KPAG • Rechtsanwälte

EC Introduces Further Measures to Boost International Business

Publiziert am 2.August.2013 von Abraam Kosmidis
Lawyers provide a professional source of expertise that will be beneficial to most businesses during their operational lifetimes, whether it is to do with the start-up of their business, employment law related issues, debt recovery or registering a patent or trade mark.Expert legal advice becomes even more important when a company is looking to conduct business in another country, such as Greece, where the legal requirements may be different from the organisation’s home country and local professional knowledge is essential to avoid falling foul of any of these unfamiliar laws.Understanding local tax lawsOne area that could prove very costly for businesses to get wrong when operating overseas is that of tax law. The rules and regulations relating to business taxes can vary from country to country, and companies can find themselves facing severe financial penalties if they misinterpret their liabilities and fail to pay the correct amount of tax at the required time.Local expert knowledge is invaluable when it comes to ensuring that national law is complied with. In Greece, the lawyers at Kosmidis & Partners have in-depth working knowledge of Greek tax law and can advise overseas businesses on their tax liabilities for any operations that take place in Greece.The payment of the correct tax is a concern for all European countries, including Greece, and the European Commission (EC) has recently taken action to tackle the problem of tax evasion and avoidance by setting up its ‘Platform for Tax Good Governance’.The purpose of the Platform is to track the progress of each Member State in meeting Recommendations set out by the Commission last year, including:
  • Taking a strong stance against tax havens over and above the existing international measures, by identifying existing tax havens and putting them on national blacklists.
  • Aggressive Tax Planning, which suggests ways of blocking off openings used by companies to avoid paying tax, such as strengthening the anti-abuse provisions in bilateral tax treaties and the use of both national and EU corporate legislation. Under this recommendation, Member States are advised to ignore any artificial arrangement put in place by companies for the purposes of tax avoidance and instead to tax these companies based on actual economic substance.
"In battling tax evasion, we are battling to protect the fairness of our tax systems, the competitiveness of our economies and the solidarity of our Member States,” explained Algirdas Šemeta, Commissioner for Taxation, Customs, Statistics, Audit and Anti-Fraud.“There is too much at stake for this battle to be lost. The renewed vigor amongst Member States to take up this fight is more than welcome. It must now be channeled into action,” he added.Overseas companies operating in Greece are advised to contact the lawyers at Kosmidis & Partners for expert advice on how corporate tax liabilities are affected by both the country’s national laws and European regulations.Greece improves global rankingsAs a country, Greece continues to benefit from direct intervention from Europe that has been designed to boost the country’s trade prospects and wider economy. In June of this year, the European Investment Bank agreed to provide up to €500 million in trade financing to support small and medium sized companies (SMEs) in Greece in their international trade operations.These interventions, together with internal improvements made by the country’s governing authorities themselves, are having a very positive impact and increasing Greece’s attractiveness as a destination for international business. So much so in fact that the 2013 Doing Business report from the World Bank Group, which tracks the impact of regulatory reform on business in 185 different economies, found that the improvements to its business climate have been so successful that Greece is included in the list of the ten most improved countries globally for 2011/12.Facilitating the management of business insolvencyAnother recent European development that could potentially affect overseas businesses operating in Greece relates to the issue of business insolvency. Member States have very different rules and regulations governing this subject, and this divergence can have a negative impact on cross-border trade and investment.The EC recognises how difficult it can be for businesses to remain prosperous in these difficult economic times. Figures from the EC show that as many as 200,000 businesses go bust every year across the EU on average, and up to 25% of these bankruptcies involve an element of cross-border operations.In December 2012 the EC published details of proposals to reform insolvency laws, and committed to look further at the problem of how best to manage business failure across Europe in light of the fact that different national laws were so diverse on the subject.As a follow up to this commitment, the EC has now launched a consultation on a common European approach to business insolvency, which seeks views on a number of important issues, including:
  • Harmonizing the “time to discharge” (how long it takes to close a business that has failed), which can have a significant impact on whether the business can be restarted. This timing currently varies widely across the EU from four months to as much as six years, and some countries make no provision at all for a failed entrepreneur to ever obtain a discharge.
  • The rules that control the exercise of the profession of liquidators.
  • Whether problems are created by the current rules governing the duties and liability of directors in insolvency.
  • Whether EU rules are required to ensure that fraudulent managers who are disqualified from managing a company in one country are also automatically prevented from doing so in another Member State.
The consultation also asks “whether the legal uncertainty arising from the different conditions under which an act of an insolvent debtor which is detrimental to their creditors can be avoided before national courts has created problems in practice.”Debt recovery and insolvency is a serious matter in Greece, as with the rest of the EU, and the correct interpretation of the different rules and regulations can have important implications for businesses operating in Greece.Contact Kosmidis & Partners law firm today for expert professional advice from our English speaking lawyers on any disputes relating to these subjects, or for any other legal issue that might arise through overseas business operations in Greece.

Supporting International Businesses Operations

Publiziert am 23.April.2013 von Abraam Kosmidis

Like many other European countries, Greece welcomes business and investment from overseas, but for many small and medium sized enterprises (SMEs) the prospect of operating outside the borders of its own country can be very daunting.

This uncertainty can be caused by a number of factors, including possible language difficulties, cultural differences, a lack of knowledge of the legal systems operating in other countries and the need to source local expert advice from professionals such as lawyers or accountants.

In the current economic downturn, going abroad to countries such as Greece to do business can offer a life-line to companies struggling to find a big enough customer base in their home country. Many businesses may also be finding that they have no choice but to operate abroad if they wish to remain competitive. The European Union has a population of around 500 million, making it one of the biggest marketplaces in the world and an ideal destination for ambitious companies that are eager to expand their business operations.

One particular fear SMEs may have about operating internationally is how to ensure they receive payment for the goods or services they provide to customers in another country. If payment is not forthcoming and a debt recovery situation develops, the company may be unsure how to go about finding a lawyer and taking legal action to ensure all money owing to it is recovered.

The European Commission (EC) is aware that these issues and concerns can create barriers to overseas business, and is taking action to promote the operation of SMEs across international borders.

International debt recovery

One such measure from the EC is the launch of a new initiative that aims to support SMEs in recovering debts across borders, by advising them how to make use of existing laws and mechanisms to effectively tackle overseas debtors. The campaign is running in Greece as well as the other 26 EU Member States, and also in Croatia.

"With this campaign we wish to encourage small enterprises to operate beyond their borders,” explained European Commission Vice President Antonio Tajani, who is responsible for Industry and Entrepreneurship. “Facilitating the recovery of cross-border debts is the key to addressing this issue at a time when Europe’s 21 million SMEs face particular obstacles to tapping cross-border markets.”

“Their uncertainties are mainly due to the lack of knowledge of existing mechanisms for reducing the risk involved in cross border contracts, insufficient credit management processes, or even cultural differences in doing business between different Member States," he added.

Using existing laws

There are already a number of laws in place across the EU that are designed to support businesses in dealing with cross-border disputes that could potentially lead to litigation.

These laws have been developed to help businesses resolve issues such as contractual obligations and to establish competent jurisdiction in the event of a dispute.

In determining cross-border contractual obligations in the EU, the principle of free choice of law applies. This principle says that:

“If no law is chosen by the parties, the law applicable to sales contracts in respect of movables, services, franchise or sales contracts will be determined by the domicile of the party providing the characteristic performance.”

In terms of competent jurisdiction, EU laws dictate that in a dispute, jurisdiction will usually rest with the court of the country in which the defendant is domiciled. If an SME is in a situation where it needs to enforce a cross-border claim in court, the court of the country in which the customer is domiciled will normally be deemed to be the competent court. However, in certain situations it may also be possible for the SME to take legal action in another Member State’s court.

Procedures are also already in place in EU Member States to help businesses in debt recovery across international borders.

Legal expertise at a local level

Each Member State may apply these EU laws and procedures slightly differently, and understanding these complexities can be challenging for businesses looking to operate internationally. Law firms in Greece such as Kosmidis & Partners Law Firm have English speaking lawyers that are fully qualified to help overseas businesses overcome these barriers. Our lawyers can advise companies operating in Greece in the interpretation and application of these laws to ensure any business transactions, including debt recovery, are conducted as quickly and efficiently as possible.

Improving trade mark registration

The EC has also recently taken action to improve the trade mark registration system across the EU.

Trade marks are an important legal tool, and a properly registered trade mark can become one of a company’s most important assets. It allows a business to distinguish itself from its competitors and gain a real competitive edge by:

  • enabling customers to easily identify the source of the goods or services,
  • providing customers with a guarantee of consistency and quality, and
  • assisting in a company’s marketing and advertising strategy by forming a key part of a company’s brand identity.

Failing to properly register a trade mark could have very serious consequences for a business. It could allow a competitor to seize the opportunity to register the trade mark for itself and use it to promote its own goods and services.

The level of demand for trade mark protection across the EU is very high. Figures from the EC show that there were approximately 540,000 trade mark applications made in 2011. The figures also show that, as of March 2013, there were around 9.8 million trade marks listed in registers throughout the EU.

In light of how important trade marks are for business, the EC has proposed a series of reforms that are designed to encourage business innovation by ensuring companies have greater trade mark protection against counterfeits.

"Trade marks were the EU’s first success in intellectual property rights,” said Internal Market and Services Commissioner Michel Barnier. “The harmonisation of Member States' laws in 1989 and the creation of the Community trade mark in 1994 paved the way for other tools for intellectual property protection, such as design protection and the unitary patent.”

“Today, 20 years later, I am very proud to announce that our trade mark system has stood the test of time. There is no need for a major overhaul: the foundations of our system remain perfectly valid. What we are aiming for is a well-targeted modernisation to make trade mark protection easier, cheaper, and more effective," he concluded.

The EC’s proposed revisions include:

  • Streamlining and harmonising the trade mark registration procedure across all Member States, and using the existing Community trade mark system as a benchmark;
  • Bringing the existing provisions up to date, and increasing legal certainty by removing any ambiguities and incorporating the case law that has been established over time by decisions of the Court of Justice of the European Union;
  • Enhancing the tools that are available to tackle the problem of counterfeit goods being transported across the EU; and
  • Putting measures in place to encourage greater cooperation between the trade mark offices located in each Member State and the EU trade mark agency (the Office for Harmonisation in the Internal Market). This would allow for a greater convergence off their practices and enable common tools to be developed.

According to the EC, these changes would make trade mark systems across Europe more accessible and efficient, and would therefore encourage business innovation and growth.

Kosmidis & Partners Law Firm has a team of highly experienced lawyers that are able to advise clients on all aspects of trade mark law in Greece, including the registration of a trade mark and how to seek damages in the event of a breach of trade mark protection.

Next steps

The EC’s trade mark proposals will now be passed to the European Parliament and the European Council for adoption. The EC hopes the new proposals will be adopted by the spring of 2014. Member States will then have two years to implement the new rules of the Directive into national law.

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