Euro-companies are born.

A new entity – the European Company – authorised to operate throughout the 15 EU countries under a single set of management, reporting and accounting rules, formally came into existence this week.

The new European Company is to be known by its Latin name of Societas Europaea – the letters SE will follow its name in general usage.

It will benefit organisations operating in more than one EU country by allowing them to incorporate under a single legal umbrella, thus doing away with the time-consuming and expensive requirement of adhering to 15 different national systems.

Anna Diamantopoulou, European commissioner for employment, said the statute was not perfect and that ‘much work remains to be done on taxation matters’.

But in the commission’s view, adoption of the measure would help make the EU ‘the world’s most competitive and cohesive place to do business’.

Commission officials said a european company could gain fiscal advantages if it was created by merging a company registered in one country but operating through branches in others. In such cases it would be possible to offset losses from some permanent establishments against profits from others.

Another major advantage is that SEs will be able to move their registered offices from one country to another without having to wind up their affairs formally and then re-register. The statute is set to come into effect in 2004.