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Multinational enterprise groups in EuroGroups Register (EGR) - experimental statistics (egr)

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National Reference Metadata in Euro SDMX Metadata Structure (ESMS)

Compiling agency: Statistics Denmark

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The EuroGroups register (EGR) is the statistical business register of Eurostat and the EU Member States and European Free Trade Association (EFTA) countries for multinational enterprise groups. The purpose of the EGR is to offer to statistical users a tool for coordinating frame population, to derive consistent statistical output with an improved quality in measuring global activities of European enterprises part of multinational enterprise groups.

The EGR produces data in yearly cycles and covers microdata on the groups and their enterprises and legal units. The EGR aims to register all multinational enterprise groups that have enterprises in EU Member States or EFTA countries, including European and non-European groups.

The Member States, EFTA countries and Eurostat exchange data on multinational enterprise groups and on the units belonging to those groups for the purposes of the European framework for statistical business registers to ensure the quality of the multinational enterprise group’s information in the Union.

The EGR brings together microdata on multinational enterprise groups from the EU and the EFTA countries' national statistical institutes, in line with the requirements of the Regulation (EU) No 2152/2019, and from a commercial data source for data outside the EU and EFTA.

 

28 June 2024

Global group head

The global group head (GGH) of an enterprise group is the parent legal unit that is not controlled either directly or indirectly by any other legal unit. The subsidiary legal units of a subsidiary legal unit are considered to be subsidiaries of the parent legal unit.

Global decision centre

The global decision centre (GDC) of an enterprise group is the unit where the enterprise group level’s strategic decisions are taken. A group may have several decision centres or several units dedicated to a particular internal function for example accounting or human resources. However strategic decisions about the group is made only by the GDC. The GDC may be the GGH or another legal unit on a lower level than the GGH.

Ultimate Controlling Institutional unit

The ultimate controlling institutional unit (UCI) of a foreign affiliate means the institutional unit higher up a foreign affiliate’s chain of control that is not controlled by another institutional unit.

Activity of unit

The principal (or main) activity is the activity that contributes most to the total value added of a unit under consideration. Ideally the principal activity of the unit should be determined with reference to the value added to the goods and services produced by applying the top-down method. The top-down method follows a hierarchical principle: the classification of the unit at the lowest level of the classification must be consistent with the classification of the unit at higher levels. The principal activity so identified does not necessarily account for 50 % or more of the unit’s total value added.

In the European Union the classification of principal activity is determined by reference to NACE Rev. 2, first at the highest level of classification and then at more detailed levels (top-down method).

Number of employees

The number of employees represents the average number of persons who were, at some time during the reference period, employees of the statistical unit.

Number of employees and self -employed persons

The number of employees and self-employed persons is the sum of the Number of employees and Number of self- employed persons. The number of self-employed persons is the average number of persons who were at some time during the reference period the sole owners or joint owners of the statistical unit in which they work. Family workers and outworkers whose income is a function of the value of the outputs of the statistical unit are also included.

Net turnover

For all activities except for NACE 64, 65 and some activities of NACE 66 net turnover consists of all income arising during the reference period in the course of ordinary activities of the statistical unit, and is presented net of all price reductions, discounts and rebates granted by it. Income is defined as increases in economic benefits during the reference period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity other than those relating to contributions from equity participants. The inflows referred to are arising from contracts with customers and are realized through the satisfaction by the statistical unit of performance obligations as foreseen in said contracts. Usually, a performance obligation is represented by the sale (transfer) of goods or the rendering of services, however, the gross inflows can also contain revenues obtained as a yield on the use by others of the statistical unit’s assets. Excluded from net turnover are: — all taxes, duties or levies linked directly to revenue; — any amounts collected on behalf of any principal, if the statistical unit is acting as an agent in its relationship with said principal; — all income not arising in the course of ordinary activities of the statistical unit. Usually, these types of income are classified as ‘Other (operating) income’, ‘Financial income’, ‘Extra-ordinary income’ or under a similar heading, depending on the respective set of generally accepted accounting standards used to prepare the financial statements. Infra-annual statistics may not be able to take into account aspects such as annual price reductions, subsidies, rebates and discounts. For the activities of NACE K6411, K6419 and K649 net turnover is defined as the value of output minus subsidies or government grants. For the activities of NACE K642 and K643 net turnover can be approximated by the total operating costs, if net turnover is not available in the financial statements. For the activities of NACE K6511, K6512 and K652 net turnover is defined as Gross premiums earned. For the activities of NACE K653 the net turnover is defined as total pension contributions For activities of NACE K66 for which net turnover is not available in the financial statements, net turnover is defined as the value of output minus subsidies or government grants. For activities of NACE K66 for which net turnover is available in the financial statements, the standard definition of net turnover applies.

Total assets

Total assets for the entire Group.

Principal activity

The principal (or main) activity is the activity that contributes most to the total value added of a unit under consideration. Ideally, the principal activity of the unit should be determined with reference to the value added to the goods and services produced, by applying the top-down method. The top-down method follows a hierarchical principle: the classification of the unit at the lowest level of the classification must be consistent with the classification of the unit at higher levels. The principal activity so identified does not necessarily account for 50 % or more of the unit’s total value added. In the European Union the classification of principal activity is determined by reference to NACE Rev. 2, first at the highest level of classification and then at more detailed levels (top-down method).

The statistical units maintained in the EGR are defined in accordance with the Regulation (EEC) No 696/93 on the statistical units for the observation and analysis of the production system in the Community.

The EGR frame contains the following units: Legal units, Enterprises and Multinational enterprise groups.

Legal units include:

  • legal persons whose existence is recognized by law independently of the individuals or institutions which may own them or are members of them,
  • natural persons who are engaged in an economic activity in their own right.

The legal unit always forms either by itself or sometimes in combination with other legal units the legal basis for the statistical unit known as the 'enterprise'.

Enterprise

The enterprise is the smallest combination of legal units that is an organizational unit producing goods or services which benefits from a certain degree of autonomy in decision-making, especially for the allocation of its current resources. An enterprise carries out one or more activities at one or more locations. An enterprise may be a sole legal unit.

Multinational enterprise group

A multinational enterprise group is an enterprise group that has at least two enterprises or legal units located in different countries.  In business statistics also term ‘global enterprise group’ is used.

The data transmitted to the EGR during the cycle is made of the following datasets.

The data set with information on all incorporated resident legal units for the EGR Identification Service.

ISRLE file includes data sets consisting of a full population of resident legal units which means all incorporated resident legal units, belonging to all-resident enterprise groups, and also legal units that are not belonging to any enterprise group are part of the data transmitted. The population of resident legal units is sent to EGR for identification.

The data set with information on foreign legal units for the EGR Identification Service.

ISNORLE file including an identification of foreign units is prepared in a list of foreign legal units subject for identification, and only knowledge of basic data of the foreign legal units are send, and also basic data of the foreign legal unit where LEIDs are not found are send as well. The population of foreign legal unit recorded in national statistical business register is sent to EGR for identification.

The data set with information on legal units.

LEU file including all resident legal units belonging to foreign multinational group and resident legal units belonging to multinational groups with GGH in the country. The resident legal unit belonging to a global enterprise group is sent to EGR for processing.

The data set with information on relationships of ownership and control.

REL file including relationships between two resident legal units, and relationships between one resident and one foreign legal unit, and relationships between two foreign legal units from non EU+EFTA countries. Relationships between legal units is sent to EGR for processing:

  • two resident legal units
  • one resident and one foreign legal unit
  • two foreign legal units from non EU+EFTA countries.

Relationships in the REL are:

  • control relationships (>50%)
  • minority relationships (<50%)

The data set with information on enterprises.

ENT file including the characteristics of the. enterprises made of legal unit sent in LEU files is sent to EGR for processing.

The Data set with information on links between enterprises and legal units.

LEL file including one-to-one, one-to-many or many-to-one. links between enterprise (ENT) and legal units (LEU) is sent to EGR for processing. 

The Data set with information on enterprise groups of which country is the GDC country for the EuroGroups Register.

GEG file including group name, group 3-digit NACE code, group total employment, group net turnover, total assets, web address and short description of the group and where the. groups data is sent to the EGR for processing.

The groups’ variables are updated after receiving the preliminary frame:

  • GEG_EGR_ID

ISLRLE: Includes only national data in DK.

NORLE: Includes units that are cross border and with GDC in DK.

The reference period for data sent to the EGR reflects the picture of 31 December of the given reference year.

Data transmitted to EGR during the EGR 2023 cycle includes data for the 2023 reference year. The identification, economic variables (number of employees, turnover and economic activity) refer to the 2023 reference year.

The actions taken to monitor and to improve accuracy of the data sent to EGR are the following: 

  • Data send is validated and reviewed by our SBR
  • Find the exact numbers and existing LEUs for Groups from the annual report used in profiling (IPT)

Units

Assessment

Legal units

Very good

Relationships between legal units

Good

Enterprises characteristics

Very good

Enterprises perimeters

Very good

Multinational enterprise group (with Global decision centre in my country)

Very good

This accuracy assessment is based on:

  • DS has a very good and integrated system that is fully automated when it comes to register data - all reason is mentioned below
  • Comprehensive use of administrative registers - consistent and detailed
  • Legal and institutional framework
  • Commitment to transparency

The main issues regarding accuracy of the data and issue importance are as follows:

Units

Issue

Assessment

Legal units

Errors from CDP or misinformation

No huge impact

Relationships between legal units

Errors from CDP or misinformation and wrongly linked units

No huge impact

Enterprises characteristics

Errors from CDP or misinformation

No huge impact

Enterprise perimeter

Errors from CDP or misinformraiton

No huge impact

Multinational enterprise group (with Global decision centre in my country)

Errors from CDP or maybe other misinterpretation​

No huge impeact

 

The actions taken to reduce bias (if any) and to improve accuracy of the data are as follows:

  • Validation and cross-checking
  • Standardization.

The economic variables on employment are recorded in absolute figures.

The net turnover for enterprises is recorded in DKK currency.

The net turnover and net total asset is recorded in millions in DKK currency.

The procedures used to combine data from different sources:

  • We have only one basic source, except for enterprice groups. (the basic source is CVR which combined different administrativ sources.)

The  frame populations and annual copy of national statistical business register are produced as follows:

  • We create frozen frames of SBR quarterly and yearly versions. It is both preliminary and Final Frame.

The national statistical business registers is set up in accordance with EBS Regulation (EU) 2019/2152 using any relevant data sources while avoiding excessive burden on respondents and taking due account of the cost effectiveness of the NSAs.

NSI uses the following data sources, including a combination thereof for the national statistical business register:

  • National registers (CVR) basted on information from tax and Danish Buisness Authority.
  • Supported by information from statistical surveys, not direct releated to SBR.

Not applicable.

The EGR process refers to a reference year T, and is executed yearly over a period of 11 months, between May T+1 and March T+2.

The geographical comparability of national statistical business registers is ensured by the application of common definitions of the statistical units laid down in the Council Regulation (EEC) No 696/93.

The SBR variables are harmonised and set up in accordance with the Annex VIII to the Commission Implementing Regulation (EU) 2020/1197 laying down technical specifications and arrangements pursuant to Regulation (EU) 2019/2152 on European business statistics. Further guidelines on the variables implementation in the national statistical business registers are given in the EBS methodological manual for Statistical Business Registers (2021 edition).

No quality issues. We use the public Danish Address Register DAR for codings of addresses.

The comparability over time is done through the frames results.