Promotion of the right of establishment in EU: focusing on the Imperative Requirement Doctrine

Consolidation of the “Common European Market” is a key feature of the European Union, which is made possible by the freedom in movement of goods, capital, services, and people. The freedom of movement for businesses manifests itself as the right of establishment. The aim of this paper is to examine various issues surrounding the right of establishment and to analyze the position of the European Court of Justice (ECJ) in each case. The analysis of cases illustrates a consistent opinion of the ECJ: The right of establishment is highly protected, but it must be exercised in the context of national legislation. Government regulation in market access, on the other hand, must meet the imperative requirement doctrine: it must be non-discriminatory, there must be general public interest at stake, the regulation must be an effective means of promoting public interest, and the regulation must be necessary and proportional to the general interest at stake. In sum, the ECJ upholds the right of establishment but nonetheless respects the states’ specific regulatory authority as long as they conform to the imperative requirement doctrine.