European Union Law: The Free Movement of Services

EU solidarity

The broad concept of EU solidarity is the underlying aspiration of the integration of the people of Europe and is guaranteed by the following freedoms:

Central to the European Union is the concept of unification of nations with the emphasis representing recognition of the autonomy of individual states.

Free movement of services and the internal market

Article 49 of the EC Treaty allows companies from any EU member state to establish themselves in another EU member state and Article 56 allows them to provide services in another EU member state other than the one where the company is established.

The internal market of EU is a single market in which the free movement of goods, services, capital and persons is assured, and in which citizens are free to live, work, study and do business.

Benefits of the single market

Since its creation in 1993, the single market has added 2.2 % to the EU gross domestic product (GDP), increased employment by 2.8 million, and promoted inward investment into the EU economy, according to the European Parliament.

Services Directive

    In 2006, the Services Directive was adopted which was designed to:

  • remove red tape and simplify the establishment of service providers in their home country and abroad;
  • simplify the cross-border provision of services into other EU countries;
  • strengthen the rights of service recipients, in particular consumers;
  • ensure easier access for EU citizens to a wider range of services.

The Directive covers services activities accounting for 46% of EU GDP, including in sectors like retail, tourism, construction and business services. Some services, such as gambling, financial, healthcare and transport services are governed by different rules and do not fall within the scope of the Services Directive.

The Directive helps companies establish themselves more easily in other EU territories by requiring EU countries to:

  • have points of single contact to allow businesses to access information and complete all procedures relating to their activities in one place;
  • make sure all administrative procedures can be completed by mail, phone or electronically;
  • review authorisation schemes concerning access to services and replace the unnecessary ones by less restrictive means. The schemes must be clear and transparent, and authorisation has to be granted for an indefinite period and be valid throughout the whole country;
  • abolish discriminatory requirements such as nationality or residence requirements;
  • abolish  restrictive requirements such as economic needs tests that require businesses to prove to the authorities that there is a demand for their services;
  • review other requirements which are unjustifiably burdensome, such as territorial restrictions or ensuring a business has a minimum number of employees.

Certain requirements can still be imposed on service providers but only when they are non-discriminatory, justified for reasons of public policy, public security, public health or the protection of the environment and do not go beyond what is necessary to achieve their objective.

Professional Qualifications Directive

To prevent EU countries making the access to a particular profession conditional upon the possession of a professional qualification issued within their own territory, the EU established rules to facilitate the mutual recognition of professional qualifications between EU countries.

The Professional Qualifications Directive enables the free movement of professionals such as doctors or architects within the EU. It lays out the methods that professionals can get their qualifications recognized in other member states, as well as rules for establishment and language requirements. Other professions such as sailors, aircraft controllers, lawyers and commercial agents are governed by specific legislation and do not fall under this Directive.

The European professional card

The European professional card (EPC) is an electronic certificate issued via the first EU-wide fully online procedure for the recognition of qualifications. It has been available since January 2016 for five professions – general care nurses, physiotherapists, pharmacists, real estate agents and mountain guides – but might be extended to other professions in the future.

Article written by...
Lucy Trevelyan LLB
Lucy Trevelyan LLB

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Lucy graduated in law from the University of Greenwich, and is also an NCTJ trained journalist. A legal writer and editor with over 20 years' experience writing about the law.