Free movement of services is one of the fundamental freedoms of the internal market, which comprises an area without internal frontiers, in which freedom is ensured in accordance with the provisions of the Treaty.
The freedom to provide services is regulated and guaranteed by Art. 56 to 62 of the Treaty on the Functioning of the EU. Freedom to provide services is closely linked to the freedom of establishment within the European Union, which is enshrined in the provisions of Art. 49-55 of the Treaty on the Functioning of the EU (TFEU).
Right of establishment
According to Art. 49 of the TFEU, restrictions on the freedom of establishment of citizens of a Member State within the territory of another Member State shall be prohibited. This prohibition shall also apply to restrictions on the setting up of commercial representations, branches or subsidiaries by citizens of any Member State established within the territory of another Member State.
Freedom of establishment shall include the right to take up and pursue activities as a self-employed person and to set up and manage enterprises under the same conditions imposed by the law of the country where such establishment is effected on its own citizens.
Free provision of services
Art. 56 of the TFEU prohibits restrictions on the freedom to provide services within the Union in respect of citizens of Member States who are established in a Member State other than that in which the person for whom the services are intended is.
Services are considered to be "services" within the meaning of the Treaties where they are normally provided against payment, insofar as they are not governed by the provisions relating to free movement of goods, capital and people.
In particular "services" include:
а) activities of an industrial nature;
б) activities of a commercial nature;
в) activities of craftsmen;
г) activities of freelancers.
Without prejudice to the provisions related to freedom of establishment, the person providing a service may, in order to do so, temporarily pursue their activity in the Member State where the service is provided, under the same conditions imposed by that State on its own citizens.
In 2006, Directive 2006/123/EC on services in the internal market was adopted, which elaborates these two fundamental freedoms.
Directive 2006/123/EC on services in the internal market
Directive 2006/123/EC on services in the internal market (the Services Directive) is an EU legal act, which is intended to remove all legal and administrative barriers to the activities of providing services, to create more transparent business environment and new business opportunities within the EU Single Market.
This Directive regulates the rules and general principles concerning the right of establishment for service providers and the free provision of services in accordance with the provisions of Art. 49 and Art. 56 of the Treaty on the Functioning of the EU.
The Services Directive covers a wide range of economic activities in the services sector and it applies to all services that are not specifically excluded from scope of the Directive.
The provisions of the Services Directive are transposed into Bulgarian legislation by adoption of the Service Activities Act, in force from 23.02.2010.
In accordance with the Treaty on the Functioning of the EU, the case law of the European Court of Justice, and Directive 2006/123/EC on services in the internal market, the Service Activities Act, establishes different rules for establishment cases and cases of temporary provision of services.
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