Röpke: EESC is the first European institution to reject the proposal on SUP by a large majority

The event was started by Oliver Röpke, head of the Brussels Office of the Austrian Trade Union Federation ÖGB and competent rapporteur in the European Economic and Social Committee (EESC). The EESC is the first European Institution to reject the proposal of the EU Commission on SUP by a large majority. Representatives of a wide range of interest groups also opposed the proposal. This is no surprise as the SUP hardly provides for any minimum standards, for example neither with regard to co-determination rights of employees nor in respect of authorised capital. Hence, the planned separation of registered offices is particularly critical. Based on online registration, it shall be possible to establish the SUP as a pure letterbox company in a Member State with particularly low standards from where it should be able to operate EU-wide in accordance with the rules of the place of foundation. What was actually meant to serve the strengthening of the Single Market would in reality aid cross-border ostensible self-employment and money laundering and put into motion a competition for the lowest social and tax legislation standards.

Brandtner: SUP proposal provoked sceptical reactions among Member States

Thomas Brandtner, Head of Unit at General Secretariat, Council of the European Union, regarded the Commission proposal as an initiative at the right time, which, however, also provoked sceptical reactions among Member States.

Bydlinski: The type of company such as British limited companies had not been a success

Sonja Bydlinski, Head of the Department of Business and Corporate Law, Federal Ministry of Justice of the Republic of Austria and representative of the Council Working Group in charge of the SUP, was critical - as is the Austrian Federal Government - of the proposal of the SUP and associated it with the ECJ ruling “Centros”, which sent an initial shock wave through Europe and let to a strong increase of British limited companies both in Austria and Germany, which, however, rapidly developed a negative image.

Värk: Estonia regards the SUP as an example of a modern type of company

Kristi Värk, representative of Estonia in the competent Council Working Group, explained Estonia’s generally positive attitude towards the proposal. One would regard the SUP as a useful tool for companies to establish companies simply and across borders and as an example for a modern type of company.

Guteland: SUP represents clear danger for trade unions and social rights

Jytte Guteland, MEP, Group of the Progressive Alliance of Socialists and Democrats in the European Parliament, regarded the SUP as a concrete danger to the rights of employees, trade unions and to social rights. The SUP would open up opportunities, which would particular benefit dubious companies. Tax avoidance and wage dumping would also be favoured, which in particular in the light of the recent “Lux Leaks” affair, seemed to be completely incomprehensible.

Gahleitner: If we are honest we know that we don’t need the SUP in Europe

Helmut Gahleitner, Expert of the Chamber of Labour for the dossier, regarded the SUP as an unattractive gift of the EU Commission, as because of the necessary enshrinement in national law the Austrian GmbH (Limited Liability Company) would also come under enormous pressure; hence, he clearly saw the SUP as a Trojan horse. It would be absurd, said Gahleitner, to still speak of a “capital company” in connection with the SUP; in reality it was a vehicle to undermine social and tax legislation standards. At the end of the day, it is not the shareholder, but the general public, which is held to account. He also strongly emphasized that co-determination by employees is part of the European Social Model, which could, however, be removed by the SUP.

The large number of requests to speak by the public showed that the interest in this subject is great and that the opinions between employer and employee representatives in respect of the SUP are very similar. For example, Gerhard Huemer, Director for Economic and Fiscal Policy, European Association of Craft, Small and Medium-sized Enterprises (UEAPME) asked which SME the SUP would demand – those, he represented would not see any necessity for this. Those who would probably benefit most would be corporations, which would use the SUP to refine their tax engineering, hence their low-tax constructions. There is a hardly a better way to put it in a nutshell.

Michael Umfahrer, notary in Vienna and President of the Austrian Notarial Academy, concluded the results of the discussion in his closing remarks and once again reminded the audience of the fundamental concerns in connection with the SUP, in particular in respect of the legal certainty for cross-border operating companies, as this would have been far better served with a Directive on changing the registered office.