The Court of Justice of the European Union (CJEU) today issued a judgment concluding that EU Member States cannot impose mandatory liquidation on companies that seek to transfer their registered office to another EU Member State. The CJEU found that the transfer of the registered office of a Polish company to Luxembourg, when there is no change in the location of its real head office, falls within the scope of the freedom of establishment protected by EU law.
The case is: Polbud – Wykonawstwo sp. z o.o., C-106/16 (25 October 2017)
As explained in a related CJEU release (PDF 111 KB) a company established in Poland decided to transfer the company’s registered office to Luxembourg, but without transferring to Luxembourg either the place where the company’s business was managed or the place where that company’s business was actually conducted. Because of this action, a liquidation procedure was opened and recorded in the Polish commercial register and a liquidator was appointed.
In today’s judgment, the CJEU found that EU law extends the benefit of freedom of establishment to all companies or firms formed in accordance with the law of an EU Member State and having their registered office, their central administration or principal place of business within the European Union. As such, this includes, in particular, the right of a company to convert itself into a company or a firm governed by the law of another EU Member State.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.