The Brexit From A Corporate / M&A Perspective

Domicile Theory – Establishment Theory – Freedom of Establishment

Up until now

Foreign EU-companies from countries that follow establishment theories are recognized in Germany pursuant to freedom of establishment regulations (See AEUV Art. 49, AEUV 54).

This provides a particular to the English Limited corporate form, which is quite popular in Germany and is employed by German founders to incorporate primarily German undertakings and business concepts. The British also make use of the fact that their English Limited companies continue to be treated as British companies even when their actual seat and operational headquarters are physically located in Germany.

Scenarios

Depending on how the future relationship between the EU and UK develops, such companies might no longer be able to avail themselves of the advantages of freedom of establishment following the exit. In such instance, Germany would once again have the opportunity to claim domicile theory in