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Promoting projects that benefit society at large: the European Foundation Statute

Foundations pursue objectives benefiting the public at large. Their activities focus on areas that are important for European citizens and the European economy. For instance, they are active in social and health services; they foster research and promote culture. To this end, foundations award grants and run projects. However, differences between and obstacles in national laws often make the conduct of their cross-border activities costly and cumbersome. When they decide to operate abroad, for example, foundations often have to spend a part of their resources on legal advice and fulfilling legal and administrative requirements laid down by the different national laws across the EU. This diminishes the amount of funding available to foundations for the purpose of activities benefiting the public at large and can deter them from further developing their work.

The Commission has presented recentlya proposal for a European Foundation Statute to make it easier for foundations to support public benefit causes across the EU.

Internal Market Commissioner Michel Barnier said "We need to support and encourage the valuable work that foundations do for European citizens. In particular, we need to remove the obstacles which hinder their cross-border work on issues such as research, health or culture. 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. "

The proposal seeks to create a single European legal form - the ‘European Foundation’ (FE) – which would be fundamentally the same in all Member States. It would exist in parallel with domestic foundations. Acquiring the status of a European Foundation would be entirely voluntary.

Scope: the Statute focuses on public benefit purpose foundations, which make up the great majority of the foundation sector and which are present in and recognised by all Member States.

Main requirements for the FE: the Statute lays down the main requirements for the European Foundation. For instance, each FE would need to prove its public benefit purpose, cross-border dimension and that it possesses the minimum founding assets of €25 000.

How can FEs be formed: The European Foundation can be set up from scratch, by converting a national foundation into a European Foundation or through a merger of national foundations. FE acquires a legal personality upon its registration in a Member State.

Benefits of becoming a European Foundation:

Reducing costs and uncertainty: European Foundations will have legal personality and legal capacity in all Member States. This new status will allow them to carry out activities and channel funding within the EU in an easier and less costly way, thanks to the similar rules applied to them throughout the EU.

European label: the Statute would provide the FE with a European label and image, which should make European Foundations recognisable and trustworthy, and hence encourage foundations’ cross-border activities as well as cross-border donations.

Tax treatment: European Foundations will benefit from the same tax regime as the one applicable to the domestic ones. Donors supporting European Foundations will be entitled to the same tax benefits as if they were donating to a foundation established in their own Member State. In both cases, Member States would need to regard the FE as equivalent to public benefit purpose foundations established under their own national legislation.

Background

The European Foundation Statute was announced in the Single Market Act (IP/11/469). The Single Market Act stressed foundations' contribution to the financing of innovative initiatives in the public interest and called for action to overcome the difficulties foundations face when operating across the EU.

This proposal draws on the research carried out by the Commission through a feasibility study1, two public consultations2 (IP/09/270; IP/10/1390) and contacts with the foundation sector.

See also MEMO/12/79

For further information:

http://ec.europa.eu/internal_market/company/eufoundation/index_en.htm

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