Latest Article

‘At Least’ the Registered Office. Regulatory Arbitrage, European Company Law, and the Role of Harmonization

Prof. PhD Nicola DE LUCA

Vanvitelli University and Luiss University Rome

Abstract: Analysing the wording of art. 86b Dir. (EU) 1132/2017, passed in 2019 and to be implemented by 2023, the article addresses the issue of connecting factors for companies in Europe, as elements capable of defining their nationality and, therefore, the applicable law.

It is argued that the mentioned rule has in fact superseded that of the affirmed equivalence before the treaty, as connecting factors, of the registered office, the location of the central administration or the principle place of business, granting prevalence to the first factor: this puts in serious doubts the viability of the real seat criterion, still adopted by some Member States.

Indeed, the authority of Member States to impose their own corporate legislation on foreign or even formally foreign companies, as shown in the recent case relating to the Tor Crescenza Castle (Edil Work), can only be an exception, permissible if motivated by overriding reasons in the public interest. Thus, the risk of a race to the bottom between legal systems, discussed in the US, arises in Europe too, as is demonstrated, e.g., by the emigration of Italian listed companies to the Netherlands in search for a more favourable legislation granting multiple votes to shareholders not holding a real majority.

An issue on which a harmonisation at EU level may be desirable, in an attempt to avoid spontaneous convergence on rules potentially harmful for minorities.