Doing Business AbRoad Pilot
About The Pilot
For EU businesses, the procedure to start a new business activity in another European Member State can be cumbersome. Company-representatives often get confused and struggle to understand the rules that apply to their case. Proving that they are entitled to act on behalf of the company is a major challenge and they find it hard to carry out the steps that are needed to fulfil online procedures. The entire process is very time-consuming, error-prone and tiresome. And sometimes, procedures are still paper-based, which even requires physical sending of documents and visiting offices.
For the public authority in the other Member State the struggle is often not less: the data received is hard to interpret, incomplete, does not match the local standards and is of uncertain quality. Reliability of the information is always an issue, perhaps most in the field of validating the powers of the representatives that sends the documents and data.
Doing Business Abroad pilot
Within the Digital Europe for All (DE4A) project, the Doing Business Abroad (DBA) pilot demonstrated a dramatic reduction of this administrative burden for both companies and public authorities, using the Once Only Technical System. The system finds its legal foundation in the Single Digital Gateway regulation (SDGR), which will be fully introduced by the end of 2023 and aims to lower barriers for businesses and civilians when being active in another Member State. With this, a genuine single market where the freedom of goods, services, capital, and people will be fully ensured.
DBA introduced several huge improvements over the traditional processes, among which the application of online validation of the powers of the company-representatives. Compared to the traditional process where public authorities have to judge (paper-based) evidences and struggle with differences in legal bases, the public authorities can now fully rely on powers validation performed by the Member State where the company resides, in the proper legal context. The online nature makes powers validation fast and reliable, and is performed every single time a company-representatives interacts with the public authority in another Member State.
Another improvement is the reuse of formal evidence registered in an authentic source for business information, so public authorities in other Member States can rely on the information being correct, which saves time and effort on checking validity and on processing.
And last but not least, in DBA public authorities can subscribe to a service to receive online notifications when something changes in or around the company. With this, public authorities can evaluate the service delivery to companies instantly and adjust when necessary. For example when a company goes bankrupt, subsidies can be stopped. In traditional processes, public authorities often receive such notifications very late, if they receive them at all.
The result of the pilot?
During piloting company-representatives manage to complete the procedure online in another Member State in 2 minutes, including cross-border validation of mandates using their own national eID. The public authorities in the other Member States received information via the Once Only Technical System in a way that is easy to process, reliable, of high quality and can be kept up to date if something changes in/around the company. A hugh benefit for both companies and public authorities!
Some of the situations we encountered during piloting were exemplary for the effects the SDGR intends to achieve:
A Romanian entrepreneur selling trainings to companies in other Member States is very familiar with traditional procedures for registering business activities and other procedures with foreign public authorities. During the pilot, the entrepreneur completed the online procedure within minutes (including authentication, checking the mandates and filling in the forms). The entrepreneur could not believe the simplicity and short duration of the entire procedure and expressed his hope that this solution would soon be available across Europe.
A Dutch entrepreneur registering a new business activity in Germany was surprised after having completed the online procedure. “What can you possibly learn in this pilot, from something so simple and quick?” she wondered. This is perhaps the best conformation the SDGR could ever have, as it proves clearly that the ambition to ‘lower barriers’ had been achieved.
See our DBA explainer video:
Scope of the pilot
The Doing Business Abroad pilot ran during 2022 and supported procedures for companies that wanted to start a new business activity in another Member State. Furthermore, the project provided a mechanism for keeping the public authority informed on any relevant changes in the company.
The objective of the pilot was to study the impact of implementation of the solution, and also study the benefits that companies and public authorities truly experienced. The pilot also collected valuable insights regarding a possible of extension of the SDGR with the mechanism to keep public authorities informed about business events happening.
Public Authorities and business registers in Austria, Romania, Germany, Sweden and The Netherlands implemented and piloted cross-border validation of powers and the integration to the Once Only Technical System. The pilot provides useful lessons learned for a large implementation experience of the SDGR.
The main lessons learned are (in random order):
Implementation of the OOTS and integrating to the DE4A OOTS are feasible.
The expected advantages (simplicity, speed, quality) for both companies and public authorities have been confirmed.
The advantages of using online powers validation, authentic data and receiving notifications, are recognized by the public authorities.
Implementation speed seems to increase over time, meaning that the first implementations will take longer than later implementations. The most recent technical implementation for the pilot was established within 6 months.
Several prerequisites must be in place to create the optimal experience and achieve the most benefits:
Availability of (company) eIDs and mandate management.
Integration of as many online procedures as possible (both per public authority as on a Member State level), starting with procedures that are frequently used by foreign companies.
Integration of many authentic sources with the OOTS is needed, to increase benefits for public authorities and companies in other Member States. Applying this approach across Europe quickly increases to potential of the OOTS and SDGR.
The main lessons learned regarding implementing the SDGR are:
Legal and technical expertise on both eID, eIDAS and the OOTS should be secured to smoothen implementation. Consider to establish a center of expertise on a national level to support public authorities.
Proper maintenance procedures and organization should be established to maintain and support the OOTS infrastructure.
Additional and more detailed lessons learned will be available in the formal pilot deliverables.
During the pilot, several videos have been created to demonstrate the functionality used for completing the online procedures when the SDGR is applied: