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Directive on services in the Internal Market

The objective of the Services Directive is to release the untapped growth potential of services markets in Europe by removing legal and administrative barriers to trade in the services sector.

The simplification measures foreseen by the Directive should significantly facilitate life and increase transparency for SMEs and consumers when they want to provide or use services in the single market.

Benefits for businesses

The Directive requires the Member States to simplify procedures and formalities that service providers need to comply with. In particular, it requires Member States to remove unjustified and disproportionate burdens and to substantially facilitate:

  • the establishment of a business, i.e. cases in which a natural or legal person wants to set up a permanent establishment in a Member State, and
  • the cross-border provision of services, i.e. cases in which a business wants to supply services across borders in another Member State, without setting up an establishment there.

Pursuant to the Directive Member States are obliged to set up “points of single contact”, through which service providers can obtain all relevant information and deal with all administrative formalities without the need to contact several authorities. The “points of single contact” have to be accessible at a distance and by electronic means.

Benefits for customers

The Services Directive also strengthens the rights of recipients of services, which can be both consumers and businesses. For instance, it prohibits discriminatory conditions based on the nationality or residence of the service recipient, such as discriminatory tariffs. It also lays down a set of measures to promote a high quality of services and to enhance information and transparency relating to service providers and their services.

Finally, the Services Directive obliges the Member States to cooperate with each other in order to ensure efficient supervision of providers and their services.

When must the Services Directive be implemented?

The Services Directive was adopted by the European Parliament and the Council on 12 December 2006. It needed to be fully transposed by Member States into their national systems by 28 December 2009.