European Company SE (Societas Europaea)

[2fire]

Dear OCT members,

Has anyone had experience with a European Company (SE)?

How does it work?

For example, if I have a factory in EU Country A, sales offices in EU Countries B and C, and I decide to merge them into a European Company (SE) based in Country D, what will happen to the merged companies in A, B, and C? Will they become branches of the SE, or will they remain as SE entities with local offices and functions?

This process is somewhat confusing and not well described in publicly available resources. I would be glad if someone can explain it.

 

[JohnLocke]

It isn't different in Sweden like in any other European country, where you have substance‌ you get taxed. For a setup like the one you describe you need professional assistance‍ in corporate tax planning if you don't want to risk to pay tax in country⁠ A,B,C !

 

[2fire]

Dear JohnLocke,

By SE I didn’t mean Sweden,⁤ I mean novel legal form in Europe:

https://europa.eu/youreurope/busine...s/setting-up-european-company/indexamp_en.htm

 

[JohnLocke]

True, read your post wrong sorry.

 

[Forester]

From what I have⁣ understood, the former is true – only one subject will arise from merging.
But I⁢ have not faced this in practice. As with any EU regulation issue, consulting a specialised︀ lawyer is IMO higly recommended (as the many of EU regulations are pure legal mess,︁ taking into account their local modifications).

 

[mraleph]

Wau, truly a regulated stakeholder capitalism.

SE needs to have an employee︀ participation in the company bodies, apart from other mandatory requirements

Relevant national authorities from some︁ EU countries - Belgium, Bulgaria, Cyprus, Denmark, France, Greece, Latvia, the Netherlands, Poland, Portugal, Spain︂ and Sweden - might oppose the transfer of registered office during the 2 months' notice︃ period on the grounds of public interest.

What is the actual benefit from such structure?︄

 

[2fire]

If I‌ am correctly understanding the actual benefit that you don’t need to setup subsidiaries or branches‍ and you can operate locally in each EEA member. Another benefit which seems to me⁠ interesting is that you will have nice solid financial statements and you can benefit with⁤ easier financing for your needs.

There is must be a some reasons why those big⁣ names have SE: Allianz SE, E.ON SE, SAP SE, BASF SE, Fresenius SE & Co.⁢ KGaA, Airbus SE, Schneider Electric SE

As it is mentioned these companies have chosen the︀ SE form to facilitate their operations across multiple EU countries, benefiting from streamlined regulations and︁ increased mobility within the EU single market.

 

[daniels27]

I personally would expect the legal fees to be substantially higher than using local companies‌ as there are very few SE companies.

While for big names there will be benefits,‍ I expect those benefits to be outweighed by the high base costs for pretty much⁠ anything without assets and turnover in the higher millions.

I would recommend the German Wikipedia⁤ article, it gives a good explanation of the advantage of having a SE holding, with⁣ subsidiaries all over Europe. You can then easier move the SE holding between member stays.⁢ Banks and insurances can form subsidiaries and are then only regulated in the country if︀ the seat is management.

If you are about to proceed, I would check with a︁ Czech lawyer at 80% are incorporated in Czechia.

 

[mraleph]

I've introduced myself to EU regulation establishing Societas Europeae. That structure looks like an EU integrative︁ mechanism with several precluding requirements - one a mandatory employees' representation in management board. It's expensive for compliance and maintenance. You may have your reasons why an EU holding︂ or operational company with subsidiaries and branches isn't a solution to your case, but I︃ can't figure what's the benefit from SE.

Thank you for bringing this topic to attention.︄

 

[Forester]

In my deep opinion, if we talk about EU (not EEA), you can operate⁠ freely across all member countries being registered in one country without any additional measures (exceptions⁤ for some industries/professions exist), it's the fundament of Schengen (free movement of people, goods and⁣ services).

Sure.
Well, I am guessing that︄ the benefits can be related more likely to strenghtening their political weight and establishing stronger︅ political connections... The big business is strongly tied to politics, the EU is not an︆ exception, on the contrary.
But it's just my guess.

Sure.
I agree; and see above.
I have read it but haven't found there much information re:︍ this; could you eventually elaborate more?

Yes.
Really? Quite interesting. Could you point at some source?
(BTW, the bindings between business and‍ politics in Czechia are extremely strong, TBMK.)

 

[daniels27]

https://en.wikipedia.org/wiki/Societas_Europaea

https://de.wikipedia.org/wiki/Europäische_Gesellschaft

 

[Forester]

Wow.
Thanks.

Oh well. Now I see, it's at the very beginning, before the thorough description what it‌ is about. “Vorteile einer Europäischen Gesellschaft”
Hence,
1) I must admit that I have lied‍ when I have claimed that I read it; I just went through it quite quickly⁠ and I overlooked this part – as I had not expected this before description, I⁤ looked for it at the end, at Practical Significance (Praktische Bedeutung) and Weblinks...
2) It⁣ means that I am not well suitable for today's world – I dislike this stupid⁢ “managerial style” where you get in the paper (not separately e.g. in the abstract) some︀ conclusions presented before you get some data to make your own conclusions... 😉 😉

Regardless, this
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The SE structure simplifies cross-border M&A transactions. This enables companies to expand and reorganize across︁ national borders - without the expensive and time-consuming formalities for multiple subsidiaries in individual states.︂

As the SE can move its registered office to another member state while maintaining its︃ identity, without the need for dissolution in the country of departure or new establishment in︄ the country of arrival, companies can choose their registered office for purely economic reasons.

Another advantage is seen in the psychological perception, since the establishment at least suggests the merger︅ of equal partners, but in the external presentation one national company is not taken over︆ by another national company (so-called mergers of equals).
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is well understandable, as well as︇ the point about banks dealing with only one supervisory authority (although, in fact, it is︈ not so simple as it seems; e.g they have to deal with financial arbiter /or︉ comparable institution/ in every country, IMO.)

 

[CyprusLawyer101]

I ve set up one SE for a client 7-8 yrs ago. Still providing corporate‌ services to them. Nothing much going on in terms of increase compliance other than usually‍ going through different routes to satisfy registrar compliance than normal companies. This one is acting⁠ as a holding company. I don't not really recall what was the reason behind opting⁤ for an SE rather than a normal ltd.

 

[2fire]

Does it‌ hold other EU companies or works internationally?

I am trying to understand how does SE‍ establish works in other member states.

 

[CyprusLawyer101]

I believe‍ is just one EU subsidiary. Out if my limited experience, I would say that this⁠ vehicle adds nothing to the tax planner and not much to corporate governance / operation.⁤ Still authorities in the EU need to be notified / approve in case of mergers,⁣ redomiciliations etc. Maybe such processes become easier.