With the implementation of the new Directive (EU) 2025/25 a digital corporate transition will take place across the European Union by July 31st, 2027.
Up to now, many procedures are overly bureaucratic and national differences in regulations make it difficult for companies to operate freely in the unified market. With the entry into force of the Directive, some processes will be simplified, while ensuring legal certainty.
The current situation: different bureaucracy, delays and procedures from State to State
Nowadays, the entrepreneur who wants to open a company in an EU Member State, must face several bureaucratic obstacles that differ from country to country.
Setting up a company, for example, often requires the physical presence of the founders at administrative offices, public notary’s offices or chambers of commerce. Even just forming a company branch in another Member State can turn into a lengthy and costly process, with the need to provide authenticated, translated and sometimes apostilled documents.
Collecting information on companies across borders is also not easy. Although the Business Registers Interconnection System (BRIS) exists, much information remains fragmented and not always reliable. This creates problems not only for entrepreneurs who want to expand their business, but also for investors and authorities who need up-to-date and reliable data.
Another major obstacle concerns transactions between entities placed in different Member States.
Companies are required to repeatedly submit the same sets of documents to different administrations, increasing costs and time. Moreover, for those wishing to operate across borders, the procedures of legalisation, sworn translation and obtaining apostilles are a significant burden and time-consuming.
Lastly, the lack of harmonised rules on the verification of corporate information creates disparities and potential risks of fraud. Currently each Member State decides independently how to verify the identity of the founders and directors of a company, with the risk that some jurisdictions are more vulnerable to abuse and white-collar crimes.
What will change with the new Directive?
With the new legislation, European corporate law is finally aligned with the objectives of digitisation and administrative simplification: costs for companies are reduced, transparency increases and controls become more effective.
Company formation and registration: all the process is online
👉 Now: in many States the physical presence of the founders is required, with long and different processing times.
✅ Next: companies will be able to be formed, registered and managed entirely online in all Member States (recital 2).
Thanks to digitisation, registration will be faster and will be possible without the need to go to a public notary or to public offices, except where national law requires specific checks. All documents will be digitally submitted and verified, drastically reducing time and costs.
EU Company Certificate: a single document to operate throughout the Union
👉 Now: proving the existence of a company in another Member State requires chamber of commerce searches, notarised and apostilled translations.
✅ Next: with the EU Company Certificate, companies will be able to validly prove their legal existence with a single electronic document valid throughout the Union (recital 24).
This company certificate, available in all official EU languages, will eliminate the need for legalisation and sworn translation of company documents, making it easier to open branches and participate in cross-border transactions.
End of costly formalities between Member States
👉 Now: every time a company operates in another Member State, it must resubmit the same documents, with expensive authentication procedures.
✅ Next: thanks to the “once-only” principle, information already available in a business register can be reused without the need for resubmission (recital 12).
Furthermore, the digital EU power of attorney, introduced by the Directive, will enable companies to delegate legal representatives to operate in several Member States without the need for notarisation or apostille (recital 27).
More transparency and stronger controls
👉 Now: each Member State has different rules on checks of company information, with risks of fraud and false registrations.
✅ Next: harmonised and mandatory checks will be introduced to ensure the reliability of the data contained in business registers (recital 6).
Enhanced cooperation between the Business Register Interconnection System (BRIS), the Beneficial Owners Interconnection System (BORIS) and the Insolvency Register Interconnection System (IRI) will thus enable more effective cross-checks in the fight against money laundering and tax evasion (recital 10).
Innovations for partnerships
An innovative aspect of the Directive concerns partnerships, which until now have been subject to less stringent transparency rules than corporations.
With the new Directive:
- all Member States will have to publish the same basic information on partnerships, including the names of liable partners (recital 15).
- information on partnerships will be accessible through the BRIS system, as is already the case for limited liability companies.
- partnerships will receive a European Unique Identifier (EUID) that will allow them to be easily traced in public registers.
Personal data protection
The gathering and publication of more corporate information means that the protection of personal data also takes on a central role in the digitalisation process.
Member States and the Commission will have to ensure that the processing of personal data is carried out in compliance with the EU Data Protection Regulation, limiting access and use to strictly necessary purposes (recital 38).
Final remarks
Directive (EU) 2025/25 is a decisive step towards a more modern and accessible single market. Thanks to digitalisation, new transparency measures and strengthened checks, businesses will be able to operate more easily without additional bureaucratic barriers.
At the same time, the focus on data security and privacy protection will ensure that the new system is not only more efficient, but also safer for all players in the market.
Our law firm’s professionals are ready to assist companies step by step in the digitalisation and innovation process that the entry into force of Directive (EU) 2025/25 will entail.