The European Company (SE) and its Role in the European Business Environment

Nov 17, 2023

For many years, the European Company (SE) has been a subject of discussion within the framework of the European Union (EU) regarding the reform of corporate law towards a more European direction. These discussions led to the adoption of Regulation 2157/2001 on the Statute for a European Company (the Regulation) and Directive 2001/86 on employee involvement in the European Company (the Directive).

The aim of this corporate form is to allow companies that have been established under the laws of different EU member states to merge or create holding companies while also enabling companies and other legal entities engaged in economic activities under the laws of different member states to establish common subsidiaries.

The most significant advantage of the European Company, which makes it particularly attractive, is its ability to transfer its registered office to another EU member state at any time without any consequences for its legal status. This flexibility facilitates cross-border operations and expansion for businesses operating within the EU.

Furthermore, the European Company can offer significant business advantages to the companies that constitute it. The "SE" designation alongside the company's name gives this corporate entity a European dimension, which can prove to be very profitable in terms of marketing and branding for the company.


In Greece

In Greece, the Regulation and the Directive were incorporated into national law through Law 3412/2005, "Framework for the Establishment and Operation of the European Company," and Presidential Decree 91/2006, "On the Role of Employees in the European Company." However, it should be emphasized that merely reading the Regulation and the Directive is insufficient to form a complete understanding of the functioning of the European Company due to the close connection and dependence of these provisions on the national laws of the member states where the European Company is headquartered. This fact makes the European Company a hybrid between a national and a European company.

It is evident that the European Company (SE) is not an easily formed corporate entity, especially in countries like ours, where small and medium-sized enterprises dominate primarily due to the increased cost of establishment. However, its European image makes it particularly attractive for businesses looking to expand into the markets of other EU member states without necessarily having to establish subsidiaries or branches in those markets, thereby enhancing their international presence.

In conclusion, while the European Company may pose challenges in its formation and operation, its benefits in terms of cross-border mobility and international presence make it a valuable option for businesses operating within the European Union. Reforms to the Regulation may be necessary to address some of its limitations, but the SE remains a valuable tool for companies looking to expand their horizons in the European market.