European Foundation : New Statute to Facilitate Foundations' Activities
To abolish cross-border barriers encountered in the EU by public benefit foundations, the European Commission proposed, on 8 February, a regulation establishing a legal statute for such bodies. Only foundations having a public benefit purpose (the only type of foundation recognised in all the member states) are covered by the proposal. This new legal form - the European foundation' (FE) - will co-exist with foundations formed under national law.
The Council will have to adopt the regulation unanimously after consulting the European Parliament (Article 352 TFEU).
"We need to support and encourage the valuable work that foundations do for European citizens. The introduction of a European statute will reduce costs and uncertainty. It will also allow foundations to benefit from more visibility to promote their activity and attract more funding thanks to a European label," explained Internal Market Commissioner Michel Barnier. He stressed the importance of allowing the development of these key players in the social economy which, beyond their human and moral potential, represent considerable economic potential.
The 110,000 public benefit foundations in the EU account for 15% of European GDP, invest 83 billion per year in the Union (more than in the United States) and have between 750,000 and one million paid employees plus some one million volunteers. They are active in a range of sectors: social services, education, research, health, culture, environmental protection, human rights, etc. Although foundations generally carry out their activities at regional or national level, they are increasingly developing their activity in other member states. In doing so, they find themselves confronted with very different legal or taxation situations, which can give rise to conformity costs that jeopardise their effectiveness and limit possibilities of accepting donations from another EU state. A 2008 study carried out for the Commission by the Max Planck Institute for Comparative and International Private Law and the University of Heidelberg estimated the cost for foundations of such cross-border activities at between 90 million and 101.7 million a year.
The new statute lays down the main requirements for establishing a European foundation: proving its public benefit purpose, having a cross-border activity in at least two member states and being in possession of assets of at least 25,000 at the time of its founding. …