Quick guide

The Service Directive (Directive 2006/123/EC of 12 December 2006 on services in the internal market) needed to be fully implemented by the Member States by 28 December 2009.

What is the scope of the Services Directive? How does the Services Directive help businesses set up? How does the Services Directive facilitate the cross-border provision of services? How does the Services Directive enhance the rights of service recipients? What kind of administrative cooperation does the Services Directive call for and why?

What is the scope of the Services Directive?

The Services Directive applies to the provision of a wide range of services – to private individuals and businesses – barring a few specific exceptions. For example, it covers:

• distributive trades (including retail and wholesale of goods and services)
• the activities of most regulated professions (such as legal and tax advisers, architects, engineers, accountants, surveyors)
• construction services and crafts
• business-related services (such as office maintenance, management consultancy, event organisation, debt recovery, advertising and recruitment services)
• tourism services (e.g. travel agents)
• leisure services (e.g. sports centres and amusement parks)
• installation and maintenance of equipment
• information society services (e.g. publishing – print and web, news agencies, computer programming)
• accommodation and food services (hotels, restaurants and caterers)
• training and education services
• rentals and leasing services (including car rental)
• real estate services
• household support services (e.g. cleaning, gardening and private nannies).

The Services Directive does not apply to the following services, which are explicitly excluded:

• financial services
• electronic communications services with respect to matters covered by other community instruments
• transport services falling into Title V of the EC Treaty
• healthcare services provided by health professionals to patients to assess, maintain or restore their state of health where those activities are reserved to a regulated health profession
• temporary work agencies' services
• private security services
• audiovisual services
• gambling
• certain social services provided by the State, by providers mandated by the State or by charities recognised as such by the State
• services provided by notaries and bailiffs (appointed by an official act of government).

In any event, national rules and regulations relating to these excluded services have to comply with other rules of Community law, in particular with the freedom of establishment and the freedom to provide services as guaranteed in the Treaty on the Functioning of the European Union.

How does the Services Directive help businesses set up?

The Services Directive facilitates the establishment of a business in a Member State. This concerns cases in which a legal or a natural person intends to establish in another country. But it also benefits to providers who want to establish in their own Member State, as they will take advantage of simplified rules and procedures. Under a general obligation for Member States to simplify procedures and formalities some very specific obligations are established by the Directive:

• it requires Member States to set up "points of single contact", i.e. one-stop shops through which service providers can obtain all relevant information and complete all procedures relating to their activities.
• it requires Member States to ensure that all these procedures and formalities can be completed at a distance and by electronic means.
• it obliges Member States to review and evaluate all their authorisation schemes concerning access to a service activity or the exercise thereof and abolish them or replace them by less restrictive means (such as simple declarations), where they are unnecessary or otherwise disproportionate. Remaining schemes are to be rendered clearer and more transparent (e.g. conditions have to be made public in advance; criteria have to be clear and non-discriminatory). Furthermore, authorisations have in principle to be granted for an indefinite period and be valid throughout the national territory.
• it requires Member States to abolish discriminatory requirements, such as nationality or residence requirements, and particularly restrictive requirements, such as “economic needs” tests (requiring businesses to prove to the authorities that there is a demand for their services). It also requires the review of other burdensome requirements which may not always be justified (such as territorial restrictions or minimum number of employees).

How does the Services Directive facilitate the cross-border provision of services?

The Services Directive aims at improving the regulatory environment for service providers who want to supply their services across borders to other Member States, without setting up an establishment there. In this respect, the Services Directive lays down the “freedom to provide services” clause whereby Member States should, in principle, not impose their national requirements on incoming service providers. Member States are thus generally prohibited from imposing restrictions upon incoming service providers. However, certain requirements can still be imposed under very limited circumstances, i.e. when they are non-discriminatory, justified for reasons of public policy, public security, public health or the protection of the environment and do not go beyond what is necessary in order to achieve their objective.

Furthermore, the "freedom to provide services" clause is also assorted with a number of general derogations. These include, among other, matters covered by Directive 96/71/EC on posting of workers and matters covered by Title II of Directive 2005/36/EC on the recognition of professional qualifications.

For those requirements that Member States are still allowed to impose on incoming service providers, service providers will have to be able to obtain all relevant information and complete all procedures and formalities through the "points of single contact", at a distance and by electronic means.

How does the Services Directive enhance the rights of service recipients?

The concept of "recipient" does not only cover consumers but also businesses who want to use services in the course of their activities. To enhance the rights of recipients and strengthen their confidence in the internal market, the Services Directive requires Member States to:

• remove obstacles for recipients wanting to use services supplied by providers established in other Member States, such as obligations to obtain an authorisation.
• abolish discriminatory requirements based on the recipient’s nationality or place of residence. This obligation of non-discrimination has to be complied with by the Member States' public administrations (i.e. the State or regional or local authorities) and by service providers in their general conditions of access to a service from another Member State.
• make available to recipients general information and assistance on the legal requirements, in particular consumer protection rules, and on redress procedures applicable in other Member States.

List of bodies designated by the Member States to provide information and assistance to service recipients seeking to receive services from providers in other Member States ("List of Article 21 bodies").

What kind of administrative cooperation does the Services Directive call for and why?

The Services Directive obliges Member States to cooperate with each other and give mutual assistance in the supervision of service providers. This will ensure effective supervision of service providers while at the same time providing that such supervision does not lead to additional and unjustified obstacles for service providers.

Competent authorities of different Member States have to exchange information with each other and carry out checks, inspections and investigations upon request. They also have to send an alert to other Member States in cases relating to a service activity that could cause serious damage to the health or safety of persons or to the environment. For this purpose the Commission in cooperation with Member States established an electronic system for the exchange of information (IMI).