Right of Establishment

Article 34: Management of Removal of Restrictions on the Right of Establishment

In performing its tasks set out in Article 33, COTED shall, inter alia:

(a)        accord priority to the removal of restrictions on activities in respect of which the right of establishment encourages the development of:

(i)         the production of trade in goods;

(ii)        the provision of services,

which generate foreign exchange earnings;

(b)        require  the  Member  States  to  remove  administrative  practices  and procedures, the maintenance of which impede the exercise of the right of establishment;

(c)        require the Member States to remove all restrictions on the movement of managerial, technical and supervisory staff of economic enterprises and on establishing agencies, branches and subsidiaries of companies and other entities established in the Community;

(d)        establish measures to ensure the removal of restrictions on the right of establishment in respect of activities accorded priority treatment pursuant to paragraph (a) of this Article as they relate to:

(i)         the  establishment, in  the  territories  of  the  Member  States,  of agencies, branches or subsidiaries belonging to an economic enterprise; and

(ii)        the  conditions governing the  entry of  managerial, technical or supervisory personnel employed in such agencies, branches and subsidiaries, including the spouses and immediate dependent family members of such personnel;

(e)        take appropriate measures to ensure close collaboration among competent national authorities in order to improve their knowledge of the particular situation regarding the relevant activities within the Community;

(f)         require the Member States to ensure that nationals of one Member State may have access to land, buildings and other property situated in the territory of another Member State, other than for speculative purposes or for a purpose potentially destabilising to the economy, on a non-discriminatory basis, bearing in mind the importance of agriculture for many national economies;

(g)        ensure concordance in the Member States regarding the protection afforded the interests of partners, members and other persons with financial interests in companies and other entities.

Article 33: Removal of Restrictions on the Right of Establishment

  1. Subject to the provisions of Article 221 and Article 222, the Member States shall remove restrictions on the right of establishment of nationals of a Member State in the territory of another Member State.
  1. The removal of restrictions on the right of  establishment mentioned in paragraph

1 of this Article shall also apply to restrictions on the setting up of agencies, branches or subsidiaries by nationals of a Member State in the territory of another Member State.

  1. Subject to the approval of the Conference, COTED, in consultation with COHSOD and COFAP, shall, within one year from the entry into force of this Treaty, establish a programme providing for the removal of restrictions on the right of establishment of nationals of a Member State in the territory of another Member State. The programme shall, inter alia:

(a)        identify the activities in respect of which the right of establishment shall not apply;

(b)        establish the conditions under which the right of establishment is to be achieved; and

(c)        set out the conditions, stages and time-frames for the removal of restrictions on the right of establishment.

  1. The Community Council may authorise a Member State whose nationals have been aggrieved by the violation of obligations set out in this Article, Article 32, Article 36 and Article 37 to take such measures as may be provided for in this Treaty.

Article 32: Prohibition of New Restrictions on the Right of Establishment

  1.  The Member States shall not introduce in their territories any new restrictions relating to the right of establishment of nationals of other Member States save as otherwise provided in this Treaty.
  1. The Member States shall notify COTED of existing restrictions on the right of establishment in respect of nationals of other Member States.
  1. (1)  The right of establishment within the meaning of this Chapter shall include the right to:

(a)        engage  in  any  non-wage-earning  activities  of  a  commercial, industrial, agricultural, professional or artisanal nature;

(b)        create and manage economic enterprises referred to in paragraph

5(b) of this Article.

(2)        For the purposes of this Chapter “non-wage earning activities” means activities undertaken by self-employed persons.

  1. The Community Council may, with the approval of the Conference and upon the recommendation of COTED or COFAP, as the case may be, enlarge the body of rights provided in paragraph 3 of this Article.  The competent Organ shall establish basic criteria for Member States in order to safeguard against manipulation or abuse of such rights so as to gain an unfair advantage against other Member States, for example, in the areas of nationality criteria and in the operation of companies.
  1. For the purposes of this Chapter:

(a)        a person shall be regarded as a national of a Member State if such person – (i)            is a citizen of that State;

(ii)       has a connection with that State of a kind which entitles him to be regarded as belonging to or, if it be so expressed, as being a native or resident of the State for the purposes of the laws thereof relating to immigration; or

(iii)        is a company or other legal entity constituted in the Member State in conformity with the laws thereof and which that State regards as belonging to it, provided that such company or other legal entity has been formed for gainful purposes and has its registered office and central administration, and carries on substantial activity, within the Community and which is substantially owned and effectively controlled by persons mentioned in sub-paragraphs (i) and (ii) of this paragraph;

(b)        “economic enterprises” includes any type of organisation for the production of or trade in goods or the provision of services (other than a non-profit organisation) owned or controlled by any person or entity mentioned in sub- paragraph (a) of this paragraph;

(c)        a company or other legal entity is:

(i)         substantially owned if more than 50 per cent of the equity interest therein is beneficially owned by nationals mentioned in sub- paragraph (a) (i) or (ii) of this paragraph;

(ii)        effectively controlled if nationals mentioned in sub-paragraph (a) of this paragraph have the power to name a majority of its directors or otherwise legally to direct its actions.