How it works?

Based on EU-treaty provisions the principle of freedom of establishment enables an economic operator (person or company) to carry on an economic activity in a stable and continuous way in one or more Member States without being subject to any discriminatory or restrictive measures which could not be justified by reasons of general interest. (All OECD-Member states allow certain stage of freedom of establishment).

What does it mean for enterpreteurs?

Thanks to this globalisation process you may benefit from competition between corporation legal systems in different EU states. You are not entirely on your' states hands if you wish to form corporation or make changes in it. You may void protraction, complication and high costs caused by your local legal system or bureaucracy. You may choose from all types of corporation in the world and form corporation in that country where you find it has most sense. For conditions see this chapter.

Cross-border tax benefits

Cross-border profit allotment has been widely used in some European countries, to arbitrage the difference in the tax laws of different jurisdictions, usually between European countries and the United States. It is known as profit taxation planning.

Profit taxation planning (PTP) refers to tax planning strategies that profit from gaps and mismatches in tax rules to shift profits to locations where the taxes are low resulting in little corporate tax being paid.

PTP strategies are legal if they just take advantage of current rules. Businesses cannot be faulted for using the rules that governments have put in place. It is therefore governments’ responsibility to revise the rules or introduce new rules.

Other useful links:
Registration for company start up and tax