The Fight Against Letterbox Companies in the Internal Market

25 Pages Posted: 12 Aug 2014

See all articles by Karsten Engsig Sørensen

Karsten Engsig Sørensen

Aarhus University – Aarhus BSS, Department of Law

Date Written: August 11, 2014

Abstract

After the seminal judgement in Centros, it seemed that the fight against letterbox companies was lost. The judgement made it clear that it is possible for a company without any substantial activities in the Member State where it is incorporated to exercise the free movement rights when doing business in other Member States. After this judgement, the widespread use of letterbox companies was not encountered by any coordinated effort of the EU, and instead the Member States individually undertook the fight of letterbox companies. However, it is clear that the letterbox companies sometimes interfere with the proper functioning of the internal market. As a result, the EU has recently either adopted or proposed legislation aiming at diminishing the threat of letterbox companies. The article analyses these legislative measures, their backdrop and their impact.

Keywords: Letterbox companies

JEL Classification: K22

Suggested Citation

Sørensen, Karsten Engsig, The Fight Against Letterbox Companies in the Internal Market (August 11, 2014). Nordic & European Company Law Working Paper No. 14-03, Available at SSRN: https://ssrn.com/abstract=2479252 or http://dx.doi.org/10.2139/ssrn.2479252

Karsten Engsig Sørensen (Contact Author)

Aarhus University – Aarhus BSS, Department of Law ( email )

Bartholins Allé 16, Building 1410, Room 246
DK-8000 Aarhus C
Denmark

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