COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT REPORT Accompanying the document Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directives 2009/102/EC and (EU) 2017/1132 as regards further expanding and upgrading the use of digital tools and processes in company law
Date: 2023-03-29
Institutions: Directorate-General for Justice and Consumers, European Commission
Subjects: access to information, administrative cooperation, company law, cross-frontier data flow, digital transformation, digitisation, registration of a company, right of establishment, single market, small and medium-sized enterprises

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 29.3.2023  SWD(2023) 179 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT REPORT  Accompanying the document Proposal for a   DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directives 2009/102/EC and (EU) 2017/1132 as regards further expanding and upgrading the use of digital tools and processes in company law {COM(2023) 177 final} - {SEC(2023) 377 final} - {SWD(2023) 177 final} - {SWD(2023) 178 final}  
 
 
Executive Summary Sheet  

Impact assessment report related to the initiative on Upgrading digital company law 

A. Need for action 

What is the problem and why is it a problem at EU level?  

Today,  access  to and use of  reliable company information  from  business registers in cross-border situations is 
hindered by barriers.  

Firstly, company data that stakeholders, as direct users, are looking for is not yet sufficiently available in national 
business registers and/or at EU level through the Business Registers Interconnection System (BRIS). This concerns 
in particular information at  EU  level about  legal forms other than limited liability companies (e.g. partnerships); 
companies’ place of management and place of the main economic activity; groups of companies; and third country 
company  branches.  Currently,  BRIS  and  other  EU-level  interconnection  systems,  for  example,  the  beneficial 
ownership registers interconnection system (BORIS), are not connected.   

Secondly, the use of such company data when companies set up subsidiaries or branches in other Member States 
is  hindered  or  not  possible.  Companies  often  need  to  resubmit  company  data,  which  exists  in  their  national 
business  registers,  as  well  as  complete  burdensome  formalities  (e.g.  legalisation/apostille,  certified  translation). 
Similar barriers were reported in other cross-border situations, including when dealing with competent authorities 
or  courts.  Registers  or  authorities  often  do  not  consider  company  data  from  other  Member  States  as  reliable 
enough, which results in legal uncertainty, costs and delays. National company extracts vary and cannot be used in 
cross-border situations without burdensome formalities.  

These  problems  need  to  be  addressed  at  EU  level  as  the  current  obstacles  to  cross-border  access  and  use  of 
company information are mainly caused by divergent national rules and lack of appropriate rules at EU level.   

What should be achieved? 

The  overall  objectives  are  to  enhance  transparency  and  trust  in  the  business  environment,  achieve  more 
digitalised and connected cross-border public services for companies, easier cross-border expansion for small and 
medium-sized enterprises (SMEs) and more effective EU action against abuse and fraud, in turn, leading to a more 
integrated and digitalised single market.   

More specifically, the initiative aims to: 
- 
Increase the amount of company data available in business registers and/or BRIS, and improve its reliability; 
-  Enable direct use of company data available in business registers when setting up branches or subsidiaries in 

other Member States and in other cross-border activities and situations. 

What is the value added of action at the EU level (subsidiarity)?  

There is a strong value added of action at EU level because this initiative focuses on cross-border issues: access to, 
availability  and  reliability  of  company  data  in  a  cross-border  context,  and  its  cross-border  use.  Member  States 
could not bring about sufficient improvement on their own because of the cross-border nature of the problems. 

Without  EU-level  action,  national  or  regional  initiatives  to  address  the  increasing  demand  for  cross-border 
company  data  and  the  need  to  facilitate  its  cross-border  use  would  likely  result  in  divergent  national  rules  and 
potentially overlapping reporting requirements, increasing the administrative burden on companies. Private sector 
initiatives, e.g. by commercial  service  providers, would not  be  able  to provide reliable company data  for official 
use. 

B. Solutions 

1 

 
 
 
What are the various options to achieve the objectives? Is there a preferred option or not? If not, why? 

The impact assessment analyses the policy options under 4 main issues relevant for the planned initiative:  

1.  Making more company information available in business registers and/or BRIS  

2.  Interconnecting BRIS with other systems and enabling better searches 

3.  Ensuring that company data is verified adequately before it is entered in a business register  

4.  Enabling direct use of company data from business registers in cross-border situations. 

All 4 policy options assessed would entail legislative measures, given that the problem drivers are legal, and any 
measures would need to amend the existing EU company law framework (including BRIS). The  preferred option 
consists of a package of the preferred measures under each of the 4 main issues: 

1.  Making information available in national registers/BRIS about partnerships, third country company branches, 
cross-border  group  structures  and  ownership,  and  place  of  management  and  place  of  the  main  economic 
activity; 

2.  Connecting  BRIS  with  BORIS  and  the  Insolvency  registers  interconnection  system  (IRI),  using  the  European 

unique company identifier (EUID) and adding new search functionalities to BRIS; 

3.  Obligation  to  check  a  harmonised  list  of  elements  and  follow  common  basic  procedures  to  ensure  reliable 

and up-to-date company data;  

4.  Once-only principle for setting up subsidiaries or branches in another Member State, harmonised company 

extract, mutual recognition of certain company data, and abolition of formalities (apostille). 

What are different stakeholders' views? Who supports which option?  

Overall,  stakeholders  across  the  consultation  activities  (public  consultation,  consultation  of  SMEs,  targeted 
consultations  with  companies,  legal  practitioners,  Member  States,  company  law  professors)  confirmed  the 
identified problems and supported action at EU level.  

A  large  majority  of  stakeholders,  including  SMEs,  encountered  difficulties  when  looking  for  information  about 
companies  in  other  Member  States,  and  there  was  support  across  stakeholder  groups  (companies,  business 
organisations,  business  registers,  legal  professionals,  authorities,  citizens)  to  make  more  harmonised  company 
information available at EU level. 

Many stakeholders, and in particular legal practitioners, highlighted the importance of reliable company data for 
legal  certainty  and  considered  that  defining minimum  rules  for verifying  company  data  before  it  is entered  in  a 
business register would facilitate its cross-border use. 

Stakeholders in general confirmed the need to enable cross-border use of company data (including applying the 
once-only principle, introducing a harmonised company extract, reducing formalities).  

In  particular,  companies  and  legal  practitioners  confirmed  obstacles  faced  when  setting  up  subsidiaries  or 
branches  abroad,  or  in  other  cross-border  situations  (including  the  need  to  resubmit  company  data,  to  obtain 
legalisation/apostille and certified translation).  

C. Impacts of the preferred option 

What are the benefits of the preferred option (if any, otherwise of main ones)?                                     

The package of preferred measures will be highly beneficial for companies, in particular SMEs, due to its expected 
strong positive impact on ease of doing business and access to other Member States’ markets. Companies would 
benefit from increased transparency, improved accessibility and reliability of company data and thus, from higher 
legal  certainty  in  cross-border  situations.  It  will  bring  substantial recurrent cost  savings  (administrative burden 
reduction)  for  companies  creating  new  subsidiaries  or  branches  in  other  Member  States  and  for  all  companies 

2 

 
 
engaging in cross-border business activities, estimated to amount to around EUR 437 million per year.  

The increased accessibility and reliability of company data, higher legal certainty and better connections between 
registers (thanks to the once-only principle and connecting other EU level systems/registers to BRIS) should result 
in  savings  for  business  registers  due  to  easier  searches  for  company  data  from  other  Member  States  and  a 
reduced need to request documents from companies.  

As regards other public authorities, easier access to more sets of reliable company data would facilitate their work 
as they could consult company data directly in business registers and BRIS and so require fewer documents from 
companies, resulting in some savings.  

The  package  is  also  expected  to  be  highly  beneficial  for  society  in  general,  including  consumers,  due  to  its 
expected positive impact on providing more accessible and reliable company data across the EU, and therefore 
allowing consumers to make more informed choices when buying from or entering into contracts with companies 
from other Member States. More available, accessible and reliable cross-border company data will also facilitate 
efforts to tackle abuse and fraud, and this initiative will thus contribute to creating a fairer single market. 

What are the costs of the preferred option (if any, otherwise of main ones)?                                    

The package will result in one-off costs for those companies, which currently do not file certain information to a 
register, estimated at around EUR 311 million.  

These will be limited by the fact that Member States should not apply filing fees separately for each new item of 
company data filed. The expected recurrent benefits for companies (explained above) would far outweigh these 
one-off costs. 

What are the impacts on SMEs and competitiveness?  

The package of preferred measures, by improving availability and reliability of company data, will be beneficial for 
companies  and  will  facilitate  access  to  finance  and  the  creation  of  businesses.  In  addition,  enabling  the  cross-
border use of such data will result in important recurrent cost savings (burden reduction) for companies and thus 
substantially  ease  the  conduct  of  cross-border  business  activities  and  facilitate  access  to  other  Member  States’ 
markets.  

By  increasing  transparency  and  trust  in the  market  as  well  as  by  facilitating  cross-border  company  creation  and 
having a positive impact on cross-border activities, the initiative should stimulate cross-border trade, services and 
investment flows and thus contribute to competitiveness and growth in the single market. 

These measures will apply to around 16 million limited liability companies and 2 million partnerships in the EU. As 
SMEs account for 98-99% of limited liability companies in the EU and around 40% of SMEs engage in cross-border 
activities,  they  will  particularly  benefit  from  the  expected  reduction  in  administrative  burdens.  The  measures, 
including  the  resulting  increased  legal  certainty,  will  be  strongly  beneficial  to  SMEs,  as  they  do  not  have  the 
resources of large companies and are usually more affected by unclear and complex rules.    

Will there be significant impacts on national budgets and administrations?  

This package is a continuation of developments related to digitalisation that have been taking place in company 
law  so  far.  Due  to  the  need  for  business registers  to  adapt  IT  systems, the  package  is estimated  to  amount  to 
around an EUR 5.4 million one-off cost for all business registers together, and recurrent costs e.g. to carry out ex-
ante verification of company data, estimated at around EUR 4 million per year for all registers.  

However, Member States would be able to build on IT investments they have already made for BRIS in the recent 
years, and adjustment costs for verification should be limited given the ex-ante checks already in place. It is also 
likely that there will be some loss of revenue for registers, which charge fees for company extracts for cross-border 
use, estimated at around EUR 7.9 million for all registers.  

As  to  the  other  authorities,  although  authorities  in  charge  of  issuing  apostille  will  lose  revenue  from  apostille, 

3 

 
 
estimated  at  EUR  9.5  million  per  year,  abolishing of the  apostille  is estimated to result  in overall  administrative 
burden reduction, given the current legal uncertainty and the related human resources and time needed to issue 
it. 

Will there be other significant impacts?  

The use of the once-only principle for setting up subsidiaries or branches in other Member States, connecting BRIS 
with other  EU-level  systems of  interconnection  and  with  other  EU-level  systems  or  registers  through  the  use  of 
EUID would greatly contribute to creating more connected public administrations across the EU, and, therefore, 
to a more digitalised single market. 

Proportionality?  

The preferred option will strongly contribute to meeting the objectives of increasing the amount and reliability of 
company data cross-border and enabling its direct use in cross-border situations, while not going beyond what is 
necessary to achieve those.  

The initiative  is targeted, as it focuses on  the  needs of  direct users, such as companies,  other stakeholders and 
public  authorities,  to  access  and  use  in  the  cross-border  context  reliable  and  up-to-date  official  company  data 
from  business  registers,  which  is  based  on  legal  obligations.  It  focuses  on  cross-border  aspects  and  introduces 
solutions, none of which could be achieved by Member States acting alone. 

The administrative burden and costs related to the preferred option are also commensurate with the objectives to 
be achieved. Overall, the preferred option will provide a clear net benefit for companies and society as a whole. It 
will  also  provide  legal  certainty  and  facilitate  cross-border  activities  while  taking  into  account  existing  national 
company law procedures. 

D. Follow up 

When will the policy be reviewed?  

The legislative proposal will include a provision to carry out an evaluation of the new initiative. 

4