Services Directive

Services are one of the main drivers of the EU economy: they account for over two-thirds of EU GDP and employment and have been a major source of job-creation in recent years. Sectors covered by the Services Directive represent around 40% of EU GDP and employment.

Administrative simplification, dismantling of unnecessary red tape and the establishment of a European network of Points of Single Contact (PSCs) are key elements of the Services Directive, which is a crucial milestone in maximising the benefits of the Single Market for consumers and businesses. When fully implemented, the directive should have significantly positive effects, including:

  • Making the creation of companies less burdensome, saving time and money
  • Facilitating the cross-border provision of services
  • Giving consumers easier access to services.

Several economic studies point towards significant gains in terms of foreign direct investment, growth and job creation that can be expected, by all Member States, from the implementation of the directive.

The Services Directive was adopted by the European Parliament and the Council on 12 December 2006. It needed to be fully transposed by Member States into their national systems by 28 December 2009.

Benefits for businesses

The Directive requires the Member States to simplify procedures and formalities that service providers need to comply with. In particular, it requires Member States to remove unjustified and disproportionate burdens and to substantially facilitate:

  • the establishment of a business, i.e. cases in which a natural or legal person wants to set up a permanent establishment in a Member State, and
  • the cross-border provision of services, i.e. cases in which a business wants to supply services across borders in another Member State, without setting up an establishment there.

Pursuant to the Directive Member States are obliged to set up “points of single contact”, through which service providers can obtain all relevant information and deal with all administrative formalities without the need to contact several authorities. The “points of single contact” have to be accessible at a distance and by electronic means.

Benefits for customers

The Services Directive also strengthens the rights of recipients of services, which can be both consumers and businesses. For instance, it prohibits discriminatory conditions based on the nationality or residence of the service recipient, such as discriminatory tariffs. It also lays down a set of measures to promote a high quality of services and to enhance information and transparency relating to service providers and their services.

The Services Directive obliges the Member States to cooperate with each other in order to ensure efficient supervision of providers and their services.

Scope of the Services Directive

The Services Directive applies to the provision of a wide range of services – to private individuals and businesses – barring a few specific exceptions. For example, it covers:

  • distributive trades (including retail and wholesale of goods and services)
  • the activities of most regulated professions (such as legal and tax advisers, architects, engineers, accountants, surveyors)
  • construction services and crafts
  • business-related services (such as office maintenance, management consultancy, event organisation, debt recovery, advertising and recruitment services)
  • tourism services (e.g. travel agents)
  • leisure services (e.g. sports centres and amusement parks)
  • installation and maintenance of equipment
  • informationsociety services (e.g. publishing – print and web, news agencies, computer programming)
  • accommodation and food services (hotels, restaurants and caterers)
  • training and education services
  • rentals and leasing services (including car rental)
  • realestate services
  • householdsupport services (e.g. cleaning, gardening and private nannies).

The Services Directive does not apply to the following services, which are explicitly excluded:

  • financial services
  • electroniccommunications services with respect to matters covered by other community instruments
  • transport services falling into Title V of the EC Treaty
  • healthcare services provided by health professionals to patients to assess, maintain or restore their state of health where those activities are reserved to a regulated health profession
  • temporarywork agencies' services
  • privatesecurity services
  • audiovisual services
  • gambling
  • certain socialservices provided by the State, by providers mandated by the State or by charities recognised as such by the State
  • services provided by notaries and bailiffs (appointed by an official act of government).

In any event, national rules and regulations relating to these excluded services have to comply with other rules of Community law, in particular with the freedom of establishment and the freedom to provide services as guaranteed in the Treaty on the Functioning of the European Union.

More information on the Services Directive is available here: