Cross-Border Mergers and Reincorporations in the EU: An Essay on the Uncertain Features of Companies´ Mobility

Cross-border mergers were made feasible in 2005 through the enactment of a specific Directive. In the wake of this directive, companies have been given a relatively neat regulatory framework for merging with other entities incorporated in the EU. Cross-border mergers can also be vehicles for mere reincorporations, when a company establishes a new entity in the target country and merges into it, with the practical result of converting into a company type of the targeted jurisdiction. In a cross-border merger, however, several hidden obstacles might emerge, due to the different regulatory frameworks involved and the discrepancies that may arise regarding the required documents or the procedural timing according to the law of the countries involved. Such discrepancies are, to a certain extent, unavoidable as they also hinge upon nation-specific scholarly and judiciary formants. In practical terms, differences as to regulatory frameworks and language-specific discrepancies risk reducing legal certainty and increasing transaction costs. Therefore, cross-border mergers seem to be a suitable vehicle for re-incorporations of big companies, while small enterprises are likely to find this mechanism burdensome or timeconsuming.