Tag Archives: Self-employment

Limitations on the admission of third-country nationals for the purpose of pursuing activities as self-employed persons

Limitations on the admission of third-country nationals for the purpose of pursuing activities as self-employed persons

Outline of the Community (European Union) legislation about Limitations on the admission of third-country nationals for the purpose of pursuing activities as self-employed persons

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Living and working in the internal market

Limitations on the admission of third-country nationals for the purpose of pursuing activities as self-employed persons

To lay down principles to guide the Member States in the application of the policy on admission for the purpose of pursuing activities as self-employed persons.

2) Union Measures

Council resolution of 30 November 1994 relating to the limitations on the admission of third-country nationals for the purpose of pursuing activities as self-employed persons.

3) Contents

The Council recalls that, in the report on immigration and asylum adopted by the Maastricht European Council in 1991, priority was given to the harmonisation of policies on admission for the purpose of pursuing self-employed occupation. The 1994 work programme in the field of justice and home affairs also included, as a priority measure, a decision to conclude the deliberations on the admission of self-employed persons.

The approach adopted by the Member States (Part A of the resolution) is to admit, for the purpose of pursuing self-employed occupation, only those third-country nationals who add value (investment, transfer of technology, job creation) to the economy of the host country. The general criteria for examining requests for admission of third-country nationals in search of employment are set out in Part C of the resolution. The main criterion is that Member States may allow third-country nationals wishing to pursue activities as self-employed persons to enter their territory where it has been duly established that that activity will benefit the economy of the host State.

Part C contains guidelines on the admission procedure. The admission procedure should ensure that persons who quite obviously wish to engage in paid employment or whose partnership or directorship amounts to disguised paid employment are not admitted as self-employed persons. Requests for admission must be accompanied by the following:

  • documents indicating the nature, scale and duration of the activity the person wishes to engage in;
  • documents indicating the number of staff likely to be required;
  • a description of the premises where the activity will be carried out; such premises must be appropriate for the activity concerned;
  • evidence of the funds available for the intended purpose.

The following could for example be required for assessing compliance with legislation in force, in accordance with national legislation:

  • proof that the self-employed person meets the conditions of the host Member State regarding professional qualifications and access to the occupation;
  • in the case of companies or firms, the instrument of incorporation, evidence of publication or registration thereof, and the names of the directors and managerial staff of the associates authorised to act on their behalf;
  • proof such as police documentation or similar documents, showing the integrity of the person concerned.

Authorisation to engage in a self-employed activity will be granted in accordance with the provisions of national aliens legislation and in writing, for example in the form of a passport stamp or other document. Such authorisation will be personal and non-transferable.

All requests for renewal must, where so required under Member States’ national legislation, be accompanied by documentary evidence that the self-employed person offers guarantees for the continued orderly pursuit of his occupation.

Persons already present in the territory of a Member State as students, trainees, seasonal workers, service providers, contract workers or for other reasons will not as a general rule be permitted to extend their stay for the purpose of establishing themselves as self-employed persons. Such persons must leave the country once the purpose of stay on the basis of which there were given leave to enter the country has ceased to apply.

Nothing in the resolution prevents any Member State from reserving the right to admit to its territory, in compliance with its national legislation, third-country nationals who make substantial investments in the commerce and industry of that Member State if there are important economic grounds for derogating from the principles of the resolution.

The resolution concerns only individuals and does not affect the setting up of firms.
“Activity as a self-employed person” means any activity carried out in a personal capacity or in the legal form of a company or firm within the meaning of the second subparagraph of Article 58 of the EC Treaty, without the person concerned being answerable to an employer in either case.
Only those associates who are actively involved and whose presence is essential to the achievement of the company’s or firm’s aims and to its management may be authorised to establish themselves in the host Member State’s territory.

The resolution does not apply to (Part B of the resolution):

  • persons who have right of free movement under Community law and members of their families;
  • third-country nationals who have been allowed admission for the purpose of family reunification.
  • third-country nationals whose access to employment is covered by rights stemming from agreements concluded with third countries which are governed by Community law;
  • third-country nationals entering the Member States in order to engage in paid employment;
  • third-country nationals entering the Member States for study purposes.

4) Deadline For Implementation Of The Legislation In Member States

5) Date Of Entry Into Force (If Different From The Above)

09.10.1996

6) References

Official Journal C 274 of 19.09.1996

7) Follow-Up Work

8) Implementing Measures

Safeguarding supplementary pension rights

Safeguarding supplementary pension rights

Outline of the Community (European Union) legislation about Safeguarding supplementary pension rights

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Employment and social policy > Social protection

Safeguarding supplementary pension rights

Document or Iniciative

Council Directive 98/49/EC of 29 June 1998 on safeguarding the supplementary pension rights of employed and self-employed persons moving within the Community.

Summary

This Directive applies to members of supplementary pension schemes and others holding entitlement under such schemes who have acquired or are in the process of acquiring rights in one or more Member States.

This Directive provides for four main measures to safeguard the supplementary pension rights of workers moving within the Community:

Equality of treatment as regards preservation of pension rights

Member States must, for persons who have left a supplementary pension scheme as a consequence of going to work in another Member State, take the necessary measures to ensure the preservation of vested pension rights to the same extent as for persons in respect of whom contributions are no longer being made but who remain within the same Member State.

Cross-border payments

Member States shall ensure that supplementary pension schemes make payment in other Member States, net of any taxes and transaction charges, of all benefits due under these supplementary schemes.

Posted workers and supplementary pensions

Posted workers have the option of remaining within the pension scheme in their country of origin during the period of posting in another Member State. Posted workers and, where applicable, their employers are thus exempted from any obligation to make contributions to a supplementary pension scheme in another Member State.

Information to scheme members

Employers, trustees or others responsible for the management of supplementary pension schemes shall provide adequate information to scheme members, when they move to another Member State, as to their pension rights and the choices which are available to them under the scheme.

Background

While coordination of social security schemes allows migrant workers to fully preserve their accrued statutory pension rights, the portability of supplementary pensions (both occupational schemes and group insurance contracts) still needs to be improved.

In a Communication in 1991, the Commission opened the debate on supplementary pensions and gave a high-level group the task of identifying obstacles to the free movement of workers. The group concluded that legislative measures were needed but that these should be restricted to the following three areas:

  • preservation of vested rights;
  • cross-border payments;
  • easier access for posted workers.

The Commission continued the discussions with all bodies involved in relation to the Green Paper on supplementary pensions published in June 1997 and confirmed the need for an act covering the aspects set out in this Directive.

Key terms used in the act
  • ‘Supplementary pension’ means retirement pensions and, where provided for by the rules of a supplementary pension scheme established in conformity with national legislation and practice, invalidity and survivors’ benefits, intended to supplement or replace those provided in respect of the same contingencies by statutory social security schemes.
  • ‘Supplementary pension scheme’ means any occupational pension scheme established in conformity with national legislation and practice such as a group insurance contract or pay-as-you-go scheme agreed by one or more branches or sectors, funded scheme or pension promise backed by book reserves, or any collective or other comparable arrangement intended to provide a supplementary pension for employed or self-employed persons.

References

Act Entry into force Deadline for transposition in the Member States Official Journal

Directive 98/49/EC

25.7.1998

25.1.2002
25.5.2001 Article 6

OJ L 209 of 25.7.1998

Related Acts

Green Paper of 7 July 2010 towards adequate, sustainable and safe European pension systems [COM(2010) 365 final – Not published in the Official Journal].

Amended proposal for a Directive of the European Parliament and of the Council on minimum requirements for enhancing worker mobility by improving the acquisition and preservation of supplementary pension rights [COM(2007) 603 final – Not published in the Official Journal].

Development of micro-credit

Development of micro-credit

Outline of the Community (European Union) legislation about Development of micro-credit

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Enterprise > Business environment

Development of micro-credit

Document or Iniciative

Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions of 13 November 2007 – A European initiative for the development of micro-credit in support of growth and employment [COM(2007) 708 final – Not published in the Official Journal].

Summary

In Europe, micro-credit – i.e. loans of less than € 25 000 – is aimed at micro-enterprises (enterprises employing fewer than 10 people) and disadvantaged persons (unemployed or inactive people, those receiving social assistance, immigrants, etc.) who wish to go into self-employment but do not have access to traditional banking services.

Micro-credit can promote the transition from unemployment to self-employment and offers access to finance for persons whose projects the banks refuse to finance because of insufficient collateral. It can thus play a key role in implementing the Lisbon Strategy for Growth and Jobs.

Nevertheless, even if micro-credit has been on the increase for a number of years in the Member States of the European Union (EU), much remains to be done to enable this instrument to develop its full potential.

Therefore, the EU is proposing an initiative aimed at developing the market for micro-credit. The initiative comprises four strands:

  • improving the legal and institutional environment in the Member States;
  • further changing the climate in favour of entrepreneurship;
  • promoting the spread of best practices, particularly in relation to training;
  • providing additional financial capital for micro-credit institutions.

First strand: improving the legal and institutional environment in the Member States

The institutional framework in the Member States does not always allow micro-credit to develop in a positive way. Indeed, the specific nature of micro-credit is not generally taken into account in national or Community legislation. The Commission therefore encourages the Member States to take the measures needed to create a legal, institutional and business environment which is more conducive to the development of micro-credit. With this in mind, the Commission proposes that the Member States:

  • create an environment allowing the development of micro-finance institutions (MFIs) and covering all segments of the clientele. Given the number and diversity of potential clients, MFIs should have easy access to financial resources allowing them to develop micro-credit. MFIs are financed through grants and donations and, where appropriate, bank loans. They are certain to benefit from the creation of a suitable environment in which they are more visible;
  • help micro-credit to become sustainable by relaxing interest caps for micro-credit operations. In the Member States where they exist, interest rates should be fixed at a fairly high level in order that lending institutions can cover their costs, while regularly evaluating the social and economic impact in order not to jeopardise the security of borrowers;
  • reduce operating costs by applying favourable tax schemes. More favourable tax schemes (tax exemptions, tax reductions, grants) are important for the development of micro-credit;
  • adapt national regulation and supervision to the specificity of micro-finance. If they receive deposits, MFIs are subject to Community prudential regulation and are supervised accordingly. In order not to put a brake on the supply of micro-credit and the growth of MFIs not receiving deposits from clients, the new regulations and supervision must take account of their costs and the risks which MFIs pose.

Second strand: further changing the climate in favour of entrepreneurship

In order to encourage Europe’s shift towards an economy based on knowledge, services and new technologies, and to create a climate more conducive to entrepreneurship, the Commission proposes that the Member States:

  • improve the institutional framework for self-employment and micro-enterprises. Equal treatment for the self-employed and wage-earners is essential. Nevertheless, a programme of publicity and awareness-raising should be set up in order that self-employment and micro-enterprises are better recognised. To this end, legal, tax and administrative barriers should be lowered (e.g. exemption from social insurance charges, simplified registration procedures, improved access to more numerous and less expensive outlets);
  • increase the chances of success of new micro-enterprises through training, mentoring and business development services. The micro-enterprise environment is a complex one and demands a supply of business development services because those starting up in business do not always have all the competencies required in order to be successful. Training and mentoring are therefore needed to improve a start-up entrepreneur’s chances of success.

Third strand: promoting the spread of best practices

Promoting the spread of best practices for MFIs is a key element in the initiative to encourage micro-credit. The Commission therefore proposes to set up a new body to provide technical assistance and support the development of non-bank MFIs in the Member States. This new body would have the task of:

  • laying down a code of conduct for MFIs. Such a code would serve to increase confidence in MFIs and spread ethical and customer-friendly best practices among them. The quality of an MFI would thus be assessed on the basis of its social and financial performances and its business practices;
  • introducing a specific “micro-credit” label to create awareness among EU citizens. This label would enable the attention of investment funds dedicated to micro-credit to be focused more on MFIs which perform well, and improve citizens’ confidence in microfinance investment vehicles and steer new resources towards MFIs with the best social and financial performance;
  • providing information on this initiative and handling the publicity;
  • publishing brochures and organising conferences;
  • providing technical manuals, guides and software designed to help MFIs adopt best practices;
  • providing easier access to finance for MFIs by mobilising financial resources.

Fourth strand: providing additional financial capital for new non-bank MFIs

The Commission proposes to set up a support structure within the JEREMIE department of the EIF for the purpose of providing technical and financial support to promising non-bank MFIs. This micro-fund would have the aim of assisting MFIs to become self-sustaining and would help to increase the use of micro-credit in Europe and further develop this sector.

Context

This initiative seeks to promote the sustainable development of micro-credit in the EU and forms part of the Lisbon Strategy for Growth and Jobs, and of the policy of encouraging entrepreneurship and economic initiative, the policy of promoting “flexicurity” and the inclusion of disadvantaged persons, and the policy of developing human capital and renewing trust-based social links.

Related Acts

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 27 June 2007 – Towards Common Principles of Flexicurity: More and better jobs through flexibility and security [COM(2007) 359 final – Not published in the Official Journal].

from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions of 29 June 2006 – Implementing the Community Lisbon Programme: Financing SME Growth – Adding European Value [ final – Not published in the Official Journal].

Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions (recast) [Official Journal L 177 of 30.6.2006].

Directive 2006/49/ECof the European Parliament and of the Council of 14 June 2006 on the capital adequacy of investment firms and credit institutions (recast) [Official Journal L 177 of 30.6.2006].