Choosing the right structure for doing business in Europe

What are European Economic Interest Groupings?

European Economic Interest Groupings (EEIGs) enable companies, other legally constituted bodies or individuals from different European Union (EU) member states to work together. An EEIG, which has a separate identity from its members, exists to support its members' economic activities. It can be set up and operate in any EU member state, and is subject to EU and national competition laws. Read more aboutĀ how to set up a European Economic Interest Grouping.

The advantages of an EEIG are that it:

  • works for the members
  • can enter into contracts on behalf of all its members
  • can be financed by members who instead provide their skills and services, if they don't have capital to invest

The disadvantages of an EEIG are that members:

  • have joint and separate unlimited liability for the EEIG
  • have to raise all funding for the EEIG

Membership and management of an EEIG

An EEIG must have at least two members from different EU member states. They must carry out their main economic activity in different member states and have a history of economic activity in the EU before joining an EEIG.

Companies and other legal bodies who want to become members of an EEIG must be legally constituted according to an EU member state's laws and have their registered office and central administration within the EU.

The EEIG's contract of formation must include at least the following information about the EEIG:

  • its full name and official address
  • the group's objects and duration (unless this is indefinite)
  • each member's name, business name, legal form, and permanent address or registered office
  • each member's number and place of registration (if any)

The contract of formation must give each member at least one vote. Unanimous decisions are needed to make the following changes to:

  • the group's objects and duration
  • each member's number of votes
  • members' obligations, and contributions to EEIG costs
  • other changes to the contract of formation
  • moving the official address to another member state

Members should appoint at least one EEIG manager. Members define the limits of management's powers and are liable for managers' actions.

What an EEIG cannot do

An EEIG must be formed to support the economic activities of its members and not itself. As a result, an EEIG cannot:

  • be primarily formed in order to make a profit - although if in carrying out its activities it makes a profit, this is acceptable
  • control activities of its members, or of any other undertaking
  • hold shares in any of its members
  • take investment from the public
  • be a member of another EEIG
  • employ more than 500 people
  • violate national laws about lending money to a company director or any connected person and transferring money between a company and a director or any connected person

EEIG accounting

EEIGs registered in the UK don't have to file an annual return with Companies House, but they do have to make a return to HM Revenue & Customs.