{"id":31884,"date":"2018-04-04T12:48:25","date_gmt":"2018-04-04T10:48:25","guid":{"rendered":"https:\/\/bmhavocats.com\/2018\/04\/04\/corporate-law-international-mobility-of-companies-the-cjeu-allows-a-company-to-change-its-nationality-without-an-actual-transfer-of-its-business\/"},"modified":"2026-06-30T12:37:33","modified_gmt":"2026-06-30T10:37:33","slug":"corporate-law-international-mobility-of-companies-the-cjeu-allows-a-company-to-change-its-nationality-without-an-actual-transfer-of-its-business","status":"publish","type":"post","link":"https:\/\/bmhavocats.com\/en\/2018\/04\/04\/corporate-law-international-mobility-of-companies-the-cjeu-allows-a-company-to-change-its-nationality-without-an-actual-transfer-of-its-business\/","title":{"rendered":"[CORPORATE LAW] International Mobility of Companies: The CJEU Allows a Company to Change Its Nationality Without an Actual Transfer of Its Business"},"content":{"rendered":"

[vc_row][vc_column][vc_video link=”https:\/\/www.youtube.com\/watch?v=miiyHdeXxj0″][vc_column_text]In a highly publicized ruling dated October 25, 2017\u2014Polbud[<\/sup><\/strong><\/em>1<\/a><\/sup>]<\/sup><\/strong><\/em>, the Court of Justice of the European Union allows companies to subject themselves to the law of another Member State by transferring their registered office, even if their actual economic activity continues in the Member State of origin. Thus, the Court allows companies to freely choose the applicable corporate law, provided they comply with the rules and formalities of the host country. <\/em><\/p>\n

It may be advantageous for a company to transfer to another country either its place of management and actual operations (\u201cactual headquarters\u201d) or its place of registration, which typically entails a change in its nationality (\u201cregistered office\u201d). There are many reasons for such a change, often driven by the search for the most attractive corporate or tax regime. Within the European Union, such transfers of headquarters were not always\u2014and in some cases still are not\u2014permitted by all Member States and may result in the\u2014disastrous\u2014dissolution of the company or a change in its legal form. <\/p>\n

Under the principle of freedom of establishment, European law has gradually expanded the possibilities for such transfers. On the one hand, secondary European law has for years sought to harmonize corporate law, particularly through provisions concerning mergers, demergers, conversions, and international transfers of registered offices. While it is true that cross-border mergers are provided for by a directive only for corporations, the Societas Europaea (SE) was created with the notable feature of allowing it to transfer its registered office and establish itself in another Member State by a simple decision of the management or administrative body. A directive concerning the transfer of the registered office or international conversion has not yet been adopted. <\/p>\n

Furthermore, the Court of Justice of the European Union has consistently upheld the principle of freedom to transfer a company\u2019s registered office and to restructure between Member States through transfers of registered office or mergers since 1988[<\/sup>2<\/a>]<\/sup><\/strong>.<\/p>\n

The distinctive feature of the Polbud <\/em>decision lies <\/em>in the fact that the Court of Justice recognized that the principle of freedom of establishment in the transfer of a registered office within the European Union extends to cases where the statutory registered office \u2014the place of registration\u2014is transferred to a new host Member State, even if the company\u2019s actual place of business remains unequivocally in the Member State of origin.<\/p>\n

1. The transfer of the statutory headquarters without relocating the actual headquarters, protected by the freedom of establishment<\/strong><\/h4>\n

At the heart of this ruling is Polbud<\/em>, a company incorporated under Polish law, which decided to transfer its registered office to Luxembourg while maintaining its principal business activities and its de facto headquarters in Poland. After being registered in Luxembourg as a Luxembourg company, Polbud<\/em> requested to be removed from the Polish commercial register, where it was still registered. This request was rejected by the registration court, which made removal from the registry contingent upon the company\u2019s dissolution following a liquidation proceeding (which obviously entails administrative, tax, and financial obligations). <\/p>\n

In response to a request for a preliminary ruling, the CJEU examined the issue of compliance with European law, particularly with regard to the freedom of establishment[3<\/a>]<\/sup><\/strong>, of the Polish provisions making the removal from the register of a company transferred to Luxembourg contingent upon its liquidation.<\/p>\n

According to the CJEU ruling, the company had validly transferred its registered office as long as the conditions for establishment required by the host state were met, regardless of the location of its actual economic activity. The home state was not entitled to require the company\u2019s liquidation since Polish domestic law allowed companies organized under national law to change their legal form without prior liquidation. The underlying principle is not new, but the CJEU has significantly expanded the freedom of establishment. <\/p>\n

Compared to previous case law[4<\/a>]<\/sup><\/strong>, the Polbud <\/em>case thus provides <\/em>the CJEU with an opportunity to rule on a situation involving the transfer of a registered office while maintaining legal personality, which presents two novel aspects:<\/p>\n