Freedom of establishment of companies has always been a delicate area of EU law. The challenge of achieving political consensus has delayed the process of harmonization and prompted creative adjudication. The CJEU, particularly in the Polbud case, just confirmed in Edil Work, has interpreted free movement broadly and allowed companies to relocate registered offices to benefit from more favorable national laws, without moving economic activities. This approach raised doubts about the notion of establishment and complicated national authorities’ ability to prevent abusive moves aimed at circumventing stakeholders’ protective legislation. Directive 2019/2121 provides a procedural framework for such a control, but lacks a definition of abuse, leaving national courts with interpretative challenges.
This study explores what distinguishes legitimate establishment from its abuse and aims to create a unified model for its identification. At a general level, it expresses the long-standing clash between EU economic as opposed to social legal integration.