In a report published on Monday 27 February, the European Commission identifies a series of barriers to cross-border investment.
The Commission distinguishes between three types of barriers: ex ante, which are of immediate concern to investors when considering engaging in cross-border activity; - in itinere, which deter investors from maintaining or increasing their cross-border exposure; - and ex post, which lead to difficulties at the end of the investment process.
The first category of barriers includes marketing requirements that differ between states, administrative issues and regulatory fees to operate beyond borders (in some cases, up to €1,100). In the second category, the Commission flags up requirements on residency obligations in particular. “Requiring residence in the country as a condition for appointment to certain positions hampers local companies seeking to attract foreign expertise. It also affects foreign companies that want their own staff to be involved in the management of a subsidiary”, the Commission writes.
Finally, in the third category, the Commission notes different insolvency regimes and procedures that can in some cases be discriminatory for reimbursements of withholding tax in cases of double taxation.
The Commission believes that these barriers can be addressed by voluntary action of the member states. It encourages them to determine a joint roadmap, whilst reserving the right to present legislative proposals if needs be. (Original version in French by Élodie Lamer)