The European Commission adopted a Proposal for a directive on European cross-border associations. This proposal aims to facilitate cross-border activities of non-profit associations in the EU, acknowledge the role non-profit associations play in generating economic and societal values in the EU, and create an enabling environment for the non-profit sector.
Currently, when non-profit associations engage in activities in another Member State than the one they are established in, they do not receive uniform acknowledgment of their legal personality and capacity and often need to register for a second time or even form a new legal entity in that Member State. About 310 000 non-profit associations currently affected by those obstacles when operating in another country.
The Commission’s proposal creates an additional legal form of a European cross-border association (ECBA) in Member States’ national legal systems. This is a major step towards the recognition of non-profit associations and organisations in the European Union.
The new rules will:
- Establish in each Member State a new legal form of non-profit associations specifically designed for cross-border purposes (the ECBA), next to existing national legal forms.
- Allow automatic recognition of this new legal form across the Union once an ECBA is registered in one Member State, thanks to the ‘ECBA certificate’.
- Provide for harmonised rules on transfer of registered office, thus allowing non-profit associations to reap the full benefit of the freedom of establishment and the freedom to provide services, goods, and capital in the Union.
- Ensure the ECBA fully enjoys the benefits of the Internal Market regardless of the Member State of registration by having free and non-discriminatory access to public funding in each Member State it operates.
Civil Society Europe, Philea (Philanthropy Europe Association) and the European Council of associations of general interest (CEDAG) released a joint statement saying: “We welcome the European Commission proposal to facilitate cross-border activities of non-profit associations in the EU through the creation of a new legal form of a European Cross Border Association. In line with our longstanding and continuous commitment, we will keep engaging with national stakeholders and EU institutions, and later provide further comments on this Directive proposal.”
Non-profit associations and public benefit foundations create societal and economic value as providers of services in social, health, care, culture, employment, education, sports, environment, international cooperation and humanitarian support. They also serve as the space where citizens come together to play an active and democratic role in responding to challenges, and providing innovative solutions or advocating for change.
“We believe that by creating a new legal form of non-profit associations that can be recognised by all member States, we can further unlock the potential and support the essential contribution of civil society organisations of all sizes to our society. It can be a crucial tool that can mobilise citizens’ collective engagement notably through associations and foundations to do more public benefit work and collaborate in all different societal areas,” the joint statement says.
The proposal will be presented to the European Parliament and the Council for approval. Once adopted, Member States will have two years to transpose the Directive into national law.