The European Union comprehends a community of member states to support stability, equality, and economic growth. After the Brexit decisions and the UK leaving the European Union, 27 member states comprise the EU. The Treaty on the Functioning of the European Union (TFEU) lays down the fundamental principles of the single market and customs union. These principles are controlled via EU law. Discrimination and protectionism are prohibited, and equal treatment of individuals and legal persons is mandatory. For European company formations it is important to understand and appreciate the differences between the member states and their sovereign functions that do not fall under the supranational system of the EU.
To ensure equality and promote the standards of a stable internal market, harmonization is to a certain extent needed. The theory goes that a free market and consecutive competition between market players is advantageous for pricing levels and quality of goods. Administrative requirements and tax burdens are allowed as long as it does not discriminate and there is no quantitative restriction or other measure that has an equivalent effect.
Individual and sovereign member states of the Union have their own company law, residency requirements, and tax laws. The European Court of Justice may test local laws on the Union principles but does not overrule the local initiatives outside the scope of their mandate. Further information is available on the designated pages for the member states:
- Czech Republic
Alongside the member states of the European Union, entrepreneurs, consultants and other business professionals may choose to incorporate in other countries like the UK and Gibraltar, or even in an offshore jurisdiction. European company formations, and incorporation in general, is subject to an overlap in local company laws and international regulation.