Freedom of Establishment and Freedom to Provide Services in the European Union

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The Freedom to Provide Services or sometimes referred to as free movement of services along with the Freedom of Establishment form the core of the European Union's functioning. With the free movement of workers, citizens, goods and capital, they constitute fundamental rights that give companies and citizens the right to provide services without restrictions in any member country of the EU regardless of nationality and jurisdiction.^[1]

After WWII the creation of the European project led to the opening of borders, especially for citizens since these control were almost absent before 1914.^[2] The Treaties of Rome laid down the foundations of the so-called "four freedoms in the EU. Initially they were basic for workers, for the free provision of services and the free movement of goods, later on capital movement was included.

The right to provide services has proven to be increasingly important as the European economy shifts towards a more service-based economy. Today, it is estimated that the services sector represents about two-thirds of the European economy and it is responsible for 90% of the overall creation of jobs in the EU.^[3] Adding to that, the shift to a digital economy means that many things that used to be goods now become services.^[4] The Commission is well aware of that and in 2015 launched a proposal for a so-called "Digital Single Market" with the aim of bringing down barriers to unlock digital opportunities.^[5]