Edited by Torino Social Impact

Policy & Practice

The international debate and best practices from around the world

13 September 2023

European Commission adopted a Proposal for non-profit associations

The European Commission adopted a Proposal for a Directive on European cross-border associations on 5 September 2023.

The aim of this Directive is to remove legal and administrative barriers for non-profit associations that operate or wish to operate in more than 1 EU country. It also intends to facilitate the recognition of their legal status across the EU. This is by introducing the additional legal form of a European cross-border association (ECBA) in national legal systems, which is specifically designed for cross-border purposes.
Non-profit associations represent the predominant legal form among non-profit organisations in the European Union, with an estimated number of 3.8 million present in EU Member States. Non-profit associations are also the largest in number of the four legal forms traditionally encompassed by the social economy. Among them, 310 000 non-profit associations are active in more than one Member States, while potentially another 185 000 could theoretically engage in cross-border activities, if barriers were removed. Non-profit associations are organisations driven by the key principles of the social economy: the primacy of people as well as social and environmental purpose over profit, the reinvestment of most of the profits and surpluses to carry out activities related to their purpose.

Non-profit associations are active in sectors with a societal impact such as healthcare, social services, social inclusion, culture, sports, research and development, education and training, contributing 2.9% to EU GDP. Through their membership-based structure, they also have a direct leverage effect on citizens who are members, donors or beneficiaries of their activities. When provided against remuneration, non-profit associations’ activities constitute a service within the meaning of Article 57 TFEU.

Non-profit associations have a positive impact on ensuring social fairness and prosperity for EU citizens and they play a significant role for growth within the internal market. However, their socio-economic potential is not fully exploited. The full potential of the internal market can only be unleashed if all participants enjoy the rights provided thereby. To this end, non-profit associations need a predictable legal framework that allows them to seamlessly conduct their activities, including when conducting them across borders in the internal market.

By removing these legal and administrative barriers for cross-border non-profits will make it easier for them to engage in activities across EU countries. It will enable them to unleash their full potential to generate economic and societal value in the EU as a whole.

The Commission also adopted a technical Regulation, C(2003)515, amending the Internal Market Information System (IMI) and the Single Digital Gateway (SDG) Regulations. This will allow for cooperation and the exchange of information among the competent authorities, as well as access to the information about ECBAs available online.

More complete information can be found by clicking on:

What are the associations
Regulation of the European Parliament and of the Council
Facilitating cross-border activities of non-profit associations