NEWS     27.08.2025

EU company law is going digital – Directive (EU) 2025/25

 

European company law has already made significant progress towards digitalization. Directive (EU) 2017/1132, later amended by Directive (EU) 2019/1151, enabled online company formation and limited cross-border information sharing. However, the reality in individual EU Member States varies. Some EU countries adopted online procedures quickly, while others stuck to paper documentation, formalities requiring personal visits, and lengthy administrative inspections. As a result, businesses in the EU deal with different legal systems, which often cause delays, extra costs, and inconsistent procedures when setting up companies, registering branches abroad or conducting other cross-border activities.

The new Directive (EU) 2025/25 (the “Directive”) is meant to change that. The EU intends for its internal market to reflect how businesses actually operate today – across borders, online, and at a speed that matches reality. Investors and business partners expect real-time access to reliable corporate information without unnecessary bureaucratic hurdles. The Directive responds to these expectations by improving transparency, introducing harmonised digital tools, and simplifying corporate procedures.

To achieve these objectives, the Directive updates existing legislation. It updates both Directive 2009/102/EC, which originally simplified rules for single-member companies, and Directive (EU) 2017/1132, which focused on broader company law procedures.

One of its key innovations is the EU Company Certificate – a standardised electronic document that proves a company’s legal status and must be accepted across all EU Member States.

Directive 2025/25 also introduces the EU Power of Attorney, a digital tool that enables companies to appoint a representative for specific cross-border activities without requiring notarisation, apostilles, or translations. This digital power of attorney must, however, be verified by competent authorities such as courts or notaries, and authenticated using trusted eIDAS services.

The reforms go even further: companies can now be incorporated and branches registered entirely online, with authorities required to complete the process within ten business days once all necessary documents and fees are submitted. To ensure proper verification of applicants, identity checks are carried out using audiovisual methods and trusted electronic identification systems.

Directive 2025/25 also strengthens the connection of corporate registers across the EU. Under the “once-only” principle, information that a company has already submitted to a commercial register in one Member State should not need to be submitted again in another, reducing administrative burdens and duplicates. To support this principle, the reform links the Business Registers Interconnection System (BRIS) with the registers of beneficial ownership (BORIS) and insolvency (IRI), creating a more comprehensive and integrated source of corporate information. Partnerships, including general and limited partnerships, are now included in the system: they will receive a European Unique Identifier, also known as the EUID, and be required to disclose additional information publicly through the BRIS.

The Directive also introduces a range of additional measures to improve the reliability of corporate information. It sets stricter deadlines for submitting updates to commercial registers, increases oversight by notaries and registrars, and establishes clear penalties for non-compliance, all aimed at ensuring the full availability and accuracy of corporate data.

Overall, Directive 2025/25 represents a major step toward a fully digital and harmonized European company law framework. By standardizing electronic documentation, improving identity verification, and connecting registers across Member States, it reduces administrative burdens, improves transparency, and facilitates cross-border business operations. The introduction of the EU Company Certificate, Digital Power of Attorney, and the once-only principle ensures faster, more reliable, and cost-efficient processes for companies, fostering a more integrated and competitive internal market.

As a directive, Directive 2025/25 requires implementation by each EU Member State. They are obliged to adopt and publish the necessary national legal, executive, and administrative regulations by 31 July 2027 and to apply these provisions from 31 July 2028.

 

Grzegorz Kłodkowski