1. What is the Services Directive?

The Services Directive is a European piece of legislation that aims to make life easier for businesses providing or using services in the European Union. It requires all EU countries to lift legal and administrative barriers. It facilitates:

• The establishment of businesses in the services sector, i.e. cases where an individual entrepreneur or business wants to set up a permanent establishment (such as a company or a branch) in its own country or in another EU country.

Examples: a carpenter from Hungary who wants to establish a business in Sweden, or a Spanish company that wants to set up a new retail store in its own country.

• The cross-border provision of services, i.e. cases where a business already established in an EU country wants to supply services in another EU country, without setting up a permanent establishment there.  

Examples: an architect established in France is commissioned to design a house in Sweden, or an event-organiser from Sweden wants to run an open air festival in Estonia.

Link to the Services Directive  

2. Services within scope of the Services Directive

The Directive applies to the provision of a wide range of services. For example, it covers:

• Distributive trades (including retail and wholesale of goods and services)
• Construction services
• Craft services
• Most professional services (such as the services of legal and fiscal advisers, architects, veterinaries)
• Business-related services (such as advertising, recruitment services, patent agents)
• Tourism (such as travel agencies, tourist guides)
• Accommodation and food services (hotels and restaurants)
• Training and educational services (such as private universities, language schools)
• Real estate services
• Household support services
• Rentals and leasing services (including car rental)
• Leisure services (e.g. sports centres and amusement parks)
• Information society services (e.g. publishing – print and web, news agencies, computer programming)    

The basic rule is that a service is within scope of the Directive, unless it is explicitly excluded from it. The following services are excluded:

• Financial services (such as banking, credit, insurance and re-insurance, occupational and personal pensions, securities, investment funds, payment and investment advice, including the business of credit institution).
• Electronic communications services
• Transport services (including air transport, maritime and inland waterways transport, including port services, as well as road and rail transport, in particular urban transport, taxis and ambulances)
• Healthcare services (healthcare and pharmaceutical services provided by health professionals to patients to assess, maintain or restore their state of health where those activities are reserved to a regulated health profession)
• Audiovisual services (including cinemas and broadcast services)
• Gambling
• Certain social services provided by the State, by providers mandated by the State or by charities recognised as such by the State
• Private security services
• Services provided by notaries and bailiffs (appointed by an official act of government)
• The exercise of official authority as set out on Article 45 of the Treaty
• Services of a general economic interest (such as the Post Office), non-economic services of a general interest and taxation are also excluded from the Directive

3. New opportunities for businesses

The Services Directive aims to make it easier for businesses both to set up in EU Member States and to provide services across-borders or on a temporary basis. Each country must:

• Set up “Points of Single Contact” through which businesses can obtain information and complete the necessary formalities when doing business in the Member State in question
• Abolish restrictive and legislation and practices that hinder service providers from setting up in or providing services within the EU
• Co-operate with administrations in other EU countries to avoid duplication of control on businesses and thereby significantly reduce the administrative burden on businesses 
• Engender consumer confidence in cross-border service provision through access to information and the high quality of services

What are the concrete benefits for you? You can:

• Set up a new business or branch under simpler and faster procedures, in your own country or in another EU country
• Easily offer services in other EU countries without having to set up a business there
• Obtain information and complete administrative procedures through one place in each country (‘Point of single contact’)

4. Points of Single Contact in every EU country- a single place where you can obtain information and complete procedures from your office or home

The Services Directive obliges all EU countries to set up Points of Single Contact (PSC) for service providers and service recipients. When starting or expanding a business you are no longer required to deal with a multitude of authorities at various levels— you can complete procedures required to do business through ‘Points of Single Contact’:

• Clear and exhaustive information on procedures and specific requirements
• Functions for the service provider to complete the required administrative procedures and formalities online, file requested information and documents, and receive decisions and permits electronically.
• You can file requested information and documents

Example
A construction company from Poland wants to establish a business in Sweden. Managers can go to the website of the Swedish Point of Single Contact and obtain information on the requirements in Sweden for opening a branch. The Polish company can then file all the required documents, applications etc. electronically via the Point of Single Contact and will be communicated with by the same route.
Similarly, a Swedish company wanting to open a branch in its own country will be able to file all the required documents, applications etc. electronically via the Swedish Point of Single Contact in the same way.

Link to other EU/EES countries Points of Single Contact

5. The European Services Sector

 
Accounting for around 70 per cent of GDP and employment, the services sector is the largest sector of the European economy, and the one where the great majority of new jobs are created. However, services account for only 20 per cent of the total trade within the EU. To help realising the full potential of the services sector, the Services Directive was adopted in December 2006.
Small and medium-sized enterprises represent around 98 per cent of all companies in Europe and are the main source of growth and job creation. The vast majority of operate only in their own local or national markets. There are instances where this is a business choice, but there are also instances where this is because of multiple legal and administrative barriers in EU countries making expansion beyond national markets costly and time-consuming. These barriers include:

– difficulties in obtaining information about formalities,
– need to contact a large number of authorities for various authorisations,
– long and complicated procedures.