The European Economic Interest Grouping (EEIG)

What is a European Economic Interest Grouping (EEIG)?

Companies from the EU or with a subsidiary in the EU can set up a European Economic Interest Grouping (EEIG) to develop or improve their economic activities together. For example, by bringing together resources, activities and expertise. Profit for the EEIG itself cannot be a goal. That is why an EEIG may not:

• have control over the cooperating companies
• be a holding company of the member companies
• have more than 500 employees
• be a member of another EEIG

How do you set up an EEIG?

A private or (preferably) notarial deed is required for the incorporation contract. It contains the following:

• name of the partnership, preceded or followed by the words 'European Economic Interest Grouping' or 'EEIG'
• location of the registered office
• the purpose of the EEIG
• name, trade name, business structure, place of residence or registered office of each of the members. Is a member registered in a trade register? Then the corresponding number and place of registration must be included in the deed. duration of the partnership. An EEIG without a pre-determined duration period is set up for an indefinite period.

Registration at the KVK

An EEIG established in the Netherlands is a legal entity. This may be different in other EU countries, because the legislation differs from country to country. Registration in the Business Register is mandatory for an EEIG established in the Netherlands.

Board

An EEIG has at least two bodies: the jointly acting members and the director(s). The powers of the board are stated in the articles of incorporation. In principle, each member has one vote. Certain members may have more votes, but no member may have a majority. Both natural persons (individuals) and legal persons may manage an EEIG established in the Netherlands.

Profit distribution

Profit and loss are divided according to the agreements in the cooperation contract, or otherwise in equal parts. It is sensible to include provisions in the cooperation agreement about:

• Adopting the annual financial statements
• The moment at which the members are entitled to profit distribution or have to settle a loss

Liability

All members of an EEIG can be jointly and severally liable with their private assets for all debts in addition to the EEIG. Creditors of individual members cannot claim the assets of the EEIG. Creditors of the EEIG can claim members’ assets if the assets of the EEIG are insufficient.

Taxes

Only an EEIG’s members are liable for tax over the EEIG’s income, either via income tax (natural persons) or corporate tax (legal persons). The EEIG itself does not pay corporate tax.

Social security

In some cases, an EEIG must pay wage tax and contributions for social security for natural persons who are members of the partnership. To what extent this is the case depends on the position these members have in their own company.

Members entering and leaving

The EEIG’s members decide on the admission of new members. New members are also liable for debts incurred by the EEIG prior to joining. A member can only leave the EEIG in accordance with the provisions of the founding agreement, or (if none exist) with the unanimous approval of the other members. Exclusion of a member is possible:

• for reasons stated in the EEIG founding agreement
• in case of serious failure to meet the obligations
• if the partnership has been seriously disrupted or threatens to be disrupted
• Exclusion is only possible through a decision of a judge at the joint request of the majority of the other members (unless the founding agreement provides otherwise). A member who is a natural person also ceases to be a member of a partnership by failing to meet the legal conditions for participation in an EEIG.

More information

To find out if an EU legal structure is a good idea in your situation, consult your legal advisor, or talk to the KVK Advice Team. You can reach the KVK Advice Team on 088 585 22 22, Mon-Fri from 8:30 to 17:00 hours. Calling from abroad? Dial +31 (0)88 585 2222.