Case: Digital and simplified cross border branch registration – Sweden
Today, to setup a business in a neighbour country is a complicated and time-consuming operation. An important goal of the policy in the field of entrepreneurship is therefore to reduce the administrative burden of the operator when establishing a business in a neighbour country by providing simplified digital services across borders.
Sector: Establishment, entrepreneurship
Service provider: UNIT, Sweden
Contact persons: email@example.com +46 10 484 73 08 firstname.lastname@example.org +46 60 18 41 55
Since the Nordic/Baltic regional markets are a reality, the publicly driven digital infrastructure needs to develop to facilitate movement and entrepreneurship. There are many similarities between the countries that would enable a smoother administration:
- The Nordic/Baltic countries are among other things culturally close to each other regarding public administration.
- Public activities such as business registers and tax authorities are often similar in structure and governance. Interoperability is therefore often easier to carry out.
- The region is also generally aligned and developed when it comes to digitalization and digitization.
The benefits of an implemented digital and simplified cross-border branch registration are huge. The key success factor to make this happen is eIDAS and all the possibilities cross border communication and digitalisation will induce.
Benefits of eID and the digitalization of the branch setup process
The major benefits can be summarised as follows:
- Entrepreneurs spend less time and resources to report information to public authorities in foreign countries.
- Share and reuse information while supporting the Once only-principle on a European level.
- The establishment of the functionality to register a foreign branch will result in a more effective and secure process for registration.
- The quality of the business information will increase.
- The digitalization of the processes for cross border registration of business will probably increase the number of business that establish cross border.
- The new e-service will be a complement to other digital infrastructures as BRIS (Business Register Interconnection System) and SDGR (Single Digital Gateway Regulation).
- A digital exchange of information between Member States will eventually create conditions for harmonizing laws and practices for entrepreneur’s establishment across borders.
Nevertheless, to setup a business today in a neighbour country is a complicated and time-consuming operation, not only due to legal barriers across countries. Applications, permissions and registrations are mostly paperwork made by hand. Despite the heavy manual administration, surveys and statistics show a tentative ongoing business establishment over the borders.
It is usually very complicated to control manually submitted data. Today’s manual processes are therefore often misused for financial crime. Overall, within the EU, an estimated significant amount of money disappear in lost tax revenues, etc. because the business registration process is insufficiently transparent. A digitized process based on eIDAS and further digital data exchange has all the potential to prevent this kind of crime in the future.
Barriers and challenges
These barriers and challenges remain to be handled:
- Work on harmonization of national regulations is going too slow.
- The cooperation between authorities in different member states involved is not sufficiently coordinated. It is enough for early pilot stages but in the long run, it has to be improved.
- How can we ensure "End-to-End trust" if cross border e-services only affects the flow between countries?
- The implementation of eIDAS does not fully reach the purpose of the regulation. Issues such as language support, conversion of different unique person ID’s (record matching) and service levels (waiting room issue) needs to be solved.
- EU funding for pilot development in in certain areas is not sufficient to cover the costs of participating countries.
Simplified cross border branch registration step by step
The Swedish Companies Registration Office (Bolagsverket) is the Swedish official authority for the registration of both domestic and foreign companies (branches) within Sweden. The Business register holds data that must be filed by Swedish law, such as Company name and objective, members of the board, company statutes and annual reports. All data that is stored in the register is public. Bolagsverket also operates the platform for the Swedish point of single contact "verksamt.se".
The following scenario shows a future digital process for the registration of a branch to a foreign company. The cross border network of notified European eID schemes (eIDAS) is the single most important common component to enable this future digital process.
The actors involved in this use case are:
- A foreign entrepreneur as a user of the cross-border e-service.
- The Swedish point of single contact "verksamt.se" as the starting point for the future process of digital branch registration.
- The Swedish Companies Registration Office (Bolagsverket) as data consumer and as the managing organization of the Swedish Business Register
- Foreign Business Register as Data provider.
Scenario “Registration of branches to foreign company“
A foreign company wants to establish business in Sweden. The company chooses to register a branch to their company:
1. The user logs on to the Swedish business portal verksamt.se with a notified eIDAS eid.
2. The user chooses ID-provider.
3. The user chooses the eID country from a list of notified eID-schemes. In this case Norway.
4. The user chooses Norwegian eID MINID
5. The user enters his/her eID data (PIN, Password or similar according to the eID Scheme.
6. The user gives consent to use of eID attributes.
7. After the eIDAS eID is approved, the user is logged in, into verksamt.se. The user chooses "Registration of Branch."
8. The user uses an electronic form where he/she fills in the foreign company organizational number of the home business register.
9. Based on the organizational number the form will be pre-filled with data from the home register database. The information is collected directly from the foreign business register through a machine-to-machine interface.
10. The user then goes through the remaining steps in the registration (fills in some additional required information about the Branch).
11. The user signs (insures) and sends in the application using his/her notified eIDAS eID and receives an electronic receipt.
12. The application is reviewed and approved by the Swedish Companies Registration Office (Bolagsverket). A Certificate of Registration is sent to the foreign company (the user/applicant).