Why Do Businesses Incorporate in Other EU Member States? An Empirical Analysis of the Role of Conflict of Laws Rules

32 Pages Posted: 3 Aug 2017 Last revised: 5 Aug 2017

See all articles by Carsten Gerner-Beuerle

Carsten Gerner-Beuerle

University College London - Faculty of Laws

Federico M. Mucciarelli

Università degli studi di Modena e Reggio Emilia (UNIMORE) - Dipartimento di Economia Marco Biagi, Modena; University of London, SOAS, Department of Financial and Management Studies

Edmund-Philipp Schuster

London School of Economics - Law Department

Mathias Siems

European University Institute (EUI); Durham University

Date Written: August 1, 2017

Abstract

Research in law, political science and economics has taken a strong interest in the way companies strategically incorporate in foreign jurisdictions. However, the empirical research about corporate mobility in the EU has so far been limited in two respects: it has focussed on the analysis of foreign companies in the UK and it has mainly been concerned with differences in the costs of incorporation such as minimum capital requirements. This paper aims to fill these gaps. It is the first paper that presents data on incorporations of foreign businesses in the commercial registers of each EU Member State. It is also the first one to assess the impact of differences in the conflict of laws rules applicable to companies as they reflect the case law of the Court of Justice on the freedom of establishment. It finds that countries which have a clear-cut version of the ‘incorporation theory’ attract more incorporations than countries which have retained elements of the ‘real seat theory’. The paper also discusses the policy implications that follow from these findings for EU harmonisation in this field.

Keywords: Freedom of establishment, market for incorporations, corporate mobility, conflict of laws, pri-vate international law

JEL Classification: D22, G38, K15, K22, K34, L29, M13

Suggested Citation

Gerner-Beuerle, Carsten and Mucciarelli, Federico M. and Schuster, Edmund-Philipp and Siems, Mathias, Why Do Businesses Incorporate in Other EU Member States? An Empirical Analysis of the Role of Conflict of Laws Rules (August 1, 2017). ECGI - Law Working Paper No. 361/2017. Available at SSRN: https://ssrn.com/abstract=3012139

Carsten Gerner-Beuerle (Contact Author)

University College London - Faculty of Laws ( email )

Gower St
London WC1E OEG, WC1E 6BT
United Kingdom

Federico M. Mucciarelli

Università degli studi di Modena e Reggio Emilia (UNIMORE) - Dipartimento di Economia Marco Biagi, Modena

Viale Berengario 51
Modena, Modena 41121
Italy

University of London, SOAS, Department of Financial and Management Studies ( email )

Thornhaugh Street
London, WC1H 0XG
United Kingdom

Edmund-Philipp Schuster

London School of Economics - Law Department ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Mathias Siems

European University Institute (EUI) ( email )

Via Bolognese 156 (Villa Salviati)
Firenze, 50139
Italy

HOME PAGE: http://www.eui.eu/siems

Durham University ( email )

Stockton Road
Durham, County Durham DH1 3LE
United Kingdom

HOME PAGE: http://www.dur.ac.uk/mathias.siems

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