What should a foundation do if it wants to operate in more than one European country? How would a specific, optional European statute help and what type of statute is needed?
The EFC is set to take its first proposal for the development of just such a legal instrument for foundations to the European Commission this month. The Commission plans to carry out a feasibility study for such a statute in the framework of its Action Plan on Company Law in Europe.
The need for a European legal instrument is becoming more urgent in an enlarged Europe. The number of foundations that want to develop transnational cooperation or have engaged in cross-border activity has grown substantially over the last decade. An increasing number of individual and other private funders have activities and assets in various EU Member States. A European statute for foundations could provide a more effective means for these funders to put their philanthropy into practice across Europe.
The EFC proposal calls for an optional European legal instrument, complementary to existing national legislations, which would be mainly governed by European law and would apply only to foundations pursuing a public benefit purpose. The draft currently foresees that a newly created European Foundation (EF) would be registered and supervised at the European level. It would be required to carry out activities in at least two Member States and have a minimum starting capital of €50,000. The EF could carry out various economic activities as long as the revenue is used for the pursuance of its public benefit purpose.
With regard to tax issues, the EFC proposal stresses that the rules applying to the tax treatment of an EF as well as to tax incentives for donors should be clear and user-friendly. In this field, however, the EU has only limited competence. In general, the EF will be subject to the tax regime applicable to public benefit organizations in the Member State where it has its registered office.
For further information contact E Faure, EFC EU Committee Secretariat, at firstname.lastname@example.org