module on the basis 
of the certificate already issued to the company concerned.214 Thus, procedures related 
to  secondment  of  staff,  which  are  currently  spread  out  across  different  authorities  in 
the host Member State, would now be centralised under the same IT application.  

Under option 3, some specific simplification effects regarding compliance with the insurance 
requirements  imposed  would  be  achieved.  For  example,  this  option  will  introduce  a 
standardised  certificate  proving  insurance  coverage  in  a  cross-border  context  (reducing 
burden on service providers and authorities).  

Example 2 – Architectural and engineering services in Spain (see table 2 in appendix) 

Current situation 

Currently,  companies  that  want  to  provide  architectural  or  engineering  services  on  a 
temporary basis in Spain need to undergo a number of formalities. First, they need to undergo 
an authorisation procedure (checking legal establishment and insurance in the home Member 
State)  before  being  able  to  provide  services.  The  Spanish  Point  of  Single  Contact  does  not 
offer service provider with a full picture of this procedure and its related requirements. There 
is also no electronic procedure available to complete the formalities. In fact, the application 
needs  to  be  delivered  in  person  or  by  post.  The  deadline  for  the  authorities  to  process  the 
application is one month with a possible extension to two months. If the authority in charge 
fails to act within these deadlines, an authorisation always requires an express decision (i.e., 
no  tacit  approval  applies).  Supporting  documents  need  to  be  submitted  in  a  certified  copy 
format  (showing  proof  of  incorporation,  legal  establishment  and  insurance).  Finally,  all 
information needs to be provided in Spanish including the supporting documents. Translations 
of supporting documents need to be done by a translator certified in Spain.  

214 Providers who hold a European services card would be able to submit a declaration relating to the workers 
that they intend to post through the electronic platform connected to IMI. This alternative would only apply if a 
host Member State has communicated to the Commission that this possibility should be available for the posting 
of workers in its territory. 

172 

 
 
 
                                                 
The procedures on secondment of staff are similar to the ones described in example 1, with 
the  additional  complexity  that  supporting  documents  regarding  professional  qualifications 
need to be presented in a certified copy format together with a certified translation.   

Situation under the different policy options 

Under  option  1,  the  certificate  demonstrating  legal  establishment  would  again  facilitate 
certain  formalities  as  described  in  example  1.  For  example,  the  required  supporting 
documents  sent  to  the  host  Member  State  (proof  of  incorporation,  legal  establishment  and 
insurance) would in principle no longer be needed as they would be covered by the certificate 
issued by the home Member State.  

Under option 2A, there would again be stronger simplification effects. First, the authorisation 
procedure  would  be  replaced  by  a  prior  notification  in  line  with  Art.  16  of  the  Services 
Directive,  checking  prior  establishment  in  the  home  Member  State.  An  electronic  EU  level 
procedure  would  be  put  in  place  with  shorter  deadlines.  Supporting  documents  would  be 
avoided  as  well  as  translation  costs  (given  the  multilingual  forms  to  be  used  by  the  service 
provider).  The  simplification  effects  related  to  secondment  of  staff  would  be  similar  to 
example  1.  In  addition,  supporting  documents  related  to  the  declaration  in  advance  for 
professional qualifications would be accepted in simple copy format. They would not have to 
be translated given the use of descriptions per category of documents and machine-translated 
fields.    

Under option 3, some specific simplification effects regarding compliance with the insurance 
requirements  would  be  achieved.  For  example,  this  option  will  introduce  a  standardised 
certificate proving insurance coverage in a cross-border context (reducing burden on service 
providers and authorities).  

Example 3 – Construction services in Bulgaria (see table 3 in appendix) 

Current situation 

Currently,  companies  that  want  to  provide  construction  services  on  a  temporary  basis  in 
Bulgaria need to undergo a repetition of the same formalities for each construction project.  

A  prior  notification,  with  an  application  form  available  only  in  Bulgarian,  needs  to  be 
accompanied  by  several  documents  demonstrating  legal  establishment  in  the  home  Member 
State  (proof  of  legal  establishment  in  the  home  Member  State,  proof  of  professional  and 
technical  capacity)  and  with  other  documents  detailing  the  envisaged  construction  project 
(copy of building permit, if available, copy of contract to build). 

The Bulgarian Point of Single Contact does not offer service provider with a full picture of 
this procedure and its related requirements. There is also no electronic procedure available to 
complete the formalities. In fact, the application needs to be delivered in person or by post.  

173 

 
 
 
Supporting  documents,  although  acceptable  in  simple  format,  need  to  be  accompanied  by 
translations in original format and certified by a translator registered in Bulgaria. 

The procedures on secondment of staff are similar to the ones described in example 1, with 
the  additional  complexity  that  supporting  documents  regarding  professional  qualifications 
need  to  be  accompanied  by  translations  in  original  format  and  certified  by  a  translator 
registered in Bulgaria. 

Situation under the different policy options 

Under  option  1,  the  certificate  demonstrating  legal  establishment  would  again  facilitate 
certain  formalities  as  described  in  example  1.  For  example,  the  required  supporting 
documents  sent  to  the  host  Member  State  (proof  of  incorporation  and  legal  establishment) 
would in principle no longer be needed as they would be covered by the certificate issued by 
the home Member State.  

Under option 2A, there would again be stronger simplification effects. Supporting documents 
would be avoided as well as translation costs (given the multilingual forms to be used by the 
service provider). The simplification effects related to secondment of staff would be similar to 
example  2.  In  addition,  supporting  documents  related  to  the  declaration  in  advance  for 
professional qualifications would not have to be translated given the use of descriptions per 
category of documents and machine-translated fields.    

Under option 3, some specific simplification effects regarding compliance with the insurance 
requirements  (under  the  building  permit  procedure)  would  be  achieved.  For  example,  this 
option will introduce a standardised certificate proving insurance coverage in a cross-border 
context (reducing burden on service providers and authorities). 

2.2 Formalities for secondary establishment (branches and agencies) 

Example 4 – Accounting services in Austria (see table 4 in appendix) 

Current situation 

Today,  companies  providing  accounting  services  that  want  to  set  up  a  secondary 
establishment in Austria need to complete a range of formalities.  

This includes an authorisation process to obtain a recognition that the company is allowed to 
provide  accounting  services  in  Austria.  In  the  context  of  this  authorisation  procedure,  an 
application  form  needs  to  be  submitted  to  the  Wirtschaftskammer  Österreich.  In  addition,  a 
number of supporting documents need to be provided, including proof of legal establishment 
and  proof  of  the  required  insurance  coverage.  The  service  provider  also  needs  to  submit 
supporting documents  on  controlling  shareholders  and  managers.  This  includes  for  example 
an  identity  proof  (birth  certificate,  marriage  and  divorce  certificates,  certificate  of  name 
change if applicable), a driving licence, a proof of professional qualification which authorises 
to  the  provision  of  accountancy  services,  statements  of  previous  employers,  social  security 

174 

 
 
 
extracts  and  certificates  of  the  relevant  authority  in  the  home  Member  State  regarding  the 
existence of a “special trustworthiness”. There is no electronic procedure to complete all these 
formalities. The procedure takes up to 3 months with no tacit approval. All information needs 
to be translated into German through a translator who should be certified in Austria.   

In  addition,  the  service  provider  needs  to  comply  with  separate  procedures  to  second  staff 
(intra-corporate  transfers)  as  well  as  horizontal  procedures  (such  as  tax  and  social  security 
registrations).  These  involve  separate  authorities  with  no  synergies  between  the  different 
procedures.  

Situation under the different policy options 

Under  option  1,  the  certificate  demonstrating  legal  establishment  would  facilitate  certain 
formalities  as  described  in  example  1.  For  example,  the  required  supporting  documents  to 
accompany the application (proof of incorporation, legal establishment and insurance) would 
in principle no longer be needed as they would be covered by the certificate.  

Under  option  2A,  there  would  again  be  stronger  simplification  effects.  The  authorisation 
procedure would be much simpler for the service provider to complete, also given the rules 
governing  the  procedural  workflow  for  performing  mutual  recognition.  An  electronic  EU 
level procedure would be put in place with shorter deadlines. Instead of waiting three months, 
the service provider would be able to start providing services after 5 to 9 weeks at most, given 
the shorter deadlines foreseen in this initiative (taking advantage of the streamlining effect of 
having an e-procedure at EU level, in which few documents and no translation is required and 
communication between Member States is embedded in the procedural workflow). Supporting 
documents would be avoided as well as translation costs (given the multilingual application 
form to be used). The simplification effects related to secondment of staff would be similar to 
the  examples  above.  There  would  also  be  simplification  effects  (synergies)  related  to  other 
horizontal  procedures  (such  as  tax  and  social  security)  where  the  authorities  would  use  the 
information already contained in the certificate.    

Under  option  3,  some  specific  simplification  effects regarding  insurance  would  be achieved 
similar to example 1. 

Additional examples on architectural and engineering  

Additional examples on the simplification effects obtained under the different policy options 
in  the  case  of  secondary  establishment  for  architectural  and  engineering  are  provided  in 
appendix  (see  tables  5  and  6  in  appendix).  These  effects  are  mostly  similar  to  the  ones 
described in example 4. 

Example 5 – Construction services in Portugal (see table 7 in appendix) 

Current situation 

175 

 
 
 
Currently, companies that want to establish in Portugal to provide construction services need 
to be authorised. 

Application  for  this  authorisation  needs  to  be  accompanied  by  several  documents 
demonstrating  legal  establishment  in  the  home  Member  State,  proof  of  professional  and 
technical capacity (pool of qualified professionals available) and proof of economic/financial 
capacity (corporate turn-over of past years) and/or insurance covering Portuguese territory. 

The Portuguese Point of Single Contact does not offer service providers with a full picture of 
this  procedure  and  its  related  requirements.  There  is  also  no  fully  electronic  procedure 
available to complete the formalities.  

Supporting  documents,  although  acceptable  in  simple  format,  need  to  be  accompanied  by 
translations. 

The procedures on secondment of staff are similar to the ones described in example 4. 

Situation under the different policy options 

Under  option  1,  the  certificate  demonstrating  legal  establishment  would  again  facilitate 
certain  formalities  as  described  in  example  4.  For  example,  the  required  supporting 
documents  sent  to  the  host  Member  State  (proof  of  incorporation  and  legal  establishment) 
would in principle no longer be needed as they would be covered by the certificate issued by 
the home Member State.  

Under  option  2A,  there  would  again  be  stronger  simplification  effects,  meaning  a  much 
simpler and fully electronic procedure, as described in example 4. The simplification effects 
related to secondment of staff would be similar to example 4 as well.  

Under  option  3,  again  as  under  example  4,  some  specific  simplification  effects  regarding 
compliance with the insurance requirements would be achieved. For example, this option will 
introduce  a  standardised  certificate  proving  insurance  coverage  in  a  cross-border  context 
(reducing burden on service providers and authorities). 

176 

 
 
 
 
 
Appendix 

1. Formalities for temporary cross-border provision of services 

Table 1 – Accounting services in Belgium 

Formalities  
and procedural steps today  

Option 1 

Simplificatio
n 
effect 

Option 2A 

Simplificatio
n 
effect 

Option 3 

Simplification 
effect 

Prior Notification with 
waiting period  

(no change) 

Partial information available on 
PSC 

Procedure set at EU-level (for proof 
of establishment) 

Forms downloadable + email 

Electronic procedure (for proof of 
establishment) 

Prior Notification with waiting period 

≈ 

(no change) 

+ 

+ 

Procedure set at EU-level  

+++ 

Electronic procedure 

+++ 

Procedure set at EU-level 
(for proof of insurance) 

Electronic procedure (for 
proof of insurance) 

++ 

++ 

1 month duration 

1 week (for proof of establishment) 

+ 

3/5 weeks at most 

Payment of fees to the host MS 
required (€150) 

Payment of proportionate fees to the 
home MS required (for proof of 
establishment). No fees in host MS.   

- 

Payment of proportionate fees to the 
home MS required 

+ 

+ 

n.a. 

n.a. 

No tacit approval  

n.a. 

Tacit approval 

+++ 

n.a. 

1 year validity 

Unlimited validity in time (for proof 
of establishment) 

Application filled-in by 
applicant in French or Dutch 

Application filled-in by home MS in 
multilingual forms (for proof of 

+ 

+ 

Unlimited validity in time 

+++ 

Unlimited validity in time 
(for proof of insurance) 

++ 

Application filled-in by home MS in 
multilingual forms 

+++ 

n.a. 

177 

 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
before host MS 

establishment) 

Documentation to be supplied 
on: 
- incorporation; 
- legal establishment; 
- insurance in host MS 

Documents in simple copy 
format  

Simple translation of documents 
in any MS 

No documentation required (for 
proof of establishment) 

+ 

+ 

+ 

Certificate issued by home MS replaces 
all required documents 

++++ 

Standardised certificate on 
insurance coverage attached 

++ 

No documentation required 

Certificate on insurance 
coverage in simple copy 
format 

No translation (multilingual 
certificate) 

+++ 

+++ 

Declaration in advance for 
posted professionals  

(no change) 

(no change) 

(no change) 

Forms downloadable + email  

n.a. 

Electronic procedure 

Declaration filled-in by 
applicant in French or Dutch 
before host MS 

n.a. 

Declaration filled-in by applicant in 
multilingual forms 

++ 

++ 

Electronic procedure (for 
proof of insurance) 

Declaration filled-in by 
applicant in multilingual 
forms 

Documents in original format 

n.a. 

Documents in simple copy format  

+++ 

Certificate on insurance 
coverage in simple copy 
format 

++ 

Simple translation of documents 
in any MS 

n.a. 

No translation (description per 
categories of documents and in 
machine-translated fields) 

++ 

No translation (multilingual 
certificate) 

+ 

178 

+ 

+ 

+ 

+ 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Prior notification for posted 
workers (if Member State 
opted for making use of 
possibility to use IMI) 

(no change) 

(no change) 

(no change) 

Declaration filled-in by 
applicant in English, German, 
French or Dutch  

n.a. 

Other horizontal procedures  
(e.g. tax and social security 
registration) 

(no change) 

Declaration filled-in by applicant in 
multilingual forms 

+ 

n.a. 

(no change) 

(no change) 

Applications filled-in by 
applicant in French or Dutch 
before host MS 

n.a. 

Application partially filled-in by host 
MS (making use of certificate issued by 
home MS) 

+ 

n.a. 

Table 2 – Architectural and engineering services in Spain 

ES – Architects and Engineers 
Formalities  
and procedural steps today  

Authorisation 

(no change) 

Option 1 

Simplificatio
n 
effect 

Option 2A 

Simplificatio
n 
effect 

Option 3 

Simplification 
effect 

Prior Notification (with waiting 
period) 

+++ 

(no change) 

179 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Partial information available on 
PSC 

Procedure set at EU-level (for proof 
of establishment) 

No electronic procedure  
(forms downloadable) 

Electronic procedure (for proof of 
establishment) 

+ 

+ 

Procedure set at EU-level  

+++ 

Electronic procedure 

+++ 

Procedure set at EU-level 
(for proof of insurance) 

Electronic procedure (for 
proof of insurance) 

++ 

++ 

1 - 2 months duration 

1 week (for proof of establishment) 

+ 

3/5 weeks at most 

Payment of fees to the host MS 
required 

Payment of proportionate fees to the 
home MS required (for proof of 
establishment). No fees in host MS.   

- 

Payment of proportionate fees to the 
home MS required 

++ 

+ 

n.a. 

n.a. 

No tacit approval  

n.a. 

Tacit approval 

+++ 

n.a. 

Application filled-in by 
applicant in Spanish before host 
MS 

Application filled-in by home MS in 
multilingual forms (for proof of 
establishment) 

+ 

Application filled-in by home MS in 
multilingual forms 

+++ 

n.a. 

Documentation to be supplied 
on: 
- incorporation; 
- legal establishment; 
- insurance in home MS 

Documents in certified copy 
format issued in host MS 
(copies of 
certified/authenticated 
documents issued in home MS) 

No documentation required (for 
proof of establishment) 

+ 

+ 

Certificate issued by home MS replaces 
all required documents 

++++ 

Standardised certificate on 
insurance coverage attached 

++ 

No documentation required 

Certificate on insurance 
coverage in simple copy 
format 

++++ 

++ 

180 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Certified translation of 
documents in host MS 

+ 

++++ 

No translation (multilingual 
certificate) 

++ 

Declaration in advance for 
posted professionals  

(no change) 

(no change) 

(no change) 

No electronic procedure  
(forms downloadable) 

Declaration filled-in by 
applicant in Spanish before host 
MS 

Documents in certified copy 
format issued in host MS 
(copies of 
certified/authenticated 
documents issued in home MS) 

Certified translation of 
documents in host MS 

n.a. 

n.a. 

n.a. 

n.a. 

Electronic procedure 

Declaration filled-in by applicant in 
multilingual forms 

++ 

++ 

Documents in simple copy format  

+++ 

Electronic procedure (for 
proof of insurance) 

Declaration filled-in by 
applicant in multilingual 
forms 

Certificate on insurance 
coverage in simple copy 
format 

+ 

+ 

++ 

No translation (description per 
categories of documents and in 
machine-translated fields) 

+++ 

No translation (multilingual 
certificate) 

++ 

Prior notification for posted 
workers (if Member State 
opted for making use of 
possibility to use IMI) 

(no change) 

(no change) 

(no change) 

Declaration filled-in by 

n.a. 

Declaration filled-in by applicant in 

+ 

n.a. 

181 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
applicant in Spanish  

multilingual forms 

Other horizontal procedures  
(e.g. tax and social security 
registration) 

(no change) 

(no change) 

(no change) 

Applications filled-in by 
applicant in Spanish before host 
MS 

n.a. 

Application partially filled-in by host 
MS (making use of certificate issued by 
home MS) 

+ 

n.a. 

Table 3 – Construction services in Bulgaria 

  BG - Construction 

Formalities  
and procedural steps today  

Multiple prior notification  
(one per building project)  

(no change) 

Option 1 

Simplificatio
n 
effect 

Option 2A 

Simplificatio
n 
effect 

Option 3 

Simplification 
effect 

Prior Notification with waiting period 

++ 

(no change) 

Partial information available on 
PSC 

Procedure set at EU-level (for proof 
of establishment) 

No electronic procedure  
(forms downloadable) 

Electronic procedure (for proof of 
establishment) 

+ 

+ 

Procedure set at EU-level  

+++ 

Electronic procedure 

+++ 

Procedure set at EU-level 
(for proof of insurance) 

Electronic procedure (for 
proof of insurance) 

++ 

++ 

182 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
No reaction required 

1 week (for proof of establishment) 

No fees 

Payment of proportionate fees to the 
home MS required (for proof of 
establishment). No fees in host MS.   

No reaction required  

n.a. 

Validity limited to one building 
project 

Unlimited validity in time (for proof 
of establishment) 

Application filled-in by 
applicant in Bulgarian before 
host MS 

Application filled-in by home MS in 
multilingual forms (for proof of 
establishment) 

Documentation to be supplied 
on: 
- incorporation; 
- legal establishment; 

(+ insurance in host MS in the 
context of the building permit) 

No documentation required (for 
proof of establishment) 

Documents in simple copy 
format  

Certified translation by 
translator registered in BG 

- 

- 

+ 

+ 

+ 

+ 

+ 

3/5 weeks at most 

Payment of proportionate fees to the 
home MS required 

Tacit approval 

-- 

- 

- 

n.a. 

n.a. 

n.a. 

Unlimited validity in time 

+++ 

Unlimited validity in time 
(for proof of insurance) 

++ 

Application filled-in by home MS in 
multilingual forms 

+++ 

n.a. 

Certificate issued by home MS replaces 
all required documents 

++++ 

Standardised certificate on 
insurance coverage attached 

++ 

No documentation required 

Certificate on insurance 
coverage in simple copy 
format 

No translation (multilingual 
certificate) 

+++ 

+++ 

+ 

+ 

183 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Declaration in advance for 
posted professionals 

(no change) 

(no change) 

(no change) 

Forms downloadable + email  

n.a. 

Electronic procedure 

Declaration filled-in by 
applicant in Bulgarian before 
host MS 

Certified translation by 
translator registered in BG 

n.a. 

n.a. 

Declaration filled-in by applicant in 
multilingual forms 

No translation (description per 
categories of documents and in 
machine-translated fields) 

++ 

++ 

++ 

Electronic procedure (for 
proof of insurance) 

Declaration filled-in by 
applicant in multilingual 
forms 

+ 

+ 

No translation (multilingual 
certificate) 

+ 

Prior notification for posted 
workers (if Member State 
opted for making use of 
possibility to use IMI) 

(no change) 

(no change) 

(no change) 

Declaration filled-in by 
applicant in Bulgarian  

n.a. 

Declaration filled-in by applicant in 
multilingual forms 

+ 

n.a. 

Other horizontal procedures  
(e.g. tax and social security 
registration) 

(no change) 

(no change) 

(no change) 

Applications filled-in by 

n.a. 

Application partially filled-in by host 

+ 

n.a. 

184 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
applicant in Bulgarian before 
host MS 

MS (making use of certificate issued by 
home MS) 

- Formalities for secondary establishment (branches and agencies)  

Table 4 – Accounting services in Austria 

AT – Accountants  

Formalities  
and procedural steps today  

Authorisation  
(incl management conditions) 

(no change) 

Option 1 

Simplificatio
n 
effect 

Option 2A 

Simplificatio
n 
effect 

Option 3 

Simplification 
effect 

Authorisation  
(under a procedural  framework for 
assessment of mutual recognition) 

++ 

(no change) 

Some information available on 
PSC 

Procedure set at EU-level (for proof 
of establishment) 

+ 

Procedure set at EU-level  

+++ 

Forms downloadable + email 

Electronic procedure (for proof of 
establishment) 

+ 

Electronic procedure 

+++ 

Procedure set at EU-level 
(for proof of insurance) 

Electronic procedure (for 
proof of insurance) 

++ 

++ 

1 – 3 months duration 

1 week (for proof of establishment) 

+ 

5/9 weeks at most 

Payment of fees to the host MS 
required (around €150) 

Payment of proportionate fees to 
the home MS required (for proof of 
establishment) 

- 

Payment of proportionate fees to the 
home and host MS required 

+ 

≈ 

n.a. 

n.a. 

No tacit approval  

n.a. 

Tacit approval 

+++ 

n.a. 

185 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Application filled-in by 
applicant in German before host 
MS 

Application filled-in by home MS 
in multilingual forms (for proof of 
establishment) 

Documentation to be supplied 
on: 
- incorporation; 
- information on controlling 
shareholders and managers; 
- legal establishment; 
- insurance in host MS 

Documents in simple copy 
format of certified/authenticated 
documents in home MS 

Certified translation of 
documents in any MS 

No documentation required (for 
proof of establishment) 

+ 

+ 

+ 

+ 

Application filled-in by home MS in 
multilingual forms 

+++ 

n.a. 

Certificate issued by home MS replaces 
all required documents 

++++ 

Standardised certificate on 
insurance coverage attached 

++ 

No documentation required 

Certificate on insurance 
coverage in simple copy 
format 

+ 

No translation (multilingual 
certificate) 

+ 

+++ 

+++ 

Declaration in advance for 
posted professionals  

(no change) 

(no change) 

(no change) 

Forms downloadable + email 

n.a. 

Electronic procedure 

Declaration filled-in by 
applicant in German before host 
MS 

n.a. 

Declaration filled-in by applicant in 
multilingual forms 

++ 

++ 

Electronic procedure (for 
proof of insurance) 

Declaration filled-in by 
applicant in multilingual 
forms 

+ 

+ 

186 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Documents in simple copy 
format of certified/authenticated 
documents in home MS 

n.a. 

Certified translation of 
documents in any MS 

n.a. 

Documents in simple copy format  

+++ 

Certificate on insurance 
coverage in simple copy 
format 

++ 

No translation (description per 
categories of documents and in 
machine-translated fields) 

++ 

No translation (multilingual 
certificate) 

+ 

Prior notification for posted 
workers (if Member State 
opted for making use of 
possibility to use IMI) 

(no change) 

(no change) 

(no change) 

Declaration filled-in by 
applicant in 9 languages 
separately for each worker  

n.a. 

Declaration filled-in by applicant in 
multilingual forms 

++ 

n.a. 

Other horizontal procedures  
(e.g. tax and social security 
registration) 

(no change) 

(no change) 

(no change) 

Applications filled-in by 
applicant in German before host 
MS 

n.a. 

Application partially filled-in by host 
MS (making use of certificate) 

+ 

n.a. 

  IT – Architects and Engineers  

Table 5 – Architectural/engineering services in Italy 

187 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Formalities  
and procedural steps today  

Option 1 

Simplificatio
n 
effect 

Option 2A 

Simplificatio
n 
effect 

Option 3 

Simplification 
effect 

Authorisation  
(incl voting rights and 
shareholding conditions) 

(no change) 

Authorisation (under a procedural  
framework for assessment of mutual 
recognition) 

++ 

(no change) 

No information available on 
PSC 

Procedure set at EU-level (for proof 
of establishment) 

+ 

Procedure set at EU-level  

+++ 

No electronic procedure 

Electronic procedure (for proof of 
establishment) 

+ 

Electronic procedure 

1 – 4 months duration 

1 week (for proof of establishment) 

+ 

5/9 weeks at most 

Payment of fees to the host MS 
required  

Payment of proportionate fees to 
the home MS required (for proof of 
establishment) 

- 

Payment of proportionate fees to the 
home and host MS required 

+++ 

++ 

≈ 

Procedure set at EU-level 
(for proof of insurance) 

Electronic procedure (for 
proof of insurance) 

++ 

++ 

n.a. 

n.a. 

No tacit approval  

n.a. 

Tacit approval 

+++ 

n.a. 

Application filled-in by 
applicant in Italian before host 
MS 

Application filled-in by home MS 
in multilingual forms (for proof of 
establishment) 

Documentation to be supplied 
on: 
- incorporation; 
- legal establishment; 
- insurance in host MS 

No documentation required (for 

+ 

+ 

Application filled-in by home MS in 
multilingual forms 

+++ 

n.a. 

Certificate issued by home MS replaces 
all required documents 

++++ 

Standardised certificate on 
insurance coverage attached 

++ 

188 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
proof of establishment) 

Documents in 
certified/authenticated format in 
home MS 

Certified translation of 
documents in host MS 

No documentation required 

+ 

+ 

Certificate on insurance 
coverage in simple copy 
format 

+ 

No translation (multilingual 
certificate) 

+ 

+++ 

+++ 

Declaration in advance for 
posted professionals  

(no change) 

(no change) 

(no change) 

No electronic procedure  

n.a. 

Electronic procedure 

Declaration filled-in by 
applicant in Italian before host 
MS 

n.a. 

Documents in 
certified/authenticated format in 
home MS 

n.a. 

Certified translation of 
documents in host MS 

n.a. 

Declaration filled-in by applicant in 
multilingual forms 

Documents in simple copy format  

+++ 

++ 

++ 

Electronic procedure (for 
proof of insurance) 

Declaration filled-in by 
applicant in multilingual 
forms 

Certificate on insurance 
coverage in simple copy 
format 

+ 

+ 

++ 

No translation (description per 
categories of documents and in 
machine-translated fields) 

++ 

No translation (multilingual 
certificate) 

+ 

Prior notification for posted 
workers (if Member State 
opted for making use of 
possibility to use IMI) 

(no change) 

(no change) 

(no change) 

189 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Declaration filled-in by 
applicant in Italian  

n.a. 

Declaration filled-in by applicant in 
multilingual forms 

+ 

n.a. 

Other horizontal procedures  
(e.g. tax and social security 
registration) 

(no change) 

(no change) 

(no change) 

Applications filled-in by 
applicant in Italian before host 
MS 

n.a. 

Application partially filled-in by host 
MS (making use of certificate) 

+ 

n.a. 

Table 6 – Architectural/engineering services in Germany 

DE – Architects and Engineers 
Formalities  
and procedural steps today  

Authorisation  
to carry reserved title 
(incl legal form, shareholding, 
management and 
multidisciplinary conditions) 

(no change) 

Option 1 

Simplificatio
n 
effect 

Option 2A 

Simplificatio
n 
effect 

Option 3 

Simplification 
effect 

Authorisation to carry reserved title 
(under a procedural  framework for 
assessment of mutual recognition) 

++ 

(no change) 

No information available on 
PSC 

Procedure set at EU-level (for proof 
of establishment) 

+ 

Procedure set at EU-level  

+++ 

Procedure set at EU-level 
(for proof of insurance) 

++ 

No electronic procedure  

Electronic procedure (for proof of 

+ 

Electronic procedure 

+++ 

Electronic procedure (for 

++ 
190 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(forms downloadable) 

establishment) 

proof of insurance) 

3 months 

1 week (for proof of establishment) 

+ 

5/9 weeks at most 

Payment of proportionate fees to the 
home and host MS required 

++ 

≈ 

n.a. 

n.a. 

Payment of fees to the host MS 
required (around €500) 

Payment of proportionate fees to 
the home MS required (for proof of 
establishment) 

Application filled-in by 
applicant in German before host 
MS 

Application filled-in by home MS 
in multilingual forms (for proof of 
establishment) 

Documentation to be supplied 
on: 
- incorporation; 
- information on controlling 
shareholders, managers and 
corporate purpose; 
- legal establishment; 
- insurance in host MS 

Certified/authenticated 
documents in home MS 

Certified translation of 
documents in any MS 

No documentation required (for 
proof of establishment) 

- 

+ 

+ 

+ 

+ 

Application filled-in by home MS in 
multilingual forms 

+++ 

n.a. 

Certificate issued by home MS replaces 
all required documents 

++++ 

Standardised certificate on 
insurance coverage attached 

++ 

No documentation required 

Certificate on insurance 
coverage in simple copy 
format 

No translation (multilingual 
certificate) 

+ 

+ 

+++ 

+++ 

Declaration in advance for 
posted professionals  

(no change) 

(no change) 

(no change) 

191 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
No electronic procedure  
(forms downloadable) 

Declaration filled-in by 
applicant in German before host 
MS 

Certified/authenticated 
documents in home MS 

Certified translation of 
documents in any MS 

n.a. 

n.a. 

n.a. 

n.a. 

Electronic procedure 

Declaration filled-in by applicant in 
multilingual forms 

++ 

++ 

Documents in simple copy format  

+++ 

Electronic procedure (for 
proof of insurance) 

Declaration filled-in by 
applicant in multilingual 
forms 

Certificate on insurance 
coverage in simple copy 
format 

+ 

+ 

++ 

No translation (description per 
categories of documents and in 
machine-translated fields) 

++ 

No translation (multilingual 
certificate) 

+ 

Prior notification for posted 
workers (if Member State 
opted for making use of 
possibility to use IMI) 

(no change) 

(no change) 

(no change) 

Declaration filled-in by 
applicant in German or English 

n.a. 

Declaration filled-in by applicant in 
multilingual forms 

+ 

n.a. 

Other horizontal procedures  
(e.g. tax and social security 
registration) 

(no change) 

(no change) 

(no change) 

Applications filled-in by 
applicant in German before host 

n.a. 

Application partially filled-in by host 
MS (making use of certificate) 

+ 

n.a. 

192 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MS 

Table 7 – Construction services in Portugal 

  PT - Construction 

Formalities  
and procedural steps today  

Authorisation  

(no change) 

Option 1 

Simplificatio
n 
effect 

Option 2A 

Simplificatio
n 
effect 

Option 3 

Simplification 
effect 

Authorisation  
(under a procedural  framework for 
assessment of mutual recognition) 

++ 

(no change) 

Partial information available on 
PSC 

Procedure set at EU-level (for proof 
of establishment) 

Some electronic steps 

(Fully) Electronic procedure (for 
proof of establishment) 

20 days  

1 week (for proof of establishment) 

Fees based on corporate turn-
over 

Payment of proportionate fees to the 
home MS required (for proof of 
establishment). No fees in host MS.   

+ 

+ 

- 

- 

Procedure set at EU-level  

+++ 

Procedure set at EU-level 
(for proof of insurance) 

++ 

(Fully) Electronic procedure 

5/9 weeks at most 

Payment of proportionate fees to the 
home and host MS required 

++ 

- 

++ 

(Fully) Electronic procedure 
(for proof of insurance) 

++ 

n.a. 

n.a. 

Tacit approval 

n.a. 

Tacit approval 

= 

n.a. 

193 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unlimited validity in time 

+++ 

Unlimited validity in time 
(for proof of insurance) 

++ 

Application filled-in by home MS in 
multilingual forms 

+++ 

n.a. 

Certificate issued by home MS replaces 
all required documents 

++++ 

Standardised certificate on 
insurance coverage attached 

++ 

Validity limited to a certain 
period 

Unlimited validity in time (for proof 
of establishment) 

Application filled-in by 
applicant in Portuguese before 
host MS 

Application filled-in by home MS in 
multilingual forms (for proof of 
establishment) 

No documentation required (for 
proof of establishment) 

Documentation to be supplied 
on: 
- incorporation; 
- legal establishment; 
- professional and technical 
capacity; 
- insurance in host MS and/or 
proof of economic/financial 
capacity 

Documents in simple copy 
format  

Translation required 

+ 

+ 

+ 

+ 

+ 

No documentation required 

Certificate on insurance 
coverage in simple copy 
format 

No translation (multilingual 
certificate) 

+++ 

+++ 

Declaration in advance for 
posted professionals 

(no change) 

(no change) 

(no change) 

Forms downloadable + email  

n.a. 

Electronic procedure 

++ 

Electronic procedure (for 
proof of insurance) 

Declaration filled-in by 

n.a. 

Declaration filled-in by applicant in 

++ 

Declaration filled-in by 

+ 

+ 

+ 

+ 

194 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
applicant in Portuguese before 
host MS 

Translation required 

n.a. 

multilingual forms 

applicant in multilingual 
forms 

No translation (description per 
categories of documents and in 
machine-translated fields) 

++ 

No translation (multilingual 
certificate) 

+ 

Prior notification for posted 
workers (if Member State 
opted for making use of 
possibility to use IMI) 

(no change) 

(no change) 

(no change) 

Declaration filled-in by 
applicant in Portuguese 

n.a. 

Declaration filled-in by applicant in 
multilingual forms 

+ 

n.a. 

Other horizontal procedures  
(e.g. tax and social security 
registration) 

(no change) 

(no change) 

(no change) 

195 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annex 8 – Administrative costs for authorities 

An important question in the context of this impact assessment is the potential impact of the 
different policy options on administrative costs for home and host Member States' authorities. 
This annex – which complements section 6 of the impact assessment (analysis of impacts) – 
will look into this by providing additional details on the following questions: 

  What will be the main simplification principles on which the services card would be 

built to ensure costs for Member States' authorities remain limited? 

  What does this mean in terms of potential costs for Member States' administrations 

under the different policy options outlined in section 5? 

Main simplification advantages of the European services e-card 
In  general,  processing  the  proposed  services  card  would  imply  a  shift  in  costs  and 
administrative  burden  from  the  host  to  the  home  Member  State  compared  to  the  situation 
today. Meaning, the home Member State would have to take up certain new responsibilities 
to support service providers that want to expand abroad.  

Nevertheless,  the  set-up  and  maintenance  costs  of  the  system  for  home  and  host  Member 
States will be limited because of the following reasons: 

  The existing Internal Market Information (IMI) system – set up, managed and funded 

by the Commission – would serve as the back office; 

  Member States authorities are already familiar with a similar procedure (for example 

regarding the European Professional Card); 

  The  structured  workflow  in  IMI  (offering  full  legal  protection  to  the  processing  of 
data  of  individual  service  providers)  will  facilitate  the  workload  of  authorities  by 
replacing  conventional  paper  work  by  the  use  of  electronic  procedures.  This  will 
contribute to a reduction in cost and time necessary for the treatment of a request;  
  The  envisaged  procedure  would  build  as  much  as  possible  on  standardisation. 
Potential  communication  between  home  and  host  Member  States  would  be  done 
through standardised, multilingual questions hereby avoiding the need for translation. 

Estimation of potential costs for Member States' authorities 
This section will give some indications of the administrative costs that could be expected for 
Member  States'  authorities  in  their  role  of  coordinating  authority  to  manage  procedures 
related to the issuance of the European services e-card.   

First,  the  results  of  a  discussion  with  Member  States  on  potential  administrative  costs  for 
authorities  will  be  summarised.  Secondly,  the  potential  set-up  costs  for  Member  States  are 
discussed.  Thirdly,  the  operating  costs  for  Member  States  will  be  assessed  on  the  basis  of 
benchmarking with the European Professional Card. Finally, additional points of references 

196 

 
 
 
 
for the operating costs are highlighted on the basis of analysis of the SOLVIT system and a 
concrete Member State example (Estonia).  

1. Opinion of Member States on future administrative costs  

During the expert group meeting on the Services Directive of 12 July 2016, the Commission 
discussed  with  representatives  from  all  Member  States  on  the  roles  and  responsibilities  of 
authorities under the European services e-card and the potential costs that this would entail 
for the national administrations. The main conclusions from that meeting were the following: 

 

IMI  should  serve  as  a  basis  for  communication/cooperation  between  different 
coordinating  authorities.  There  is  no  need  to  launch  any  new  structures.  This  also 
reflects  previous  discussions  between  Member  States  within  the  Competitiveness 
Council in February 2016215; 

  Member  States  highlighted  that  the  coordinating  authority  could  be  different 
depending on whether it is appointed/acting as home or host Member State authority. 
In some cases, it may be necessary to have a coordinating authority at regional level; 
  Several  Member  States  pointed  out  that  it  is  impossible  to  ascertain  administrative 
costs as long as the competences of such authorities and procedural workflows have 
not been clearly agreed with Member States.  

In conclusion, Member States' authorities are at this stage unable to give reliable estimates on 
the  potential  costs  to  set  up  and  operate  as  coordinating  authorities  under  the  European 
services e-card. This is in line with previous policy actions by the Commission  such as the 
European Professional Card where Member States were also unable to provide reliable cost 
estimates of administrative costs during the preparatory phase of the initiative.216 

2. Set-up costs for Member States' authorities 

For  the  set-up  costs,  an  analysis  was  carried  out  of  a  range  of  different  existing  systems 
which are (to some extent) comparable to the European services e-card: 

  The European Professional Card; 
  The  SOLVIT  network  of  national  centres  (requests  for  information  and  disputes 

regarding the implementation of EU law by other Member States); 

  The  RAPEX  system  (used  for  the  rapid  exchange  of  information  between  national 
authorities  and  the  European  Commission  on  dangerous  products  found  on  the 
market).  

215  See  conclusions  of  the  Competitiveness  Council  under  http://data.consilium.europa.eu/doc/document/ST-
6622-2016-INIT/en/pdf:.  Point  12  thereof  reads  as  follows:  :  STRESSES  that  the  Passport  should  build  on 
existing structures and instruments, have a voluntary nature for service providers, use electronic means to the 
widest extent possible and does not lead to additional administrative burdens for public administrations 
216  See  European  Commission,  SWD  Accompanying  the  document  "Commission's  Implementing  Regulation 
(EU) No 2015/983 on the procedure for issuance of the European Professional Card and the alert mechanism, 
2015  

197 

 
 
 
                                                 
However,  for  none  of  these  cases  data  is  available  allowing  for  a  possible  estimate  of  the 
costs that were incurred by the Member States to set up these systems.  

An estimation carried out by the Estonian Ministry of Economic Affairs confirms that the set-
up costs of the European services e-card would remain limited. They assessed that given the 
availability  of  the  IMI  system,  the  set-up  costs  would  involve  setting  up  a  system  of 
cooperation between different competent authorities in the Member State. This requires staff 
time and some IT costs, which are however assessed as limited (less than 25,000 EUR).  

3. Operating costs for Member States' authorities based on EPC experience 

The  European  Professional  Card  (EPC)  is  an  electronic  procedure  that  professionals  going 
cross-border  can  use  to  have  their  professional  qualifications  recognised  in  another  EU 
country.  It  was  introduced  on  the  basis  of  an  implementing  act217  and  started  to  operate  in 
January  2016.  For  the  moment,  the  EPC  procedure  is  only  available  for  applicants  in  a 
selected  number  of  professions  (nurses,  pharmacists,  physiotherapists,  mountain  guides  and 
real estate agents).  

Methodology 

Given that Member States' authorities are at this stage not able to provide reliable estimates 
on  operating  costs,  it  is  very  difficult  to  assess  them  departing  from  a  baseline  scenario. 
Therefore, the costs for Member States' authorities of the different policy options outlined in 
the impact  assessment  (section  5)  will  be  estimated  on the  basis  of the  experience  with the 
EPC. 

The EPC is chosen as a basis for the estimation given that it is comparable to the initiative 
under  assessment.  As  with  the  proposed  European  services  e-card,  the  home  country 
authorities  assist  the  applicant  with  their  EPC  application  and  check  that  it  is  correct  and 
complete. They also certify the authenticity and validity of supporting documents.218 At the 
same time, there are also important differences between the European services e-card (under 
the  different  policy  options)  and  the  EPC,  which  will  be  highlighted.  For  example,  the 
number  of  authorities  and  requirements  involved  in  the  European  services  e-card  would  in 
general be higher than the one(s) involved in the EPC. This implies amongst others additional 
costs of coordination within each Member State (which will vary depending on its regional 
and administrative structure).  

The  estimation  will  focus  on  policy  options  1  and  2A  outlined  in  section  5  of  the  impact 
assessment.  A  differentiation  will  be  made  under  policy  option  2A  regarding  temporary 
cross-border  provision  and  secondary  establishment.  Options  2B,  3  and  4  do  not  entail 
significant additional costs for authorities. 

217 Commission Implementing Regulation 2015/983 of 24/6/2015, OJ L 159, 25.6.2015  
218    Limited  however  to  documents  required  and  listed  up  under  the  Professional  Qualifications  Directive,  in 
particular Articles 7 (2) and 50 in conjunction with Annex VII). 

198 

 
 
 
                                                 
The estimation of the administrative costs on the basis of the EPC experience will be done in 
the following way: 

1.  Calculate the average fees charged under EPC separately by the home and by the host 

Member States; 

2.  Estimate the total number of EPC applications based on the figures already available 

for the first half of 2016; 

3.  Compare the workflows under EPC to the workflows under the policy options to be 
assessed  (1  and  2A)  in  terms  of  administrative  tasks  involved.  On  the  basis  of  this 
comparison,  establish  coefficients  in  percentage  terms  of  whether  the  European 
services e-card workflow will be more or less burdensome; 

4.  Estimate the expected number of applications under each of the policy options (1 and 
2A).  To  mitigate  the  uncertainty  in  this  regard,  a  range  of  expected  number  of 
applications (minimum, maximum) under the different policy options will be used;  
5.  On the basis of average fees established in step 1 and coefficients established in step 
3,  calculate  the  expected  average  costs  per  application  for  home  and  host  Member 
State under each policy option; 

6.  On  the  basis  of  the  expected  applications  (step  4)  and  average  cost  per  application 
(step 5), calculate the expected operating costs incurred by the Member States under 
each policy option. 

7.  Perform a robustness check of the estimations by comparing the results to an analysis 

using the maximum fees charged under the EPC. 

There are some important limitations regarding this methodology that should be highlighted: 

  The  actual  costs  incurred  by  authorities  under  the  EPC  system  are  not  known.  The 
estimations will therefore be done on the basis of the fees that Member States charge 
to  users  (see  below).  While  these  fees  should  reflect  the  cost  of  the  procedure,  one 
cannot discard that they fees might not (in all cases) be a fully accurate estimate for 
the actual costs incurred by authorities; 

  An  estimation  will  be  done  of  the  expected  number  of  applications  to  be  received 
under the different policy options. These are however uncertain and hence difficult to 
estimate.  To  mitigate  this,  a  range  of  expected  number  of  applications  (minimum, 
maximum) under the different policy options will be used;  

  The  estimation  will  be  based  on  EU  averages.  However,  there  might  be  strong 
differences  regarding  operating  costs  between  Member  States.  For  example,  (host) 
Member States with high levels of regulation could require more activities/costs under 
policy  option  2A.  Also,  Member  States  with  regional  authorities  (rather  than  one 
centralised national authority) might also have higher costs overall.    

Step 1: Fees charged by Member States under the EPC 

199 

 
 
 
Both home and host Member States are allowed to charge fees to professionals applying for 
the  EPC.  These  fees  have  been  notified  by  several  Member  States  to  the  Commission219. 
They  differ  across  Member  States  and  within  a  given  Member  State  across  professions.  In 
addition, they can also differ in the same Member State and profession depending on the role 
of the coordinating authority (home or host Member State).   

The  tables  below  show  the  averages  of  fees  per  profession  charged  by  home  and  host 
Member States (in the cases of establishment and temporary cross-border provision). These 
averages have been calculated in the following way220: 

-  Member  States  which  have  not  notified  any  fees  or  which  do  not  charge  fees  are 

- 

excluded221; 
In case Member States notified a fee range (i.e., a minimum and maximum fee which 
they  can  charge  to  professionals),  the  average  of  this  range  has  been  taken  into 
account; 

-  A  simple  average  per  Member  State  has  been  taken  into  account  for  those  Member 

States which charge different fees in different regions.   

Average home Member State fees – establishment (EUR) 

Mountain guide 
Pharmacist 
Physiotherapist 
Nurse responsible for general care 
Real estate agent 
Average 

72 
86 
77 
87 
112 
87 

Average home Member State fees – temporary cross-border provision (EUR) 

Mountain guide 
Pharmacist 
Physiotherapist 
Nurse responsible for general care 
Real estate agent 
Average 

50 
120 
72 
91 
102 
87 

Average host Member State fees – establishment (EUR) 

Mountain guide 
Pharmacist 
Physiotherapist 
Nurse responsible for general care 

138 
198 
158 
134 

on 

are 

available 

219  They 
http://europa.eu/youreurope/citizens/work/professional-
qualifications/european-professional-card/index_en.htm.  Some  Member  States  have  not  yet  notified  their  fees. 
These fees are not part of the EU framework regulating the introduction of the EPC.  
220 Fees notified to the Commission in national currency have been converted to EUR.  
221 Across the 5 professions, 26 Member States have notified fees. 

this  website: 

200 

 
 
 
  
 
                                                 
Real estate agent 
Average 

196 
165 

Average host Member State fees – temporary cross-border provision (EUR)222 

Mountain guide 
Pharmacist 
Physiotherapist 
Nurse responsible for general care 
Average 

143 
227 
166 
129 
166 

This shows that fees charged differ significantly on whether the Member State acts as home 
or  host  Member  State.  Nevertheless,  they  do  not  differ  significantly  between  cases  of 
secondary establishment or temporary cross-border provision of services by the professionals 
concerned.  

For  the  purpose  of  estimating  potential  costs  for  authorities  to  operate  the  procedures  for 
issuing the certificate proposed under this impact assessment, we consider as a starting point 
that  these  EPC  fees  are  a  proxy  of  the  actual  costs  faced  by  authorities  to  complete  the 
required  EPC  procedures.  We  therefore  consider  the  costs  per  EPC  application  for  home 
Member States to be 87 EUR and 165 EUR for host Member States.  It is not excluded that 
the  actual  costs  will  be  different  in  cases  of  temporary  cross-border  provision  versus 
secondary  establishment.  However,  this  distinction  is  not  made  given  that  the  EPC  fees  do 
not differ considerably in both situations and due to lack of alternative information.  

Step 2: Number of EPC applications 

The  EPC  has  started  its  operations  in  January  2016.  About  1250  applications  have  been 
submitted by professionals over the first 6 months of the year. One can therefore expect about 
2500 EPC applications per year. At the same time, many of the applications (more than 27%) 
have been withdrawn by the professionals before reaching their final stage. The reasons are 
change  of  interests  but  also  the  need  for  provision  of  documents  and  translations  of  such 
documents.      

Step 3: Estimation of administrative costs for national authorities to operate the card 

On the basis of the above, estimations can be made on the potential costs for Member States' 
authorities  to  operate the  proposed certificate. These  estimations  however  need  to  take  into 
account the differences between the different policy options of the European services e-card 
which  have  been  outlined  in  section  5  of  the  impact  assessment  as  these  policy  options 
require more or less work of home and host Member State's authorities compared to the EPC.  

Policy option 1 will require more work from home Member States' authorities compared to 
the EPC for the following reasons: 

222 No fees have so far been notified for real estate agents.  

201 

 
 
 
 
 
                                                 
-  The  home  Member  State'  authorities  issue  a  certificate/card  to  the  service  provider 
demonstrating  legal  establishment  in  the  home  Member  State.  This  task  is  fairly 
similar  to  the  EPC  dimension  of  attesting  legal  establishment  in  the  home  Member 
State. However, it will require more work compared to the EPC given that its scope is 
larger (including legal persons); 

-  A coordinating authority in the home Member State would be the single interlocutor 
for  the  service  provider  and  would  ensure  information  flows  between  relevant 
authorities. This will require more coordination efforts between national and regional 
authorities  compared  to  the  EPC  given  the  larger  number  of  competent  authorities 
included, also because legal persons are now included; 

-  Under  the  proposed  certificate,  the  competent  authority  in  the  home  Member  State 
would also be required to use information previously made available to other national 
authorities  unless  specific  national  laws  (tax  secrecy,  data  protection)  prevents  such 
data  processing  –  this  is  a  new  task  and  cost  in  contrast  to  the  EPC,  however  some 
cost savings would come from the interconnection of business registers as from mid-
2017.  

At  the  same  time,  policy  option  1  will  require  significantly  less  work  from  host  Member 
States'  authorities  compared  to  the  EPC.  In  fact,  the  only  activity  required  by  the  host 
Member State would be to notify relevant sanctions in relation to the service provider (after 
the issuance of such certificate). This is overall a much lower effort compared to the activities 
required by the host Member State under the EPC, which have no equivalent in policy option 
1.  

The differences between policy option 1 and the EPC are summarised in the table below. 

MS 

Home 
MS 

European services e-card 
tasks 
(option 1) 
of 

Attestation 
legal 
establishment  for  natural  and 
legal persons 
Coordination  with  relevant 
authorities  for  all  relevant 
issues  for  legal  establishment 
of  both  natural  and 
legal 
persons 
of 
use 
Obtain/make 
information 
previously 
available  to  all  authorities  in 
all levels of government 

Host 
MS 

n.a. 

n.a. 

MS 

Home 
MS 

Compared 
work/cost 

>> 

>> 

EPC tasks  
(temporary cross-
border) 
of 

legal 
for 

Attestation 
establishment 
professionals 
Coordination with relevant 
authorities for professional 
qualification 
of 
professionals  and  closely 
related issues 

> 

n.a. 

<< 

< 

Verification  of  the  EPC 
declarations  submitted  by 
the home MS 
for 
Request 
information 

additional 
as 
such 

Host 
MS 

202 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
n.a. 

information 
establishment 

on 

legal 

<< 

Compensation  measures 
for professions with health 
and safety implications 

Policy option 2A (temporary cross-border provision) will require more work from home 
Member States' authorities compared to option 1 (and therefore also compared to the EPC). 
For example, regarding supporting documents, the home Member State would be required to 
provide  summary  information  to  the  host  Member  State  through  IMI  (in  order  to  avoid 
translation as much as possible). 

Policy option 2A (temporary cross-border provision) will also require some additional work 
from host Member States' authorities compared to option 1 but still less than under the EPC 
given that: 

-  They will be required to make available details on which domestic law the incoming 
service  provider  has  to  respect.  In  addition,  the  host  Member  State  will  have  to 
consider whether a specific entry control scheme is exceptionally required (in which 
case  it  objects  to  issuing  the  card).  This  is  however  still  significantly  less  effort 
compared to the activities of the host Member State under the EPC, where it controls 
on  legal  establishment  in  the  home  Member  State  (which,  under  the  European 
services e-card, is entirely transferred to the home Member State); 

-  Moreover,  under  the  EPC  there  are  more  complex  declarations  on  professional 
qualifications,  requiring  a  sort  of  compensation  measures  imposed  by  the  host 
Member State. 

The differences between policy option 2A and the EPC are summarised in the table below. 

MS 

Home 
MS 

European services e-card 
tasks 
(option 2A - temporary 
cross-border provision) 

of 

Attestation 
legal 
establishment  for  natural  and 
legal persons 
Coordination  with  relevant 
authorities  for  all  relevant 
issues  for  legal  establishment 
legal 
of  both  natural  and 
persons 
use 
of 
Obtain/make 
previously 
information 
available  to  all  authorities  in 

Compared 
work/cost 

EPC tasks  
(temporary cross-
border) 

>> 

>> 

of 

legal 
for 

Attestation 
establishment 
professionals 
Coordination with relevant 
authorities for professional 
qualification 
of 
professionals  and  closely 
related issues 

> 

n.a. 

MS 

Home 
MS 

203 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Host 
MS 

supporting 

information 

all levels of government 
Describe 
documents 
on 
Provide 
applicable  requirements.    In 
exceptional  cases  object  to 
issuance of the card. 
Request 
information 
information 
establishment  

additional 
as 
legal 

such 
on 

for 

>> 

n.a. 

< 

≈ 

Verification  of  the  EPC 
declarations  submitted  by 
the home MS 

Host 
MS 

for 

Request 
information 
information 
establishment 

additional 
such 
as 
legal 
on 

n.a. 

<< 

Compensation  measures 
for professions with health 
and safety implications 

Policy  option  2A  (secondary  establishment)  will  require  essentially  the  same  work  from 
home Member States' authorities as under option 2A.  

This  option  will  however  require  significantly  more  work  for  the  host  Member  State 
compared  to  option  2A  (temporary  cross-border  provision)  given  the  assessment  of 
compliance with entry conditions on a case-by-case basis under this option. Even comparing 
to the EPC, option 2A (secondary establishment)  would be more heavy for the host Member 
State  given  that  this  assessment  would  be  intrinsically  more  complex  than  devising 
compensation measures under the EPC given the wider spectrum of possibilities at play (the 
compensation  measures  can  only  include  either  internships,  undergoing  examinations  or 
both).    

Policy  option  3  and  its  different  sub-options  will  not  fundamentally  change  the 
administrative costs for home or host Member States' authorities compared to what has been 
described above.  

Policy option 4 will also not entail any direct administrative costs for authorities. 

The table below summarizes the information above showing how the different policy options 
compare to the functioning of the EPC and to each other. It indicates in particular where more 
or less efforts would be required by home and host Member States' authorities. 

Policy option 1 

More compared to EPC 

Efforts  required 
by 
home 
Member State 
Efforts  required  Significantly 

option 

2A 

option 

Policy 
2A 
(temporary  cross-border 
provision) 
Significantly 
compared 
option 1) 

more 
(and 

to  EPC 

Policy 
(secondary 
establishment) 
Similar 
(temporary 
provision)  

to  option  2A 
cross-border 

less  Less compared to EPC (but  More  compared  to  EPC 

204 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
by  host  Member 
State 

compared to EPC. No costs 
prior to issuing a certificate 

more than option 1) 

significantly  more 
(and 
than  options  1  and  2A 
temporary 
cross-border 
provision) 

On the basis of the above comparison of the efforts required by authorities under the different 
policy  options  in  comparison  to  the  EPC,  an  estimation  has  been  can  be  made  on  the 
operating costs that the different policy options under this initiative would entail.   

First, we will estimate the cost per card application on the basis of the above EPC fees, taking 
into account whether the activities for home and host Member States' authorities – under the 
different  policy  options  –  are  considered  more  or  less  intensive  compared  to  the  EPC.  The 
following  assumptions  are  used  on  the  basis  of  the  comparisons  with  the  EPC  presented 
above: 

Policy option 1 

option 

Policy 
2A 
(temporary  cross-border 
provision) 

option 

Policy 
(secondary 
establishment) 

2A 

+ 25% 

+ 50% 

+ 50% 

- 90% 

- 75% 

+ 50% 

Costs  for  home 
Member  States 
compared  to  the 
EPC 
Costs 
for  host 
Member  States 
compared  to  the 
EPC 

On the basis of the above estimated costs per EPC application (87  EUR for home Member 
State and 165 EUR for host Member State), this means the following in terms of cost per card 
application (rounded estimations): 

Policy option 1 

option 

Policy 
2A 
(temporary  cross-border 
provision) 

option 

Policy 
(secondary 
establishment) 

2A 

~110 EUR 

~130 EUR 

~130 EUR 

~20 EUR 

~40 EUR 

~250 EUR 

Cost  for  home 
Member  States 
per application 
Costs 
for  host 
Member  States 
per application 

Step 4: Estimation of the number of applications under each policy option 

For the purpose of this estimation we consider that the number of applications per year will 
be the following: 

  For option 1: Similar to the EPC (about 2,500 per year). Although the scope of sectors 
covered  by  the  certificate  under  this  impact  assessment  is  broader  than  that  of  the 
205 

 
 
 
 
 
 
 
scope of the EPC, the number of applications per sector might be lower given that the 
European  services  e-card  under  this  option  would  present  only  limited  benefits  for 
service  providers.  It  is  however  not  excluded  that  the  applications  will  grow  over 
time. Overall, it is difficult to estimate the exact number of applications that will be 
received by Member States. We therefore consider a range of 1,500 to 3,500 per year 
for the purpose of this exercise;  

  For option 2A (temporary cross-border provision and secondary establishment): More 
than the EPC. The scope of this option in terms of sectors covered is the same is in 
option 1. Nevertheless, a larger number of applications would be expected. First, this 
option  also  covers  formalities  related  to  posting  of  workers.  The  number  of  posted 
workers  in  the  EU  has  increased  by  almost  45%  between  2010  and  2014223  and  is 
expected to grow even further. Second, the usefulness of the European services e-card 
for service providers is larger given that the information contained in it would also be 
used when a service provider needs an authorisation or registration in a host Member 
State  outside  the  scope  of  the  Services  Directive.  Finally,  this  European  services  e-
card would allow the service provider to actually gain access to the market in the host 
Member  State.    For  the  purpose  of  this  estimation,  we  consider  that  the  number  of 
applications  would  be  double  compared  to  option  1  (3,000  to  7,000  per  year).  In 
addition,  the  assumption  is  taken  that  half  of  these  applications  would  be  for 
temporary cross-border provision and the other half for secondary establishment.  

Steps 5-6: Calculation of the total operating costs for Member States' authorities 

On this basis, the total operating cost for Member States' authorities per year can be estimated 
as follows for the different policy options: 

Policy option 1 

option 

2A 
Policy 
(temporary  cross-border 
provision) 

option 

Policy 
(secondary 
establishment) 

2A 

165,000-385,000 EUR 

195,000-455,000 EUR 

195,000-455,000 EUR 

30,000-70,0000 EUR 

60,000-140,000 EUR 

375,000-875,000 EUR 

195,000-455,000 EUR 

825,000-1,925,000 EUR 

6,964-16,250 EUR 

29,464-68,750 EUR 

Total  cost 
for 
home  Member 
State  
Total  cost 
for 
host  Member 
State 
per 
application 
Total  cost  (EU 
wide) 
Total cost / 28 

Hence, total administrative costs at EU level for authorities under option 1 would range from 
195,000  to  455,000  EUR.  Under  option  2A  they  would  range  from  825,000  to  1,925,000 
EUR.  

223 In 2014 there were 1.9 million postings in the EU, up from 1.3 million in 2010 and 1.7 million in 2013. 

206 

 
 
 
 
 
                                                 
Step  7:    Robustness  check  of  estimations:  comparison  with  the  analysis  using  maximum 
fees charged by Member States under the EPC 

The purpose of this section is to assess the robustness of the above estimations of costs for 
Member States' authorities. 

The above estimations took into account the overall average of the average  fees charged by 
Member States under each of the professions of the EPC (87 EUR for home Member States 
and 165 for host Member States). This is likely the most representative way to calculate what 
the  average  cost  is  for  authorities  to  operate  the  EPC  procedures.  Nevertheless,  these  fees 
might  not  (in  all  cases)  be  a  fully  accurate  estimate  for  the  actual  costs  incurred  by 
authorities. 

An alternative would be to take into account the maximum fees charged by Member States 
under each of the professions of the EPC. Meaning, an average is calculated on the basis of 
those  Member  States  that  charge  the  highest  fees  per  profession.  It  is  very  likely  that  this 
calculation presents an over-estimate of the actual average costs for authorities. Nevertheless, 
it is presented here as a reference and a potential maximum cost for authorities to operate the 
European services e-card.    

On the basis of this approach, the (maximum) cost per EPC application is about 190 EUR for 
home  Member  States  and  about  425  EUR  for  host  Member  States.  This  would  mean  the 
following in terms of cost per card application (rounded estimations): 

Policy option 1 

option 

2A 
Policy 
(temporary  cross-border 
provision) 

option 

Policy 
(secondary 
establishment) 

2A 

~240 EUR 

~285 EUR 

~285 EUR 

~45 EUR 

~105 EUR 

~640 EUR 

Cost  for  home 
Member  States 
per application 
Costs 
for  host 
Member  States 
per application 

On  this  basis,  the  total  administrative  cost  for  Member  States'  authorities  per  year  can  be 
estimated as follows for the different policy options (leaving the assumptions on number of 
applications unchanged): 

for 
Total  cost 
home  Member 
State  
Total  cost 
for 
host  Member 
per 
State 

Policy option 1 

option 

2A 
Policy 
(temporary  cross-border 
provision) 

option 

Policy 
(secondary 
establishment) 

2A 

360,000-840,000 EUR 

427,500-997,500 EUR 

427,500-997,500 EUR 

67,500-157,500 EUR 

157,500-367,500 EUR 

960,000-2,240,000 EUR 

207 

 
 
 
 
 
 
application 
Total  cost  (EU 
wide) 
Total cost / 28 

427,500-997,500 EUR 

1,972,500-4,602,500 EUR 

15,268-35,625 EUR 

70,446-164,375 EUR 

These  costs  are  obviously  higher  than  the  ones  estimated  using  average  fees.  At  the  same 
time, under none of the scenarios total costs would exceed 5 million EUR for the whole EU 
or 200,000 EUR on average per Member State.  

4. Operating costs for Member States' authorities – SOLVIT benchmark 

The SOLVIT system is used in order to estimate an alternative benchmark for the operating 
costs of Member States' authorities. This is done on the basis of the number of staff in terms 
of FTEs working in each national SOLVIT centre224. Each centre simultaneously functions as 
a  host  and  as  a  lead  centre,  therefore  these  staff  figures  correspond  to  both  stages  of  the 
procedure.  On  the  basis  of  the  staff  numbers  for  each  national  centre  and  using  the  total 
hourly  average  labour  cost  in  each  Member  State225226,  an  estimation  is  made  of  the  total 
operational costs of the SOLVIT network to the Member States' authorities.  

Member 
State 

Austria 
Belgium 
Bulgaria 
Croatia 
Cyprus 
Czech 
Republic 
Denmark 
Estonia 
Finland 
France 
Germany 
Greece 
Hungary 
Ireland 

FTEs 
for 
SOLVIT 
national 
centre 
3.4 
2.8 
1.6 
1.5 
2.5 

2 
0.7 
0.5 
0.6 
2.3 
2.8 
2.1 
2 
1.3 

Average 
hourly 
labour 
cost 
(EUR) 

Average 
annual 
labour 
cost per 
FTE 

Estimated 
annual 
cost of the 
centre 

€32.40 
€39.10 
€4.08 
€9.58 
€15.62 

€9.88 
€41.31 
€10.35 
€32.96 
€35.08 
€32.19 
€14.49 
€7.52 
€30.00 

€57,218 
€69,051 
€7,205 
€16,918 
€27,585 

€17,448 
€72,953 
€18,278 
€58,207 
€61,951 
€56,848 
€25,589 
€13,280 
€52,980 

€194,543 
€193,342 
€11,528 
€25,377 
€68,962 

€34,896 
€51,067 
€9,139 
€34,924 
€142,488 
€159,173 
€53,738 
€26,561 
€68,874 

See 

224 
SOLVIT 
http://ec.europa.eu/internal_market/scoreboard/performance_by_governance_tool/solvit/index_en.htm 
225 
explained/index.php/Wages_and_labour_costs 
226  Assuming  also  1,766  working  hours  per  year.  Based  on  data  taken  from  OECD  website,  see 
http://stats.oecd.org/Index.aspx?DataSetCode=ANHRS 

http://ec.europa.eu/eurostat/statistics-

Eurostat, 

website 

service 

taken 

from 

Data 

see 

208 

 
 
 
 
 
                                                 
Italy 
Latvia 
Lithuania 
Luxembourg 
Malta 
Netherlands 
Poland 
Portugal 
Romania 
Slovakia 
Slovenia 
Spain 
Sweden 
United 
Kingdom 
TOTAL 

3.3 
0.3 
1.7 
1 
1 
3 
3.3 
3 
1.8 
2.5 
1 
3.2 
4 

1.2 

€28.09 
€7.06 
€6.83 
€36.18 
€13.02 
€34.08 
€8.62 
€13.21 
€5.00 
€10.05 
€15.76 
€21.21 
€37.37 

€49,607 
€12,468 
€12,062 
€63,894 
€22,993 
€60,185 
€15,223 
€23,329 
€8,830 
€17,748 
€27,832 
€37,457 
€65,995 

€163,703 
€3,740 
€20,505 
€63,894 
€22,993 
€180,556 
€50,236 
€69,987 
€15,894 
€44,371 
€27,832 
€119,862 
€263,982 

€25.72 

€45,422 

€54,506 
€2,176,673 

The  total  operational  costs  equal  about  2  million  EUR.  Although  there  would  be  important 
differences  between  the  European  services  e-card  and  the  SOLVIT  system,  this  analysis 
provides another useful reference which shows similar costs for Member States' authorities as 
under the EPC analysis above (around 2 million EUR, EU-wide). 

5.  Operating  costs  for  Member  States'  authorities  –  Case  study  on  a  potential 
European services e-card carried out by the Estonian Ministry of Economic Affairs 

In  the  context  of  the  stakeholder  conference  organised  carried  out  by  the  Commission  in 
September 2016, the Estonian Ministry of Economic Affairs carried out a simulation of how 
they could introduce and operate a European services e-card, similar to policy option 1.  

The  conclusion  of  this  simulation  and  further  discussions  with  the  Commission  was  that  it 
would imply very limited costs for Estonian authorities: 

  There would be some initial set-up costs, which would however remain limited; 
 

In case there is a full automatic connection between different databases, it would not 
take  the  home  Member  State  authority  longer  than  5-10  minutes  to  process  an 
application for a European services e-card. This would represent only minor costs; 
In  case  certain  information  needs  to  be  gathered  by  the  authorities  from  electronic 
sources,  it  would  take  longer  to  process  an  application  (around  1,5  hours  per 
application). On average, costs for the home Member State would be around 12 EUR 
per  application  (1,5  hours/160  hours  in  an  average  working  month  *1200  euros 
average); 
In  the  extreme  case  where  authorities  need  to  gather  information  physically  from 
different  sources,  it  would  take  even  longer  to  process  an  application  (around  10 

 

 

209 

 
 
 
 
 
 
 
hours). This would represent about 75 EUR per application (10 hours /160 hours in an 
average working month *1200 euros average). 

Meaning, under the Estonian example costs for the home Member State would be limited to 
75 EUR in the worst case scenario. This shows that – even if Estonia is relatively advanced in 
E-government  solutions  compared  to  other  Member  States  –  the  estimate  used  under  the 
analysis done on the basis of the EPC fees has probably not underestimated the cost for home 
member States' authorities under option 1 (assessed at around 110 EUR).   

210 

 
 
 
 
 
Annex 9: Impact of addressing regulatory obstacles in the selected business 
services (accountants, architects and engineers) 

Packages  3  and  4  would  reduce  administrative  complexity  and  address  a  number  of 
regulatory obstacles in the business services sectors of accountants, architects and engineers. 
It would simplify the following obstacles to cross-border activities in these sectors:  

Insurance requirements; 

  Authorisations (including compulsory chamber membership requirements); 
 
  Restrictions on corporate form; 
  Shareholding/voting rights requirements; 
  Requirements on management structures; 
  Restrictions on multidisciplinary activities. 

The purpose of this annex is to provide indications of the impact that these packages would 
have  with  regard  to  addressing  these  obstacles.  This  is  done  on  the  basis  of  the  2015 
Commission study on the economic impact of barriers in business services227 which looked 
into the impact of a range of regulatory obstacles in the sectors of accounting, architecture, 
engineering  and  legal  services  (the  latter  not  covered  by  the  initiative  under  analysis).  The 
large majority of the obstacles covered by this study – on which basis economic effects were 
analysed  –  would  be  simplified/addressed  through  packages  3  and  4  (namely  authorisation 
requirements  for  companies  including  compulsory  chamber  membership  requirements, 
insurance requirements, restrictions on corporate form, shareholding/voting and management 
structures  &  multidisciplinary  activities).228  Furthermore,  some  of  the  other  requirements 
covered by the study which are not addressed by packages 3 and 4 (tariffs and restrictions on 
advertising) were found to be no longer widespread across Member States thus having little 
impact.  

Overall  therefore,  the  results  of  this  study  are  therefore  indicative  of  potential  economic 
effects of packages 3 and 4 as outlined in section 5 of the impact assessment.  

Regulatory obstacles 

The study confirmed that there is a large divergence in the levels of regulatory barriers for the 
four business services sectors analysed between different Member States. Figure 1 shows the 
overall  results  of  the  assessment,  taking  into  account  the  results  of  the  barriers  assessed 
cumulatively. High (low) scores indicate higher (lower) restrictiveness.  

227 European Commission, "Business services – Assessment of Barriers and their Economic Impact", 2015 
228  Other  requirements  covered  by  the  study  are  reserves  of  activity,  tariffs  and  restrictions  on  advertising. 
Tariffs and restrictions on advertising were in addition found to be no longer widespread.  

211 

 
 
 
 
 
 
 
                                                 
Figure 1 – Overall restrictiveness scores per Member State 

LU
AT
MT
DE
IT
CY
PT
EL
HR
BE
CZ
HU
RO
PL
SI
FR
ES
SK
BG
LV
LT
EE
IE
DK
NL
FI
UK
SE

Accountants

Architects

Engineers

Lawyers

0

1

2

3

4

5

6

Barriers in the least restrictive Member State amount to merely 7% of the barriers in the most 
restrictive Member State.  

Impact on competition 

The study also analysed the impact of these regulatory barriers on the levels of competition in 
the sectors concerned. Figure 2 shows the share of companies newly establishing in a market 
(relative to all firms in a market, ‘birth rate’) for Member States with more restrictive versus 
those  with  less  restrictive  barrier  levels229.  It  illustrates  that  Member  States  with  more 
restrictive barrier levels have on average a lower number of new service providers entering 
their markets in each of the four business services sectors analysed.  

As  a  result,  competition  is  lower  in  these  Member  States  and  market  dynamics  are 
constrained.  Indeed,  figure  3  shows  that  the  Member  States  with  more  restrictive  barrier 
levels  have  on  average  also  a  lower  combined  share  of  companies  entering  and  exiting  the 
market (‘churn rate’) in each of the four sectors analysed230. 

229 The graph compares the (simple) average of birth rates (average 2010-2012) for the 10 most versus the 10 
least restrictive Member States in each sector. EL and HR are excluded from the analysis given no or low data 
availability. 
230 The graph compares the (simple) average of churn rates (average 2009-2011) for the 10 most versus the 10 
least restrictive Member States in each sector. EL and HR are excluded from the analysis given no or low data 
availability. One outlier has been removed from the analysis (RO – legal). 

212 

 
 
 
 
 
 
 
 
 
 
 
                                                 
Figure 2 - Average birth rates for high vs. low restrictive Member States 

l

a
g
e
L

r
e
e
n
g
n
E

i

t
c
e
t
i
h
c
r
A

t
n
a
t
n
c
A

High barrier

Low barrier

High barrier

Low barrier

High barrier

Low barrier

High barrier

Low barrier

6,3% 

6,1% 

5,3% 

7,7% 

8,8% 

9,1% 

8,3% 

7,9% 

0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

6,0%

7,0%

8,0%

9,0% 10,0%

Source: Eurostat, Commission assessment, 2015 

Figure 3 - Average churn rates for high vs. low restrictive Member States 

l

a
g
e
L

r
e
e
n
g
n
E

i

t
c
e
t
i
h
c
r
A

t
n
a
t
n
c
A

High barrier

Low barrier

High barrier

Low barrier

High barrier

Low barrier

High barrier

Low barrier

10,6% 

11,8% 

11,3% 

14,9% 

14,9% 

14,7% 

17,3% 

17,1% 

0,0% 2,0% 4,0% 6,0% 8,0% 10,0% 12,0% 14,0% 16,0% 18,0% 20,0%

Source: Eurostat, Commission assessment, 2015 

High  market  birth  and  churn  rates  are  associated  with  high  levels  of  competition  as  more 
productive companies replace less productive ones, increasing the overall competitiveness of 
a sector.  

A  quantification  of  the  relationship  between  barrier  levels  and  birth  rates  can  be  assessed 
through a regression analysis231. To this end, the study uses an econometric model is created 
with birth rate as a dependent variable and barrier level as an explanatory variable. Average 
firm size in a sector is used as a control variable to approximate the possible impact on birth 
rates caused by the presence of additional possible entry barriers created by large incumbents. 
Two sets of dummies (fixed effects for sectors and for countries) also enter the equation. 

Table 1 – Results of regression analysis barrier levels – birth rates 

Barrier level 

Average firm size 

R2 
Adjusted R2 
F 

−0.658*** 
(0.003) 

−0.103 
(0.395) 

0.976 
0.966 
91.1 
(0.000) 

231 The regression analysis covers the four business services sectors analysed and 28 Member States. Average of 
2010-2012 birth rates per Member State and sector were used. 

213 

 
 
 
 
 
                                                 
The  results  of  this  regression  analysis  (Table  1)  confirm  a  negative  and  statistically 
significant232 relation between  barrier levels and birth rates. In other words,  Member States 
can  increase  the  number  of  new  service  providers  entering  into  their  markets  by  reducing 
barrier levels. 

On this basis, the potential impact of reducing barrier levels on birth rates is estimated. Two 
alternative “reform” scenarios are considered: 

  A  “central  scenario”  in  which  barrier  levels  are  assumed  to  be  reduced  to  the  average 

level across all EU Member States in a given sector; 

  An “ambitious scenario” in which barrier levels are assumed to be reduced to the average 
of the “top 5” EU Member States, where the “top 5” represents the five countries with the 
lowest barriers in a given sector. 

The ambitious scenario would likely overestimate the potential impact of packages 3 and 4. 
The  central  scenario  is  therefore  used  as  a  benchmark  for  the  potential  economic  effects 
generated through policy packages 3 and 4.  

The results of these two scenarios for each of the four business services sectors analysed are 
shown in figure 4. Under the central scenario relative births intensity could increase by 2.7% 
to 6.5%233 (EU weighted average), depending on the sector concerned. Under the ambitious 
scenario birth rates could increase by 10.0% to 18.3%234 (EU weighted average). 

Figure 4 – Estimated relative impact of reduced barriers on births intensity 

Legal

Engineer

Architect

Accountant

3,3% 

2,7% 

4,6% 

6,5% 

12,8% 

10,0% 

18,3% 

Ambitous

Central

14,6% 

0,0%

5,0%

10,0%

15,0%

20,0%

Source: Eurostat, Commission assessment, 2015 

Impact on profitability 

The study also looked into the impact of the regulatory barriers on sector profit rates. Figure 
5 shows average profit rates235 for Member States with more restrictive versus less restrictive 
barrier levels236. It shows that Member States with more restrictive barriers have on average 
higher  profit  rates  in  each  of  the  four  business  services  sectors  analysed.  This  is  also 

232 Weighted OLS regression (with the size of a sector in each country, in terms of employment, as a weight) 
with  two-dimensional  fixed  effects  (country  dummies  and  sector  dummies,  included  but  not  reported  in  the 
table) based on 102 observations. The p-values are in the parentheses. The barrier level is statistically significant 
(at p-value well below 1%) and the model has a large explanatory power (high R-squared and F-statistic). 
233 This corresponds to the increase of the birth rate by between 0.24 percentage point and 0.43 percentage point. 
The impact in per cent is calculated as a relative increase in the birth rate. 
234 The corresponding increase of the birth rate: between 0.88 percentage point and 1.41 percentage point. 
235 Approximated by gross operating surplus/turnover  
236 The graph compares the (simple) average profit rates (average 2010-2012) for the 10 most versus the 10 least 
restrictive Member States in each sector. Some data is missing for CZ.  

214 

 
 
 
 
                                                 
indicative  of  the  fact  that  consumers  in  those  Member  States  are  paying  higher  prices  for 
these services than consumers in Member States with lower barriers.  

Figure 5 – Average profit rates for high vs. low restrictive Member States 

l

a
g
e
L

r
e
e
n
g
n
E

i

t
c
e
t
i
h
c
r
A

t
n
a
t
n
c
A

High barrier

Low barrier

High barrier

Low barrier

High barrier

Low barrier

High barrier

Low barrier

41,4% 

30,9% 

28,6% 

19,9% 

12,2% 

15,8% 

24,0% 

22,4% 

0,0%

5,0%

10,0% 15,0% 20,0% 25,0% 30,0% 35,0% 40,0% 45,0%

Source: Eurostat, Commission assessment, 2015 

Combining the results of the above  econometric analysis on the link between  barrier  levels 
and birth rates with a recent Commission study quantifying the impact of birth rates on profit 
rates in the four sectors analysed,237 the relationship between barrier levels and profit rates is 
estimated. The underlying reasoning for this is that changes in barrier levels affect business 
dynamics and, through it, the profit rates of the sector. 

Graph 1 – Link barrier levels and profit rates 

Barrier 
indicator 

Birth 
rate 

Profit 
rates 

This two-step approach (illustrated in graph 1) allows us to estimate the potential impact of 
reducing  barrier  levels  on  profit  rates.  For  this,  two  alternative  reform  scenarios  are  again 
considered,  the  central  scenario  and  the  ambitious  scenario  illustrated  above.  In  the  central 
scenario,  profitability  in  the  sectors  analysed  could  be  reduced  by  3.5%  to  10.9%238  (EU 
weighted  average)  depending  on  the  sector  concerned.  In  a  more  ambitious  scenario,  they 
could decrease by 13.7% to 34.2%239 (EU weighted average).  

Figure 6 – Estimated relative impact of reduced barriers on profitability 

-34,2% 

-30,7% 

-24,5% 

-13,7% 

-3,5% 

-9,3% 

-7,7% 

-10,9% 

Legal

Engineer

Architect

Accountant

Ambitous

Central

-40,0% -35,0% -30,0% -25,0% -20,0% -15,0% -10,0% -5,0%

0,0%

237  Canton  E.,  Ciriaci  D.,  and  Solera  I.,  'The  Economic  Impact  of  Professional  Services  Liberalisation', 
European Economy, Economic Papers 533, 2014 
238 This corresponds to the decrease of the profit rate by between 1.6 percentage point and 3.0 percentage points. 
The impact in per cent is calculated as a relative decrease in the profit rate. 
239 The corresponding decrease of the profit rate: between 6.1 percentage points and 6.2 percentage points. 

215 

 
 
 
 
 
 
                                                 
Impact on productivity / efficient resource allocation 

Source: Eurostat, Commission assessment, 2015 

Finally, the study looked into the impact of the regulatory barriers on the levels of allocative 
efficiency. Allocative efficiency reflects the extent to which productive factors are allocated 
towards their most efficient use (based on the market shares of more versus less productive 
firms) and thereby constitutes a key measurement of the productivity and competitiveness of 
a  given  economic  sector.  The  four  sectors  assessed  are  characterised  by  low  and  even 
negative levels of allocative efficiency in most Member States.  

Figure 7 – Relation allocative efficiency index and barrier levels 

x
e
d
n

i
y
c
n
e
i
c
i
f
f
e
e
v
i
t
a
c
o

l
l

A

20%

10%

0%

-10%

-20%

-30%

-40%

-50%

0

1

2

3

4

5

Barrier level 

Source: Eurostat, Commission assessment, 2015 

Figure  7  shows  the  relationship  between  the  allocative  efficiency  index240  and  barrier 
levels241.  This  indicates  that  Member  States  with  higher  barrier  levels  have  a  less  efficient 
flow  of  resources  to  their  most  productive  use,  which  has  a  negative  impact  on  overall 
productivity in these sectors. 

Again combining the results the econometric analysis on the link between barrier levels and 
birth rates with the above-mentioned recent Commission study also quantifying the impact of 
birth  rates  on  allocative  efficiency  in  the  four  business  services  sectors  analysed,  the 
relationship  between  barrier  levels  and  allocative  efficiency  is  estimated.  The  underlying 
reasoning for this is that changes in barrier levels affect business dynamics and, through it, 
the allocative efficiency of the sector (see graph 2 below). 

Graph 2 – Link barrier levels and allocative efficiency 

Barrier 
indicator 

Birth rate 

Allocative 
efficiency 

240 This index is calculated on the basis of labour productivity and market shares statistics, capturing the extent 
to which more productive firms have higher market shares. The potential increases are expressed in percentage 
points  given  that  in  several  cases  this  index  has  a  negative  value.  For  additional  details  on  the  Allocative 
Efficiency index see European Commission, 'Product Market Review 2013: financing the real economy', 2013 
241 The graph shows average allocative efficiency (AE) indices for the accounting and legal sector and for those 
Member States where this data is available. There is no disaggregated data available on AE for the architect and 
engineer sectors.  

216 

 
 
 
 
 
                                                 
 
 
 
This  two-step approach allows estimating  the potential impact  of reducing barrier levels on 
allocative  efficiency,  again  using  the  same  two  alternative  “reform”  scenarios  as  above 
(graph  2).  In  the  “central  scenario”  the  allocative  efficiency  index  in  the  sectors  analysed 
could be increased by 2.0 to 3.7 percentage points (EU weighted average) depending on the 
sector concerned. In a more ambitious scenario, they could increase by 7.7 to 12.4 percentage 
points. 

Figure 8 – Estimated impact of reduced barriers on allocative efficiency (percentage points) 

Legal

Engineer

Architect

Accountant

2,0 

2,1 

3,1 

3,7 

7,7 

7,8 

8,4 

12,4 

Ambitous

Central

0,0

2,0

4,0

6,0

8,0

10,0

12,0

14,0

Source: Eurostat, Commission assessment, 2015 

Conclusion 

The  study  confirms  that  reducing  barrier  levels  in  the  four  services  sectors  assessed  would 
generate more intensive competition as a result of more firms entering the market. It would 
also lead to benefits for consumers in terms of lower prices as a result of reduced profit rates. 
Finally,  the  study  confirmed  that  lower  barriers  would  lead  to  more  performant  sectors 
characterised by a stronger allocative efficiency. 

Packages 3 and 4 (see section 5 of the impact assessment) would address the majority of the 
regulatory  obstacles  covered  by  this  study  in  the  sectors  of  accountants,  architects  and 
engineers.  The  “central  scenario”  developed  above  can  therefore  be  considered  as  a 
benchmark  of  the  potential  economic  effects  that  can  be  captured  through  these  packages. 
Hence, these packages can be expected to generate positive impacts that are in line with the 
results described – increased levels of competition, less larger-than-average profitability and 
stronger levels of allocative efficiency.    

99%  of  companies  active  in  these  sectors  are  SMEs.  The  described  results  and  potential 
benefits are therefore highly relevant for them.  

Finally, the results of this study should be seen also in the context of other research242 which 
analysed  the  impact  of  regulatory  barriers  in  the  sectors  of  accountants,  architects  and 
engineers.  Also  these  studies  showed  that  addressing  the  regulatory  barriers  would  have 
positive effects on market dynamics and overall competiveness. 

242  See  for  example  Canton  E.,  Ciriaci  D.,  and  Solera  I.,  'The  Economic  Impact  of  Professional  Services 
Liberalisation', European Economy, Economic Papers 533, 2014; Swedish Board of Trade, "Possible effects of 
the Services Directive", 2012 

217 

 
 
 
 
 
 
                                                 
Annex 10: Choice of legal instrument 

A non-binding instrument is not appropriate to introduce an EU-level procedure as envisaged 
by  policy  options  2  and  3,  since  Commission  services  would  need  a  specific  legal  basis  to 
implement such a procedure. Member States, on their part, would need the legal certainty of 
clearly laid-out (and binding) rules on roles and steps their authorities should undertake while 
running the procedure. 

Some  of  the  objectives  of  this  EU-level  procedure  could  be  achieved  by  a  set  of 
implementing  measures  of  the  Services  Directive.  Article  5(2)  of  the  Services  Directive 
empowers  the  Commission  to  introduce  harmonised  forms  equivalent  to  certificates, 
attestations  and  other  documents  required  of  service  providers.  However,  such  possibility 
would be limited to the scope of the Services Directive, failing to address a wider range of 
business needs for administrative simplification.  

Regarding  the  expanded  use  of  administrative  cooperation,  a  voluntary  agreement  between 
Member States could be promoted by the Commission to use the current capabilities of IMI. 
However,  without  a  clearly  defined  procedural  workflow  the  benefits  of  a  more  intense 
cooperation would be less focused and less effective in easing access of service providers to 
foreign markets.  

In  accordance  with  the  Treaties,  the  initiative  should  thus  be  comprised  of  a  legislative 
package,  including  a  Directive  and  a  Regulation.  The  Directive  sets  out  the  legal  and 
operational framework of the European services e-card, regulating inter alia the conditions of 
eligibility,  the  competences  of  the  home  and  the  host  Member  States,  the  validity  of  the 
European  services  e-card  and  the  conditions  for  revoking  or  suspending  it.  The  Regulation 
sets  up  tools  which  are  available  for  service  providers  throughout  the  EU.  In  addition,  it 
facilitates  the  solution  of  issues  related  to  insurance  coverage  of  a  service  provider  active 
cross border. 

218 

 
 
 
 
 
 
 
Annex 11: Monitoring and evaluation 

The Commission would – in the short term – put in place a system building on the Internal 
the  described 
Market  Information  System 
procedures/certificate in place. This would take place in close cooperation with the competent 
authorities in the Member States. The Commission would also monitor how the proposal is 
put in place in Member States in order to ensure a consistent approach across the EU.  

the  facilities  required 

to  offer 

to  put 

In  the  mid-to-long-term  and  the  Commission  would  focus  on  monitoring  the  effects  of  the 
initiative. The table below presents the main indicators that will be used to monitor progress 
towards meeting the objectives pursued by this initiative, as well as the possible sources of 
information.  

Specific objectives 

Make  it  easier  and 
less 
for 
costly 
companies to provide 
services 
other 
Member States 

in 

Operational 
objectives 
Reduce 
administrative 
for 
complexity 
service  providers 
going 
cross 
border 

Indicator 

Cost 
of 
commencing  cross-
border  provision  of 
services  and  set  up 
a 
secondary 
establishment 

of 
Experience 
service 
providers 
on  ease  of  cross-
border 
service 
provision 

Increased 
cooperation 
by 
MS  by  providing 
a  clear  procedure 
and workflow  

of 

the 
Statistics  on 
usage 
the 
European  services 
e-card  procedures 
via IMI 

Baseline 

for 

Costs 
service 
providers  up 
to 
10,000 
EUR 

Administrative 
and  regulatory 
obstacles 
raised 
service 
providers 
surveys 

by 

in 

414 in 2015 

Source of 
data  
Studies 
Surveys 
Other 
stakeholder 
contacts  

Experience of 
Member 
States 
that 
may  choose 
to  make  use 
for 
of 
IMI 
posting 
of 
workers 
Member 
States' 
exchanges 
through IMI 

more 
in 
the 
towards 
service 
by 

Enable 
confidence 
market 
foreign 
providers 
increasing 
and 
transparency 
available information 
Enable 
increased 
market dynamics and 
leading 
competition 
to  more  choice  and 
value 
for 
consumers 

added 

Reduce 
regulatory 
barriers 
provide services 

to 

Level  of  regulatory 
barriers  in  Member 
States 

Commission 
periodic 
barrier 
assessment 

in 

low 

in 

High 
divergence 
regulatory 
obstacles  
and 
market 
dynamics 
several 
business 
services 

219 

 
 
 
 
 
 
 
 
 
 
 
220