Exporting Services to the EU – A guide for Canadian business
The European Union (EU) is the second-largest market in the world, with more than 445 million consumers and 27 interdependent national economies sharing common rules and legislation. It is also Canada’s second-largest trading partner in terms of services, right after the United States.
The Comprehensive Economic and Trade Agreement (CETA) has opened up the EU market to Canadian businesses more than to any other country in the world, with approximately 98% of trade tariffs removed. To a large extent, Canadian exporters now stand on a quasi-equal footing with European local businesses, subject to some sectorial regulatory exceptions.
Half of the EU’s additional economic growth generated by CETA is expected to come from the services sector. Canada and the EU are two developed and complementary economies, with major trade flows in intellectual and high added-value services, management and business services, digital and technical services, commercial services, the financial sector, maintenance and repair services, and many others.
Table of contents
- This guide will help you to
- Get help from the Trade Commissioner Service
- Chapter 1: Introduction to the EU and EU services markets
- Chapter 2: Exporting Services to the EU
- Chapter 3: Commercial Rules
- Chapter 4: Digital Services
- Chapter 5: Financial Services
- Chapter 6: Regulated Professions and Qualifications
- Chapter 7: Intellectual Property
- Chapter 8: Government Procurement
- Chapter 9: Business travel
- Chapter 10: Glossary of terms
- Comprehensive Economic and Trade Agreement
- Council of the European Union
- The European Patent Office
- European Council
- European Central Bank
- European Commission
- European Court of Justice
- European Economic Area
- European Parliament
- European Union Intellectual Property Office
- Member state
- Single Market
- Annex: Country business profiles
This guide will help you to
- Develop a practical and concrete road map for exporting services to the EU
- Identify your main regulatory obligations
- Find key business opportunities
In particular, it answers the following questions:
- How can I benefit from the CETA in practice?
- Is my sector open to foreign services suppliers in the EU?
- What are my rights and obligations when trading with European consumers and businesses?
- Am I bound by EU law even if I am not based in Europe?
- How much of the services market is regulated at the EU level versus the national level?
- Are my accreditations recognized in Europe?
- Do I need professional licensing to perform my services in Europe?
- How can I get access to government procurement markets?
Please note that this guide focuses essentially on trade in services. If you wish to export goods to the EU, please refer to Exporting to the EU – A guide for Canadian business.
Get help from the Trade Commissioner Service
The guide covers legislation harmonized by the EU, but does not describe specific rules that apply within individual EU member states.
Please contact the trade section of the Mission of Canada to the European Union at BREUTD@international.gc.ca if you have specific questions or are facing issues about an EU-level regulation or legislation.
Contact the Trade Commissioner Service for information about country-specific legislation, opportunities or potential barriers to trade. Trade commissioners in one of our 24 offices in the EU will assist you.
Register a trade barrier you have encountered in an EU market with Global Affairs Canada.
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Unless expressed otherwise, all references to “$” are references to Canadian dollars.
Chapter 1: Introduction to the EU and EU services markets
For any Canadian business or person considering exporting services abroad, the European Union (EU) is rich in commercial opportunities. An economic and political union of 27 Member States and more than 445 million people, the EU has built an integrated Single Market, developed common policies, liberalized travel across national borders and launched a common currency shared by 19 EU countries. It remains one of the economic success stories of the 20th and 21st centuries.
Despite the global crisis that first hit Europe in late 2008, and the withdrawal of the United Kingdom, the EU remains a major power and an attractive place in which to do business. Most notably, thanks to the Canada-EU Comprehensive Economic and Trade Agreement (CETA), which entered into force in September 2017, Canadian businesses and service providers currently enjoy preferential access to one of the biggest markets in the world.
I. EU membership
The European Union currently consists of 27 member states.
Map of EU member states
Source: European Council
The United Kingdom (UK) left the EU on January 31, 2020, and is now in a transition period with the EU until at least December 31, 2020. Importantly, Canadian firms will see no change in how they trade with the UK for the duration of the transition period. For more information, please refer to the summary information for Canadian companies.
Candidate countries for EU membership include Turkey, Serbia, Montenegro, the Republic of North Macedonia and Albania—however, no firm timelines can be provided for the accession of these countries to the EU. Bosnia & Herzegovina and Kosovo have also expressed interest in joining the EU, but do not yet fulfil the political and economic requirements for EU membership.
The countries of the European Free Trade Association (EFTA)—currently Norway, Iceland, Switzerland and Liechtenstein—participate in the EU’s internal market, while Turkey is part of a Customs Union with the EU, making Europe an ever-expanding marketplace.
II. How the EU functions
The EU is a complex organization based on a sharing of sovereignty between the national and European levels; it has federalist characteristics, but is not a federal state in the same way as countries like Canada. On top of this, it is composed of unique institutions that have no parallel at national level, the European Commission being a perfect example (since it functions as both an executive for the EU and a source of legislative proposals).
As a result, the intricate workings and legal architecture of the EU can be challenging for outsiders to comprehend fully. This is especially the case for services, where certain aspects are regulated by laws adopted at the EU level (e.g. online portals allowing providers access to information about how to expand their services into another Member State) while other factors are determined by the laws of each individual Member State (e.g. prices, labor conditions). This guide will help you understand the services market of the EU and navigate through its system.
For more information about how the EU institutions and the legislative process work, you may consult the EU decision-making process website and the European Parliament’s legislative power website (in particular the section on the so-called “ordinary legislative procedure”, which is the standard procedure).
III. The EU economy in the world
The European Union is a market that should be high on the list for Canadian exporters and businesses looking to expand their market share outside Canada for these reasons:
- It is the world’s largest economy, with a GDP of over €15 trillion in 2017 (Source: World Bank)
- Germany, France, and Italy are individually among the 10 largest economies in the world
- Collectively, the EU accounts for approximately 15% of total world trade
- The EU is also one of the world’s largest markets, with over 446 million consumers
Snapshot of the EU services sector
- The services sector accounts for more than two thirds of EU GDP and around 90% of job creation in the EU
- Financial services are a vital sub-sector, with key international financial centres like Frankfurt and Dublin currently located within the EU
- Important and growing sub-sectors:
- professional services (legal, consulting)
- technical services (architecture, engineering)
- digital services
- EU commercial services represent 26% of total global services transactions, and more than 40% in terms of balance of payments
IV. Trade between the EU and Canada
Canadian exporters considering doing business in Europe already have a solid base from which to start. In 2018, the EU was Canada’s second most important trading partner after the United States, with around 7.6% of Canada’s total external trade. Canada’s 2018 exports to the 27-member EU came to nearly $44.5 billion.
Trade in services is significant, with Canada exporting just under $20.4 billion in services to the EU in 2018, while importing $27.7 billion from the EU in the same year. During 2018, Canada's services exports to the EU represented 16.9% of its total services exports.
EU-Canada trade in services 2016-2018 (€ billions)
Source: European Commission, DG TRADE
Text version - EU-Canada trade in services 2016-2018 (€ billions)
|Year||EU imports (€ billions)||EU exports (€ billions)||Balance|
Canada’s top services export categories
In 2016, the latest sector-specific data available, Canada’s top services export categories to the EU included:
- Financial services ($2.518 billion)
- Management services ($2.413 billion)
- Computer and information services ($1.472 billion)
- Research and development ($1.419 billion)
- Charges for the use of intellectual property ($899 million)
- Architecture, engineering and other technical services ($814 million)
- Communications services ($538 million)
2016 Canada Service Exports to the EU: Main Sectors (%)
Source: Statistics Canada. Table 36-10-0007-01 International transactions in services.
Text version - 2016 Canada Service Exports to the EU: Main Sectors (%)
|Service||Percentage of main sector|
|Computer and information services||12.9|
|Research and development||12.5|
|Architectural, engineering and other technical services||7.1|
|Maintenance and repair services||2.2|
These figures are positive and show there is a lot of room for further growth, especially in light of the recent upgrading in EU-Canada trade relations.
Comprehensive Economic and Trade Agreement (CETA).
This free trade agreement, which entered into force provisionally on September 21, 2017, removes most tariffs and creates plenty of new opportunities for businesses, including SMEs and service exporters. See Chapter 2 for more information on CETA.
For additional information on Canada-EU trade, see the website of the European Commission Directorate-General for Trade and the Mission of Canada to the EU.
V. The EU market
The structure of the EU is quite unique and its laws and regulations touch on a vast array of matters, including economic, environmental and social policy. However, from the point of view of Canadian exporters, the essential characteristics of the EU market can be summarized as follows.
First, the EU is a Customs Union with a common external tariff on imports on goods from non-EU countries and a common commercial policy (for an overview of what this means in practical terms, please refer to Chapter 2 of Exporting to the EU – A Guide for Canadian Business).
Second, the EU is a Single Market. The Single Market (or “Internal Market”) was created in the 1980s and 1990s with the progressive removal of technical and physical barriers to the movement of people, goods, services and capital. The single market makes it easier for companies to do business in Europe with access to 27 national markets, more than 445 million potential customers and harmonized rules across the EU.Footnote 1 The EU has also introduced a number of EU policies (competition, science and technology, transport, energy, environment, etc.) to assist the functioning of the Single Market. EU citizens of the Schengen area can travel freely in this area without undergoing passport and border controls.
Finally, 19 out of the 27 EU Member States have taken European integration further and adopted the Euro as their common currency: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia and Spain. These 19 countries make up the “Eurozone”. Introduced in 1999, the Euro is the world’s second most important international currency after the U.S. dollar. It is the second most traded currency in foreign exchange markets and is used in more than one third of all foreign exchange transactions.
V.1 The Single Market for services
The freedom to provide services is one of the four “fundamental freedoms” enshrined in the basic law of the EU. Although great achievements have been made in integrating the economies and markets of the 27 Member States, the Single Market for services is, by comparison to that for goods, underdeveloped. Despite the importance of services to the overall EU GDP, is a politically contentious area has proven difficult to harmonize across all 27 Member States.
There are several reasons for this: one is fear of “social dumping”, i.e. situations where workers are posted by their employer to deliver services in a Member State with less strict regulatory conditions than the Member State of origin. This leads to potentially depressed working conditions and wages in the host country; there is also the fact that many services are considered to be of public interest (e.g. energy supply, health services) and central to social solidarity, therefore making governments reluctant to subject them to increased competition and liberalization.
Regulation of services by the EU has generally been most successful when focused on thematic areas, with many laws adopted regarding financial services, digital services, etc. These various sectors, all-important for Canadian exporters to Europe, will be addressed in more detail in the chapters that follow.
V.2 The Services Directive
Outside the thematic areas mentioned above, efforts have been made to harmonize the overarching rules for services trade at the EU level.
In 2006, the EU adopted its Services Directive 2006/123/EC. Applying mainly to sectors like retail, tourism, construction and business services, the Directive promotes the right of service providers to conduct business in any EU Member State, and sets up web portals (known as ‘points of single contact’) to facilitate the exercise of this right.
Many service providers find the Points of Single Contact an extremely useful tool, as it gives you vital and practical country-specific information, such as:
- Licenses, notifications or permits needed to start a business
- Requirements for offering services on a temporary basis
- Recognition of professional qualifications
- Labor laws and social regulation
The Directive does not cover services that governments regard as being of public general interest, such as postal services, supply of electricity, gas and water, and waste treatment.
Key considerations for Canadian service providers
Canadian companies exporting services to the EU without a presence are governed by the laws of the individual Member State where the service is supplied. The scope of the Directive is limited to services supplied by providers who are established (e.g. having a permanent physical presence) in any of the 27 Member States of the European Union. There are differences in key thematic areas like financial services: see Chapter 5 of this guide for more information.
Refer to the EU Services Directive for more information.
Get help from the Trade Commissioner Service
Even if not applicable to certain Canadian exporters, this illustrates not only the opportunities but also the challenges of doing business in the European Union.
It is crucial to remember that the EU remains a union of 27 sovereign countries, with 23 different official languages and often diverse economies, business cultures and socio-economic conditions. To be successful in the European Union, it is important to understand these differences.
The Canadian Trade Commissioner Services can help you navigate this fertile but complex business environment by guiding you through EU and national laws and supporting your efforts to expand into the European market.
Chapter 2: Exporting Services to the EU
Business opportunities between Canada and the EU are numerous and growing, especially since the application of CETA. This chapter explores the new trade opportunities and openings for Canadian businesses in Europe, taking into account the distinct features of each industry sector and country as well as recent trends and developments in the economic, regulatory and political spheres.
I. CETA from a bird's-eye view
CETA was signed on October 30, 2016 and entered into force on September 21, 2017.Footnote 2 CETA covers virtually all sectors and aspects of Canada-EU trade in order to eliminate or reduce barriers. CETA addresses everything from tariffs to product standards, investment, professional certification and many other areas of activity.
CETA is composed of 30 chapters, three protocols and more than 1,000 pages of annexes, which deal with issues such as intellectual property rights, regulatory cooperation, mutual recognition of qualifications, sustainable development, subsidies and public procurement, to name only a few.
I.2 Scope of services covered
Half of the additional economic growth generated by CETA in the European economy is expected to come from trade in services, in the broader sense of the term—meaning all services from intellectual and highly specialized sectors (e.g. financial, legal, engineering, architecture services), to business and commercial sectors (e.g. management, e-commerce), technical sectors (e.g. digital/ICT, maintenance and repair), etc.
CETA gives Canadian service suppliers the best market access the EU has ever granted to any of its free trade agreement partners. This means that Canadian suppliers in most service sectors are on an equal footing with EU service providers and receive better treatment than most of their non-EU competitors. CETA uses a negative list approach, meaning that all service sectors are covered unless explicitly listed as otherwise.
Canadian services exporters can enjoy better predictability and transparency in a large number of service sectors of interest to Canada, including architectural, engineering, and R&D services. Any future regulatory or legal changes that make it easier for Canadian service suppliers to access the EU market will automatically be locked in under CETA, and therefore cannot subsequently be made more restrictive. The EU now also treats Canadian service suppliers no less favorably than it treats service suppliers from its existing or future free trade agreement partners.
Cross-Border Trade in Services (CBTS) refers to the production, distribution, marketing, sale, and delivery of a service, including payment for and use of that service by a consumer. Provisions of the CBTS Chapter form the foundation for the liberalization of the services market under CETA.
Services market liberalization under the CBTS chapter is complemented by commitments in other, related areas of the agreement. Temporary Entry provisions address barriers at the border for businesspersons. Commitments under the Domestic Regulation chapter facilitate the provision of services once a border has been crossed. Moreover, the Mutual Recognition of Professional Qualifications chapter establishes a framework to support the ability of Canadian and EU professionals to have their qualifications recognized in both jurisdictions. Sector-specific provisions are also established in stand-alone chapters on Telecommunications and Electronic Commerce. Together, these chapters work in concert to ensure broad-based liberalization for services trade between Canada and the EU.
More about Services covered by CETA
- EURLex – CETA full text
- European Commission – CETA chapter by chapter
- European Commission – CETA explained
II. Business opportunities for Canadian exporters in Europe
II.1 Trends in promising sectors and countries
While often considered as a whole, it is important to take into account that the EU is in reality 27 countries, each with its own characteristics and economic setting. As shown below, this fact is vital in the context of services, where national markets remain quite fragmented.
Under the EU’s reform efforts, the services sector saw the removal of many regulatory bottlenecks, harmonization of standards throughout the Union, and improvements in the infrastructure necessary for the provision of many services. In particular, the Single Market Strategy, the Digital Single Market, the Capital Markets Union and the Energy Union projects are the source of many business-friendly structural reforms and investments, also making it easier for non-EU service providers to do business in Europe.
Trends and differences among EU member states and sectors
When comparing dataFootnote 3 on services imported by EU countries, a pattern emerges. For most southern and eastern European Member States, the largest service imports are in the travel and transport sector. Notable exceptions include Croatia, which also imports financial and ICT services at a significant rate, and Estonia, the services import portfolio of which resembles that of the Nordic Member States (e.g. Sweden, Denmark).
The Nordic Member States import a high number of services in the ICT and construction fields in addition to travel and transport. Western European countries usually have a higher share in imports of ICT services and charges for the use of intellectual property than the rest of the EU. A special category with a financial services-heavy import portfolio consists of the UK, Luxembourg and Ireland.
On ICT, it is worth noting that the EU is the largest importer of digital services in the world. Yet, there is diversity across the EU due to differing quality in digital infrastructure and disparities in online activity. Countries like Romania, Bulgaria and Italy rank the lowest in terms of connectivity, internet use and integration of digital technologies (see Digital Economy and Society Index 2018). These figures imply significant room for improvement and, by extension, opportunities for Canadian players. Romania is the Member State having registered the largest improvement in this field over recent years. Germany, Malta, Ireland, and the Netherlands have also made significant progress. These growth rates are indicators of business opportunities for external players like Canadian companies. Overall, ICT sectors in the UK, France, Germany and Spain have seen steady growth since 2014, while Italy is stagnating.
As both internet penetration in Europe and the number of companies selling online are steadily increasing, e-commerce is an ever more dynamic area of the EU’s economy with sales worth $455 billion in 2015. Despite Brexit, the biggest market will remain the UK, followed by Germany and France. . Spain, Italy and the Netherlands follow at some distance. With e-commerce, growth rates in Western Europe being strong yet declining, Canadian companies should look towards less saturated markets such as eastern, central, southern or northern Europe. Nordic countries are among the highest ranking in terms of GDP and southern Europe is enjoying high growth rates with a projected jump of 4% between 2017 and 2018. Romania has seen the largest e-commerce growth (37%).
As one of the largest service sectors, business services contribute to 12% of EU GDP. Business services range from technical services such as engineering, architecture and IT, to other professional services such as legal services, employment services and facility management. In particular, Poland and Romania’s business services sectors are experiencing rapid growth, especially in the field of outsourced or offshored business services.
In the area of construction, the industry in eastern and central Europe is showing recovery after taking a big hit in the 2008 financial crisis: a slightly higher-than-expected market growth of approximately 4.4% on average has been forecast for the period 2018–2022. Overall, the Nordic construction markets showed the strongest market growth over 2017.
The Internet and the widespread distribution of smartphones have spurred the emergence of new business models (from online sharing platforms to video on demand (VOD) services), which disrupted the traditional business model of the audiovisual industry and led to the rapid emergence of a few dominant players and to market concentration. In response, the EU to support the competitiveness and the diversity of its audiovisual industry for the period 2014-2020 has earmarked over €800 million.
The graph below shows that Canadian services exports are largely concentrated in 8 EU Member States.
Graph of Canadian service exports to top importers of Canadian services in EU (Receipts, 2017) (in million $)
Source: Statistics Canada. Table 36-10-0007-01 International transactions in services, by selected countries, annual (x 1,000,000)
Text version - Canadian service exports to top importers of Canadian services in EU (Receipts, 2017)
|Country||Service exports (in million $)|
The largest importer of Canadian services is the UK, which imports almost twice as much as France in second place. Another big importer of Canadian services is Germany, followed by the Netherlands, Belgium/Luxembourg, Ireland and Sweden. As can be seen from the graph, western European states are currently the main services importers from Canada.
Graph of top Canadian services exports to leading importers of Canadian services in EU (in million $)
Source: Statistics Canada. Table 36-10-0007-01 International transactions in services, by selected countries, annual (x 1,000,000)
Text version - Top Canadian services exports to leading importers of Canadian services in EU (in million $)
Total services, receipts
Commercial services, receipts
Transportation and government services, receipts
However, with ongoing reforms and the Juncker Plan showing results, new business opportunities for Canadian services exporters in other, less saturated European markets are expected.
Trade shows are also a good opportunity to learn more about business openings in your sectors and markets, such as the Mobile World Congress (MWC) in Barcelona, Spain; Gamescom—the digital gaming and software fair in Cologne, Germany; Pollutec—the environmental technology fair in Paris and Lyon, France. Please contact your trade commissioner for a list of trade shows in the EU.
Tips on best prospects, key business opportunities and growing sectors per country are available in Annex 2 of this Guide.
More Canada-Europe trade statistics
II.2 Economic and political priorities in the EU
Most EU legislation and regulation is guided by overarching policy goals or “themes” that are geared toward boosting innovation and sustainability in the European economy while reinforcing the EU’s competitiveness.
The objective of maximizing the use of a product or material throughout its life cycle is expected to bring about cleaner technologies, products and services (e.g. pollution control, sustainable waste management, and eco-construction). By 2030, the European Commission aims to have all plastic packaging be recyclable. To this end, it is implementing actions to improve plastic recycling, curb plastic waste and littering, and stimulate investment and innovation in sustainability. This opens up opportunities for environmental and clean tech services. As an example, expertise in combatting marine litter could open up business opportunities ushered in by the new EU regulations in this field to Canadian companies.
Energy Union and Climate
The EU aims to transform its energy market to make energy supplies more secure, clean, affordable and sustainable. Key EU initiatives in this field provide opportunities for Canadian companies in the traditionally fragmented European energy market(s) that have historically been under the control of a few large publicly owned energy providers.
As part of its long-term energy strategy, the EU has set energy efficiency, greenhouse gas emissions, and renewable energy targets for 2020 and 2030. For the longer term, the European Commission published in 2018 its strategic vision for a carbon-neutral economy by 2050.
The EU’s ambitious energy and climate vision presents opportunities to Canadian service providers in the renewable energy industry and related sectors. In particular, in the field of using domestic European resources to achieve energy security and in decarbonizing the economy, Canadian companies have a role to play given their experience.
Digital Single Market
The EU has made a top priority of breaking down barriers to the flow of digital goods and services across Member States. This will require enhancing Europeans’ capacity on Artificial Intelligence (AI), the Internet of Things (IoT), cloud computing, 5G, etc.
The European Commission and EU Member States are investing in high-speed and secure ICT infrastructure and have taken steps to harmonize the regulatory framework to level the playing field, increase interoperability and provide conditions conducive to innovation, fair competition and investment.Footnote 4 This has spurred growth in the ICT sector, particularly in non-western European Member States.
Capital Markets Union
Due to fragmented national markets, Europe lags behind in terms of giving businesses easy access to the capital they need to develop and grow. A comprehensive action plan was introduced in 2015 to facilitate better access to capital on public markets for start-ups and other companies. More integrated and deeper capital markets will channel more funding to companies, especially SMEs, and infrastructure projects.
Industry, SMEs, Entrepreneurship and Internal Market
Over recent years, the European Commission has put forward an ambitious set of measures to deepen the Single Market and make it fairer, in particular through its Single Market Strategy. For Canadian companies doing business in the European market, a more integrated and deeper Single Market is good news, as it enables them to export more services with fewer bureaucratic hurdles and costs. Furthermore, the Single Market reduces the vulnerability of companies to supply or demand shocks in specific markets or countries.
Aerospace, Security and Defense
The EU’s aerospace industry is the second largest in the world, and the EU is the world’s largest importer of aerospace products.Footnote 5 The EU currently is in the process of establishing a European Defense Fund (EDF) as a vehicle to finance joint research, development and acquisition of state-of-the-art defense technology and equipment in the EU. For 2019 and 2020, the EU has allocated €500 million in funding for EDF, a number that is set to increase to €1.5 billion per year post-2020. Canadian service providers may be able—directly or indirectly—to benefit from the increased spending in the field of defense cooperation.
In 2018, the EU also launched permanent structured cooperation (PESCO) in the area of security and defense policy. Currently, third countries may exceptionally participate in 34 PESCO projects. As a NATO ally, Canada is in an excellent position to become such a third country member of PESCO projects, thus creating opportunities for Canadian companies in the aerospace, defense, ICT, maritime, transport, space and medical sectors.
Research and Innovation
Horizon Europe is the world’s largest research and innovation funding program (2021-2027), with a budget of €95.5 billion (35% climate change).
Canadian researchers and innovators are active participants in this program – mostly in researcher mobility (Pillar 1) and global challenges (Pillar 2, e.g. Health, Food and Climate). Canadians are encouraged to apply to Horizon Europe project calls. Funding up to C$250k is available through: NFRF 2022 Horizon Global Platform Competition.
In the previous EU framework programme, Horizon 2020, Canada was the third most active non-European partner, behind the US and China (out of 24 non-associated non-EU countries). Canada is in talks on possible association(enhanced membership) to Horizon that could allow direct access to EU funding to collaborate with partners from around the world.
Please contact the trade section of the Mission of Canada to the European Union at BREUTD@international.gc.ca for:
- a practical guide on how to use the Horizon Europe portal
- a full list of STI funding programs
- other support on STI collaboration with the EU
Chapter 3: Commercial Rules
Regardless of your sector of activity, all businesses must be aware of the horizontal commercial rules applicable to trade in services in Europe. In this chapter, you will find concrete information on the functioning of the EU market for services, as well as your legal obligations and opportunities to facilitate trade with European consumers, companies and workers, including:
- Value added tax (VAT): your obligations as a Canadian exporter
- Online and distance sales of services: opportunities with e-commerce practices, rules against unjustified geo-blocking and geo-discrimination
- Payments and transactions
- Your relationship with European consumers: EU consumer rights and commercial practices
- The EU labor market: main principles and minimum social standards
I. Value Added Tax
VAT is a consumption tax that is charged on most services (and goods) sold in the EU. To a certain extent, it is comparable to the Canadian Goods and Services Tax (GST).
Each EU member state is free to apply its own VAT rates and exemptions within the framework of the applicable VAT law; in general, the average VAT rate varies from 17% to 27%, with reduced rates applicable for specific services. Some supplies are exempt from VAT: activities in the public interest (such as medical and dental care, social services, education, etc.), most financial and insurance services and certain supplies for lands and buildings.
As different rules may be applicable depending of the type of services provided and type of client for whom the services are performed, as a service provider performing services toward EU clients or performed within the EU, it is important to verify whether any VAT obligations need to be fulfilled before performing any transactions.
The applicable VAT rules depend on:
- the country in which you offer your services
- the type of services
- the nature of your customer
This could lead to an obligation to register for VAT purposes and to fulfil specific VAT compliance requirements (VAT returns, listings, issuing of VAT invoices, VAT bookkeeping, etc.). VAT rules include many exceptions to the general rules, which could differ between EU Member States. It is therefore important to consult a local advisor to verify the precise regulations applicable and whether there are any specific obligations to fulfill.
I.1 General Regime
In principle, within the EU, the VAT applicable to services depends upon the nature of the service recipient.
If the recipient is a private customer (i.e. not a VAT taxable person), the country in which the service provider is located will define the applicable VAT. The VAT will be due by the service provider.
If the recipient is a business customer (i.e. a taxable person for VAT), the country where the client is established defines the applicable VAT rules. In that case, if the service provider is not established in the country where the client is located or does not have any establishment in that country, the VAT will not be due by the supplier. Instead it will be “reverse charged”—meaning that the client will have to calculate the VAT due via its own VAT return in the country in which he or she is established. The invoice will not mention any VAT, but the reference to the application of the reverse charge. In such case, the service provider will not have the obligation to register for VAT in the country of the service recipient.
Summary of the “place of supply” rule
Identification of where and to whom the VAT must be paid if exporting services to the EU.
Who is your customer and where is he or she located?
- Verify location: to make sure that your customer is established in the EU, you should ask for their billing address
- Verify identity: does your customer buy your services in their personal or professional capacity? A business customer must have a valid VAT number. You can verify the validity on the European Commission VIES database.
You are selling to a taxable person (e.g. a company acting in its economic capacity with a valid VAT number).
- The supply of the service is taxed where the customer is established
- Canadian companies do not usually have to charge VAT in most cases it is paid by EU business customers via the reverse charge procedure
You are selling to a non-taxable person (e.g. an individual consumer or an organization not acting in its economic capacity).
- The supply of the service is taxed where the supplier is established
Note: Ask for professional advice before invoicing to your customer. VAT rules and applicable rates vary from one member state to another and from one sector to another.
When the general rule applies, and as long as you are not established in the EU, you are often not subject to VAT taxation in Europe. However, note that the exemptions are numerous depending on the types of services offered and the countries concerned (see below, Sections I.2 and I.3). It is therefore crucial to carefully identify what are your specific VAT obligations before trading to Europe.
More information about VAT rules:
- Directive 2006/112 (the VAT Directive)
- Basic information on the application of VAT in Member States
- Basic information on where to tax
- List of the EU Member States’ VAT rates
I.2 Typical exceptions and how to find them
Many exceptions derogate from the general regime presented above. These exceptions are regulated by national law and therefore require attention and careful examination of the applicable national law. Exceptions typically include the following:
- Certain services apply a different “place of supply” rule and consider other criteria to define the applicable VAT. These special rules deviate depending on whether the customer is a business customer (B2B) or a private customer (B2C). For example, this is the case for services connected with immovable property on which the VAT of the country where the immovable property is located applies.
- Certain services may be taxed where they are materially performed. This is the case for restaurant and catering services, and certain types of transport services, cultural, artistic, sporting, scientific, educational, and entertainment services. In that case, the VAT of that country will in principle be due by the service provider unless the EU member state applies a specific reverse charge procedure.Footnote 6 If no reverse charge procedure applies, the service provider will have the obligation to register in the country in which the services are performed.
Sector exemptions differ from one EU member state to another, for not only the applicable VAT rates but also the scope of the tax base, the required administrative procedures and formalities. It is therefore crucial to verify on a case-by-case basis whether an exemption may be applicable via the European Commission’s table of derogations and the national VAT authorities.
I.3 VAT on digital services
Key rules and principles
Certain electronically supplied services, such as music downloads, video on demand, downloaded applications (or apps), e-books or e-publications and anti-virus software are subject to specific “place of supply” rules depending on where the parties are located and the type of customer.
- If those services are supplied to non-taxable persons (B2C), the place of supply is the place in which the customer is established (i.e. the VAT rates and rules of the country of your customer apply).
- If those services are supplied to business customers (B2B), the general “place of supply” rules for services apply (reverse charge procedure—see Section I.1 “General regime” above).
Your obligations when trading digital services
This means that if a Canadian company provides digital services to private EU customers, the company would be obliged to register and fulfill the VAT requirements in every country to the services are supplied. In the interests of simplification, the EU has put in place the so-called Mini One Stop Shop (MOSS), with which only one single registration is required; all other obligations are automatized and processed by the system.
How MOSS works
In practice, under that scheme, a taxable person who is registered on MOSS in any EU member state (the member state of identification”) electronically submits quarterly MOSS VAT returns detailing the supplies of telecommunications, broadcasting and electronic (TBE) services to non-taxable persons in other Member States (the “member state of consumption”), in addition to the VAT due. These returns, along with the VAT paid, are then transmitted by the member state of identification to the corresponding member state of consumption via a secure communications network.
Scope of services covered by the MOSS
The MOSS and the specific rules mentioned above are applicable only to services considered as TBE services—telecommunications services, television and radio broadcasting services and electronically supplied services. For other services where local VAT is due, the service provider is still obliged to register for VAT purposes in that country.Footnote 7
In order to modernize and simplify the application of VAT for cross-border e-commerce, the EU revised the VAT Directive 2006/112. In particular, the broadened the scope of the MOSS scheme to all types of services, and to distance sales. These new measures will apply as of 1 July 2021.
More information about MOSS
- European Commission – Guide to the VAT Mini One Stop Shop
- European Commission – Register to MOSS
- European Commission – Modernizing VAT for cross-border e-commerce
II. Online and distance sales of services
When selling online and electronic services in the EU/EEA,Footnote 8 service providers follow basic and common rules on mandatory consumer information, online contracting and commercial communications (advertising). The e-Commerce Directive 2000/31 ensures that those rules are harmonized in all EU/EEA countries, therefore facilitating cross-border business and legal certainty for sellers and protection for consumers.
Does the e-Commerce Directive apply to my business if I am not established in the EU/EEA?
The e-Commerce Directive applies only to businesses established in the territory of the EU/EEA. However, given the global dimension of electronic commerce, the EU rules are designed consistently with international rules on e-commerce and those of its trading partners, in particular the WTO and CETA frameworks. Complying with EU rules will better facilitate your business in Europe.
What services does the e-Commerce Directive apply to?
- online information services
- online selling of products and services
- online advertising
- professional services
- entertainment services and basic intermediary services, including services provided free of charge to the recipient and funded, for example, by advertising or sponsorship
Which information should be provided to consumers?
Under the e-Commerce Directive, service providers must make at least the following information easily, directly and permanently accessible:
- Their name, geographic address of establishment and email address
- Their registered name and registration number (if registered in a public register)
- Particulars of the responsible supervisory authority (if subject to an authorization scheme)
- Information on professional bodies registered with, professional titles granted, and applicable professional rules as well as the means to access them
- Their VAT identification number (if registered)
Prices must be clearly indicated, including whether they include tax and delivery costs.
Details on advertising and emails
Commercial communications must be clearly identifiable as such, including the identity of the person or entity on behalf of which they are sent. Promotional offers and competitions or games are clearly identifiable as such. Make sure that you comply with personal data protection rules and any opt-outs of your recipients to avoid unsolicited communications (see Chapter 4 on Digital Services, Data Protection).
Sharing information with customers: steps for ordering
Before the order is placed
- the steps to follow in order to conclude the contract
- when and how the contract will be filed and accessible
- how to correct the contract in case of a mistake
- the languages offered for the conclusion of the contract
- any relevant codes of conduct and how to consult them online
After the order is placed
- electronically about the receipt of the order without undue delay (i.e. confirmation of order, state of play and processing of the request)
- about the available options to modify or correct potential errors in the order
Certain exemptions apply to contracts concluded exclusively by exchange of email (or equivalent individual communications).
Liability of intermediaries
The Directive exempts intermediaries from liability for the content they manage if they play a neutral (merely technical and passive) role and remove or disable illegal content expeditiously upon becoming aware of it. EU Member States cannot impose any general obligation on intermediaries to monitor the content they manage.
More information about sharing information with customers
- European Commission – New rules on e-commerce
- European Commission – Staff Working Document on online services, including e-commerce, in the Single Market (SEC (2011) 1640): this is an in-depth guide on the obligations set out by the e-Commerce Directive
II.2 Geo-blocking and geo-discrimination
When selling services in the EU/EEA market, you must pay attention to the EU rules on geo-blocking and geo-discrimination (Regulation 2018/302). These rules apply to all service suppliers operating in the EU/EEA market, regardless of their location, even if you are not established in Europe.
Geo-blocking refers to practices used by online sellers that result in the denial of access to websites (typically an e-commerce platform) in one or several EU/EEA Member States. It also includes cases where access to a website is granted but customers are automatically redirected to another website.
Geo-discrimination describes a situation where online sellers discriminate against a group of customers for reasons of nationality, place of residence or establishment, for example by offering them different prices and conditions than other customers enjoy or by restricting payment via debit/credit card from a different country.
Due to differences of national legislation, tax regimes and variations in shipping costs across the EU/EEA, there may sometimes be justified reasons for geo-blocking practices when trading in Europe. However, unjustified geo-blocking or geo-discrimination based on the desire to segment markets artificially, increase profits or discriminate against consumers without any valid reason is strictly forbidden.
In particular, the Geo-blocking regulation prohibits geo-blocking or geo-discrimination of EU/EEA customers in three types of business situations:
Examples of obligations towards EU/EEA customers
|Your business situation||Your obligations toward your EU/EEA customers|
|You are selling goods without (or with limited) physical delivery||All your EU/EEA-based customers must be able to purchase goods in the same conditions, regardless of their location. If you do not offer delivery (or offer delivery in a limited area), customers can organize delivery themselves.|
|You are selling electronically supplied services (e.g. cloud, data storage, website hosting)||All your EU/EEA-based customers must be able to purchase your electronically supplied services under the same conditions, regardless of their location.|
|You are selling services in a specific physical location (e.g. tourism)||Any EU/EEA-based customer must be able to purchase those services in the same conditions. The country of origin, residency and nationality of your customers do not justify any form of discrimination.|
Services not covered by the rules on geo-blocking and geo-discrimination:
- Non-economic services of general interest (e.g. social services), transport services, gambling activities, health-care services, audio-visual services, financial services, transactions that are confined within a single member state and do not cross state borders.
- Copyright-protected content such as music, videos, e-books and streaming services.
- Unlike price discrimination, price differentiation is not prohibited. Traders remain free to set different prices on websites targeting different customer groups.
Make sure you comply with EU rules on geo-blocking and geo-discrimination
Step 1: Review existing terms and conditions of your selling practices
Remove any rules that block or limit access to online systems based on a customer’s nationality, place of residence or establishment. This includes automatic rerouting, unless the customer has explicitly consented to the redirection and the website originally accessed remains accessible.
Step 2: Review existing payment requirements
While traders remain free to choose their accepted means of payment, the regulation prohibits differential treatment if the following conditions are met:
- Payments are made through electronic transactions by credit transfer, direct debit or card-based payment instrument within the same brand and category
- Authentication requirements are met
- Payments are in a currency that the trader accepts
Step 3: Review distribution policies, logistics and delivery arrangements
Traders have to ensure that they do not discriminate in terms of delivery arrangements between EU/EEA.
More information about geo-blocking
- European Commission – Geo-blocking
- European Commission – Geo-blocking regulation: Questions and answers
- Council of the EU – Geo-blocking: unlocking e-commerce in the EU
III. Payments and transactions
The Single Euro Payments Area (SEPA) harmonizes the way cashless euro payments are made across Europe. It allows European consumers, businesses and public administrations to make and receive credit transfers as well as direct debit and card payments to and from anywhere in the European Single Market (as well as Monaco, San Marino, Andorra and the Vatican) under the same basic conditions as domestic electronic payment transactions in Euro. Notably, the SEPA is not restricted to the Eurozone.
The Payment Services Directive 2015/2366 (PSD2) is the key pillar of the SEPA. It sets common rules for payments covering all types of electronic and non-cash payments, such as:
- Credit transfers
- Direct debits
- Card payments
- Mobile and online payments
The PSD2 lays down rules about the information that payment service providers have to give to consumers and about the rights and obligations linked to the use of payment services. It applies both to intra-EU payments and to extra-EU payments, where one of the payment service providers is located in the EU.
Does the PSD2 apply to your business?
When performing a financial transaction, you have to consider whether the EU rules set down in the PSD2 apply to you. To determine whether the PSD2 applies to your business, examine the following descriptions.
The whole framework of the PSD2 rules applies to you if:
- You are a credit or electronic money institution:
- headquartered in the EU
- OR headquartered in Canada with a branch in the EU/EEA
Title III of the Directive (with the exceptions of articles listed in article 2(4)) applies to you if:
- You are a credit or electronic money institution:
- headquartered in Canada AND without a branch in the EU
- AND your counterpart is located within the EU
In particular, you will need to verify whether you comply with the information requirements listed in Art. 28-60.
The PSD2 does not apply to you if:
- You are an electronic or credit institution:
- headquartered in Canada
- AND without a branch in the EU
- AND your counterpart is not located in the EU/EEA
- OR you are not a credit or electronic money institution
More information about payments and transactions
- The Payment Services Directive 2015/2366 (PSD2)
- The SEPA regulation
IV. Your relationship with European consumers
IV.1 Consumer protection and international trade
The European rules on consumer protection apply for the benefit of consumers based in the EU/EEA market.
For the specific case of international trade with businesses not established in the EU/EEA, EU rules on consumer protection may sometimes apply depending on the jurisdiction governing the contract or trading terms with your consumers, in accordance with the Rome I (593/2008) and Rome II (864/2007) regulations on the law applicable to contractual and non-contractual obligations.
According to those regulations:
- The law chosen by the parties, if at least one of the parties is established in the EU/EEA governs transnational contracts and non-contractual obligations
- When the parties have not chosen the applicable law for contracts related to the sale of goods or provision of services, it is usually the law of the country of residence of the seller or service provider that applies
- However, consumers generally retain the protection rules of their country of residence, and may invoke such rights in judicial procedures, e.g. in case of an act of unfair competition
For more certainty on the rights of your European consumers and your obligations as a service provider not established in the EU/EEA, you are strongly advised to seek professional legal advice.
More information about consumer protection and international trade
- Rome I Regulation 593/2008 on the law applicable to contractual obligations
- Rome II Regulation 864/2007 on the law applicable to non-contractual obligations (not applicable to Denmark)
IV.2 Consumer rights
EU consumers have a high degree of protection when shopping online or away from a retailer’s premises. You need to respect:
- A 14-day EU-wide withdrawal right for consumers after conclusion of the service contract, for distance and off-premises contracts (e.g. typically e-commerce)
- The price paid by the consumer must be refunded within 14 days of the withdrawal
- The trader must provide the consumer with clear information prior to the conclusion of the contract. This information includes:
- the characteristics of the service offered
- the name and address of the trader
- the price including all taxes
- delivery method
- contract duration
- return policy
- Information on digital content must also be clear, including its compatibility with hardware and software
- Pre-ticked boxes on websites for charging extra payments are not allowed
- Surcharges for the use of credit cards and telephone hotlines are not permitted
The national authorities in the Member States of the EU enforce these EU rules.
More information about consumer rights
- European Commission – Guidance document on the Consumer Rights Directive
- European Commission – List of national surveillance authorities
IV.3 Unfair commercial practices
Unfair commercial practices are prohibited in the EU/EEA market
Note that even without being established in the EU/EEA, you may face sanctions for exercising unfair commercial practices that target EU/EEA consumers or harm the collective interests of EU/EEA consumers (see Art. 6(1) of the Rome II Regulation 864/2007 on the law applicable to non-contractual obligations, and paragraph 1.6 of the European Commission’s UCPD Guidance).
Two types of unfair commercial practices are prohibited under the UCPD
Misleading commercial practices
False information, or omission of information, likely to deceive the average consumer (e.g. false claims, hidden advertising).
Aggressive commercial practices
Harassment, coercion or undue influence likely to impair the average consumer’s decision (e.g. manipulation of children, false offers).
For misleading and comparative advertising, please refer to Directive 2006/114, which applies to both business-to-consumer and business-to-business practices.
More information about unfair commercial practices
- European Commission – Unfair commercial practices
- European Commission/Your Europe – Examples of unfair commercial practices
- European Commission’s Staff Working Document – Guidance on the application of the Unfair Commercial Practices Directive, SWD(2016) 163
V. The EU labour market
As a company established in Canada, you can hire local staff based in Europe. In that case, please pay attention to the applicable rules regulating the EU labor market, as outlined below.
Free movement of workers
EU/EEA workers are free to work in all countries of the European Single Market without any discrimination based on their country of origin (unless there is an exception, e.g. in specific public-sector positions). They contribute to and benefit from the social security system of their host country.
EU minimum labour standards
Member states must apply these minimum standards into national labour law and are free to provide higher levels of protection and social benefits to the workers established in their territory. In particular, EU minimum standards on labour law focus on two aspects:
Working and employment conditions
- working time and annual paid leave
- posting of workers
- occupational safety and health
- rights at work
Information and consultation of workers
- transfer of companies
- collective contract termination and redundancies
- employee involvement
More information about minimum EU standards in labor law
- Working Time Directive 2003/88: All European workers are entitled to at least 20 days of annual paid leave and not more than 48 hours of work per week. However, please note that many Member States have adopted more protective working time conditions.
- Rights at work / occupational health and safety
- Transparent and predictable working conditions
- Parental Leave Directive 2010/18: minimum of four months of unpaid leave for parents to care for children under eight years old
- Individual Employment Conditions
- Fixed-term Work
- Part-time Work
- Temporary Agency Workers
- Health and Safety in Fixed-term and Temporary Employment
- Young People at Work
- Sectoral Working Time
- Employer Insolvency
- Transfer of Undertakings
- ILO/EU Joint Database on Transnational Company Agreements
Please keep in mind that Member States often apply higher standards than those contained in the above-mentioned EU regulations and directives. In labor law, it is very common that the EU sets only the bare minimum applicable standards while national governments grant more rights to workers on their territories reflecting their own social and professional traditions, agreements and negotiations between national trade unions and employers, political developments and benefits arising from the various social security systems.
Labor trade unions still play a major role in the evolution of social and professional rights in many EU Member States, in particular in northern countries (e.g. Denmark, Finland, and Sweden). However, worker affiliation to trade unions is generally declining in Europe (e.g. Germany, UK), and is sometimes replaced by direct employer-to-employee structural dialogue under national labor law (e.g. France).
Contracts and terms of employment are regulated by the Member States, in accordance with the applicable EU minimum standards (please see above). In general, national governments set a maximum total duration of successive fixed-term contracts and a maximum number of renewals of fixed-term contracts. Employers provide their employees with their terms of employment in writing before the beginning of their contracts or on the first day of work, including the place of work, professional title, number of days of annual leave, etc.
Please refer to the Member States’ ministries of labor for further details on each national labor law, in particular via the national Points of Single Contact (PSCs) for services providers, or the EURES network (the European Job Mobility Portal).
Do I need to set up my company in Europe?
As a Canadian professional providing your services to EU/EEA consumers, you benefit from the CETA commitments. CETA (Chapter 9) provides rules on the extent to which barriers can be imposed on trade in services between the EU and Canada, including requirements of a commercial presence. Annexes I and II indicate sectors in which EU countries may require commercial establishment to supply a service. In most cases, you do not need to set up your company in Europe to do business with European consumers. For more certainty on the requirement to establish a commercial presence, please consult Annexes I and II and/or seek professional legal advice.
You may also consider creating your company in Europe or registering a subsidiary of your Canada-based company in one of the EU/EEA countries. This could ensure that you always receive equal treatment with local businesses. By doing so, you will get the same rights, but also the same obligations as all EU/EEA-based companies.
Business registers are organized by Member States at the national level, and are often managed by the administrative services of the economy or justice ministries. For more information, please refer to:
- The European e-justice portal (access to national business registers’ websites)
- Directive 2017/1132 on company law (common European rules on disclosure of information on companies in the business registers, capital requirements, divisions and mergers of companies, cross-border mergers)
- European Commission – Company law and corporate governance
Chapter 4: Digital Services
The digital economy is one of the most growth-promoting sectors of the EU market. Economic activities related to data management are estimated to account for €739 billion by 2020, representing 4% of EU GDP, 10 million jobs, and even more when you take into account other digital services such as telecommunications, cybersecurity and audiovisual.Footnote 9
The EU market for digital services offers many business opportunities for Canadian companies and entrepreneurs. In recent years, the EU has made strong efforts to further harmonize rules and obligations for all data and cloud-related services (e.g. data processing, big data, the Internet of Things, storage services), telecommunications, cybersecurity, trust and electronic identification services, and audiovisual services. Now more than ever, it has become easier to expand your business in the EU digital Single Market.
This chapter focuses on:
- Data and cloud services: personal and non-personal data, privacy, reuse of data
- Telecoms and electronic communication services
- Cybersecurity, electronic identification, trust services
- Audiovisual services
For e-commerce and copyright of digital content, please refer to Chapter 3 on Commercial Rules and Chapter 7 on Intellectual Property respectively.
I. Data and cloud in the digital economy
I.1 Personal data: protection, processing and circulation
Personal data protection, processing and circulation inside the EU /EEA (the EEA includes Norway, Iceland and Liechtenstein) are regulated by the General Data Protection Regulation 2016/679 (GDPR). Note that the rules apply to all organizations processing personal data of persons residing in the EU, regardless of the company’s location. It provides the following definitions:
- Data subject: any natural person residing in the EU/EEA
- Personal data: any personally identifiable information relating to a data subject (e.g. name, email address, date of birth, location data)
- Data controller: entities that collect personal data (e.g. banks, companies, public administrations)
- Data processor: entities that process personal data (e.g. data centers, cloud service providers)
Compliance and sanctions
Data controllers and processors should be able to demonstrate GDPR compliance upon request by public authorities at any time. Records are used to demonstrate compliance. Organizations in breach of the GDPR can be fined up to 4% of their annual global turnover or €20 million, whichever is higher.
The GDPR sets down new rights for individuals and new obligations for all businesses, meaning both data controllers and processors. In particular, it reinforces rules on authorization of data processing, consent of the data subject (explicit, but not always mandatory) and restrictions for sensitive data.
Tips for smart compliance
If you anonymize your data, you are no longer within the scope of the GDPR
Anonymization consists in the transformation of personal data into anonymous data, “in such a way that the data subject is not or no longer identifiable”. It places the processing and storage of personal data outside the scope of the GDPR, making data controllers and processors no longer bound by its rules.
If you pseudonymize your data, you are still within the scope of the GDPR but you gain more flexibility
Pseudonymization is “the processing of personal data in such a way that the data can no longer be attributed to a specific data subject without the use of additional information” (GDPR, Art. 4(5)). Pseudonymized data remains within the scope of the GDPR, but offers greater flexibility and liberty to data controllers and processors.
International transfers of personal data from the EU/EEA to other countries
If you wish to transfer personal data outside the EU/EEA, you should verify whether an EU Adequacy Decision covers the destination country.
If the destination country is covered by an EU Adequacy Decision (e.g. Canada)
As long as you already comply with the GDPR, you can transfer the data without any additional EU obligation. Just be sure to comply with the applicable personal data law of the destination country.
If the destination country is not covered by an EU Adequacy Decision
You must apply the GDPR rules on international transfers of data, such as standard contractual rules, corporate rules, certification, codes of conduct, etc. (see GDPR, Art. 46) before the transfer.
Regarding the transfer of personal data from the EU to Canada, the GDPR requires that the level of protection of personal data must be similarly guaranteed under Canadian law and should not be undermined by such transfer. The GDPR provides that the above safeguards be met if the European Commission has made an “adequacy decision”—that is, a decision confirming the protection of personal data by the third country.
On December 20, 2001, the European Commission decided, under the pre-GDPR privacy regime, that Canada is considered to provide an adequate level of protection for personal data transferred from the EU to recipients subject to the Personal Information Protection and Electronic Documents Act (PIPEDA). Existing adequacy decisions under the old data protection regime as laid down in Directive 95/46/ EC, remain in force for GDPR purposes.
The European Commission is currently reviewing the data transfer agreements it has with the third countries, including Canada. The existing EU-Canada adequacy regime will remain in force until it is amended, replaced or repealed by the European Commission. Until the European Commission makes a new adequacy decision under the GDPR, Canadian businesses must comply with the following decision: Commission Decision of December 20, 2001 pursuant to Directive 95/46/EC of the European Parliament and of the Council on the adequate protection of personal data provided by the PIPEDA.
In the absence of the existence of a Commission adequacy decision with respect to a third country, the GDPR permits transfers outside the EU where a company has adopted binding corporate rules. These rules must commit the members of the relevant corporate group to specific standards with respect to data transferred outside the EU. Alternatively, appropriate safeguards might be put in place between contracting parties by the adoption of European Commission approved standard, or model, clauses, in order to ensure adequate levels of protection with respect to the transfer of personal data outside the EU.
At the time of writing, the following countries are covered by an EU Adequacy Decision: Andorra, Argentina, Canada (commercial organizations only), Faroe Islands, Guernsey, Israel, Isle of Man, Jersey, New Zealand, Switzerland, Uruguay and U.S.A.
More information about the impact of the GDPR on your business with Europe
- Canada Trade Commissioner Service – GDPR guidance
- European Commission – GDPR: What every business needs to know
- European Commission – Data protection: rules for businesses and organizations
- European Data Protection Board – Guidelines for data controllers and processors
- European Data Protection Board – Contact list of national data protection authorities
- European Commission – Rules on international transfers of personal data
- European Commission – Adequacy of the protection of personal data in non-EU countries
I.2 Non-personal data
The treatment of non-personal data in the EU/EEA is regulated by the Free Flow of Non-Personal Data Regulation 2018/1807 (FFoD Regulation) as of May 2019. Please note that the FFoD Regulation applies to you only if you physically store or process non-personal data inside the EU/EEA (contrary to the GDPR, which applies to every business in the world that treats the personal data of EU/EEA residents).
What does “non-personal data” mean?
Non-personal data includes all types of data that do not relate to an identified or identifiable natural person, such as “aggregate and anonymized datasets used for big data analytics, data on precision farming that can help to monitor and optimize the use of pesticides and water, or data on maintenance needs for industrial machines”.
Key points of the FFoD Regulation
- Free flow of non-personal data across borders: public or private organizations can store data anywhere in the EU/EEA & member states may invoke restrictions for public security reasons
- Availability of data for regulatory control: national authorities can access data wherever it is stored or processed in the EU/EEA or in the cloud
- Data portability: the FFoD regulation encourages providers of services in data storage or processing (e.g. cloud providers) to adopt codes of conduct in order to facilitate technical portability of data
Be careful when dealing with mixed datasets
Mixed datasets that include both personal and non-personal data fall within the scope of both the General Data Protection Regulation (only for the part of the dataset that includes personal data) and the Free Flow of Non-Personal Data Regulation (only for the part of the dataset that includes non-personal data).
There is no obligation to store personal and non-personal data separately. However, you might consider having recourse to personal data anonymization to fall outside the scope of the GDPR (see box above, section on GDPR).
More information about European Commission – Free flow of non-personal data
I.3 Privacy in electronic communications
Data exchanged and processed via electronic communication means must comply with specific rules set out in Directive 2002/58 on Privacy and Electronic Communications (ePrivacy Directive).
What does “privacy” mean in this context?
“Privacy” is a broad concept that covers personal data, but also other types of data such as trade secrets, business information, data of legal persons, etc. that are exchanged via electronic means, as well as the confidentiality of such communications.
The ePrivacy Directive and the General Data Protection Regulation complement one another
General Data Protection Regulation
What does it protect?
Protection of personal data
Protection of privacy
Including, but not restricted to personal data
Whom does it protect?
Natural and legal persons
In which context?
Electronic communications only
Rules on web cookies: Web users must grant their consent before cookies are stored and accessed in computers, smartphones or any other connected device.
Rules on personal data breaches: Providers of electronic communication services (e.g. Internet service providers, telecom operators) must notify personal data breaches both to the competent national authorities and to their users.
The ePrivacy Directive is currently under revision. Negotiations on the new proposal are not likely to be concluded before mid-2020, and it is envisaged that the new Regulation would start applying only 24 months after its adoption.
More information about privacy in electronic communications
- European Commission – Digital Privacy
- European Commission – List of Personal Data Protection Competent Authorities
What every business needs to know about data rules in Europe
Do you store, process or circulate personal data of EU/EEA residents?
- In all cases, you must comply with the rules of the GDPR, whether your business is located in Europe or not
- When physically transferring personal data of EU/EEA residents from the territory of the EU/EEA to another country, you must follow the rules of the GDPR on international transfers
- the procedure is simplified for countries benefiting from an EU Adequacy Decision (such as Canada)
Do you store, process or circulate non-personal data?
- You must comply with the rules of the FFoD, only if you physically store or process such data inside the EU/EEA
- If your datasets include both personal and non-personal data, make sure to comply with the GDPR only for the part that includes personal data, even if you are not based in the EU/EEA
- data anonymization or pseudonymization techniques may help you comply more easily with the GDPR.
Providers of electronic communication services in the EU/EEA must also comply with specific rules on data privacy (ePrivacy Directive).
I.4 Open data and reuse of data
Reuse of public sector information
The EU has adopted binding rules on the reuse of public-sector information. Please verify in particular the conditions on non-discrimination, charging, exclusive arrangements, transparency and licensing as set out in Directive (EU) 2019/1024 on open data and the reuse of public-sector information (formally known as the 2003 PSI Directive).
If you wish to reuse private sector or scientific data
There are no binding EU rules applicable; the EU has published advice and recommendations on how to reuse such data.
Applicable laws to reuse of data
|Type of data||Reference EU text||Binding/non-binding?|
|Public-sector data||Directive 2019/1024 Open data and reuse of public-sector information||Binding (EU law)|
|Private-sector data||European Commission Staff Working Document SWD(2018) 125: Guidance on sharing private-sector data in the European data economy||Non-binding|
|Scientific data||Recommendation 2018/790 on access to and preservation of scientific information||Non-binding|
More information about open data and reuse of data
European Commission - From the Public Sector Information (PSI Directive to open data Directive)
II. Telecoms and electronic communications
II.1 Regulatory framework for telecoms and electronic communications
Rules applicable until December 20, 2020
Framework Directive 2002/21
Sets out the general EU framework for electronic communications (e.g. assignment of radio frequencies, sharing and security of networks and facilities, interoperability).
Access Directive 2002/19
Defines market and competition rules for service providers (typically telecom operators), e.g. when they negotiate network access agreements, interconnections and network investments.
Authorization Directive 2002/20
Sets out a system of authorizations to provide electronic communication networks and services, and rights and obligations deriving from such authorizations.
Universal Access Directive 2002/22
Obliges all providers of electronic communication networks and services to supply certain minimum (“universal”) services.
Rules applicable as of December 21, 2020
The European Electronic Communications Code
The (EECC Directive 2018/1972) is a full merging and update of the four texts listed above. It brings substantial changes both in their provisions regarding technical progress, and the scope of services covered. In particular:
- New rules to facilitate competition and predictability for network investments, in particular investments in so-called “very high-capacity networks” such as 5G and fiber (be they among rival operators or new entrants)
- New definition of “electronic communication services” (Art. 2), which also includes “interpersonal communications services” such as over-the-top (OTT) services
- new rights and obligations will therefore also apply to OTT service providers
- New rules on radio frequency (spectrum) licenses and assignment
- New rules on consumer protection, in particular when consumers are signed up to bundles (packages combining Internet, phone, TV, mobile, etc.) and protection for vulnerable consumers (e.g. elderly, disabled, social assistance beneficiaries)
Over-The-Top (OTT) Service Providers under the EECC Directive
OTT service providers, such as services providing voice over IP (VoIP), app messaging services and web-based email services (e.g. Skype, WhatsApp) fall within the scope of the new EECC Directive, by being designated as providers of “interpersonal communication services” (Art. 2 EECC).
Therefore, OTT service providers will have to comply with the EECC rules as of December 21, 2020, except for certain provisions on consumer protection, transparency and contract termination.
Note that the EECC Directive will also expand the scope of application of the ePrivacy Directive (2002/58) to OTT service providers, who will therefore face new obligations on confidentiality, use of traffic and location data.
More information about regulatory frameworks for telecoms and electronic communications
- European Commission – Telecom Laws
- European Commission – 5G for Europe Action Plan
- Timelex – The EU adopts a new electronic communications code
- IAPP – New EECC means the application of ePrivacy Directive for OTTs
II.2 Roaming rules
Roaming means the temporary use of a public mobile communication network of one member state of the EU/EEA, by a user subscribed to the network of another member state. Typical roaming users include tourists, cross-border workers and exchange students who use their mobile phones while travelling. EU legislation distinguishes two roaming markets (wholesale and retail), with two sets of rules.
EU roaming markets
|Roaming market||Application||Billing rules|
|Retail roaming market||Telecom operator to final user||“Roam like at home”|
|Wholesale roaming market||Telecom operator to telecom operator||Wholesale roaming charges are capped in accordance with the rules of Regulation 2017/920 amending Regulation 531/2012.|
More information about retail fair use policy and the maximum wholesale caps
- (Roaming Regulation (Regulation 531/2012)and:
More information about roaming rules
II.3 Market surveillance and competition
As a provider of telecommunication or electronic communication services, your first points of contact are the national regulatory authorities. They make regulatory decisions regarding enforcement of the EU legal framework for telecommunications. To consult the relevant authorities in each country, please refer to European Commission – List of National Regulatory Authorities.
For more information on competition rules in the EU market, please refer to the Guidelines on “Significant Market Power” in electronic communication networks and services: European Commission’s Staff Working Document SWD(2018) 124.
Consult the national regulatory authorities for all administrative procedures
Although the EU/EEA countries have adopted common rules on telecoms and electronic communication services, there is no unified European market for telecommunications in practice.
Operators (whether traditional ones, virtual operators or new entrants) must consult first and foremost the national telecom authorities of each country in which they want to provide services.
National authorities will help you with all procedures required to start your business in Europe such as:
- registration as a telecom operator
- frequency (spectrum) allocation
- guidance related to network investments and competition issues
- technical experimentation of your services (e.g. typically for start-ups and SMEs)
- universal services obligations, etc.
III. Cybersecurity, electronic identification and trust
III.1 Electronic identification and trust services
Electronic interactions between citizens, businesses and administrations are secured by identification and trust services. The eIDAS Regulation (Regulation 910/2014) ensures that electronic identification and trust services issued in one EU/EEA country are recognized in all other EU/EEA countries, and that they offer the same legal certainty as paper-based processes.
eIDAS covers all electronic identification and electronic trust services, such as e-signatures, e-transactions, e-stamps (digital qualified certificates) and other proofs for electronic authentication. Such services are used in all sectors of the economy that require official authentication (such as legal services, financial services, sales, customer identification, document sealing and tracking) as well as by public authorities (tax certificates, compliance).
How eIDAS can benefit your business
Identify which electronic identification or trust services you need
The European Commission Trust Services and Electronic Identification has published an eIDAS Checklist for businesses, and factsheets for:
For electronic identification services
Your main contact point for electronic identification services is the organization in charge of the notified eID System in the main target country (list available on EC website).
- E.g. trusted customer identification
For all other trust services
Choose a trust service provider in the main target country (list available on EC website).
- E.g. document signing, sealing and tracking
Test your eID/trust solution on the eIDAS interactive tool
The European Commission has developed an interactive tool to test your services.
More information electronic identification and trust services
- European Commission – Trust Services and Electronic Identification
- European Commission – eIDAS Toolkit for SMEs
III.2 Security of network and information systems
In some cases, you must comply with binding requirements to ensure the security of network and information systems as well as to ensure minimum protection for critical infrastructures. The rules are set out in the NIS Directive (Directive 2016/1148), which covers all electronic communication networks, connected devices and digital data systems.
The NIS Directive identifies two categories of concerned actors, which are given specific rules and responsibilities regarding security measures and notification of incidents:
- Operators of Essential Services(identified by national governments)
- Any public or private entity that provides “essential services” such as health care, transport, energy, banking and financial market infrastructure, digital infrastructure or water supply.
- Digital Service Providers
- Any legal entity that provides digital services, such as online marketplaces, online search engines and cloud computing services.
If you fall under one of these categories, you must comply with specific rules on security measures and cybersecurity incident notification.
Exceptions (not included in the scope of the NIS Directive): Social networks, e-commerce platforms, Internet payment gateways, price comparison tools, electronic communication providers (which fall within the scope of the ePrivacy Directive 2002/58), trust service providers (which fall within the scope of the eIDAS Regulation 910/2014), micro and small enterprises as defined in Commission Recommendation 2003/361/EC (fewer than 50 staff members and a turnover of less than €10 million).
More information about security of network and information systems
- European Commission – The NIS Directive
- European Commission – State of play of the implementation of the NIS Directive – use this online tool to identify the relevant national cybersecurity authority of each EU country
- ENISA – NIS Directive Tool
- ENISA – Your Must Have IoT Security Checklist
III.3 Cybersecurity certification
At the time of writing, there is no harmonized framework for cybersecurity certification in Europe. Only 13 governments have ratified a mutual recognition agreement that allows cross-border validity of certificates issued in conformity with the Common Criteria for Information Technology Security Evaluation (ISO 15408)Footnote 10 : the SOG-IS MRA.
The Cybersecurity Act Regulation, which was adopted in June 2019, introduces a unified European cybersecurity certification framework. Under this new regulation, ENISA (the EU cybersecurity agency) will create certification schemes for each category of cybersecurity products, processes and services. Service providers will either self-certify the conformity of their services, or apply for third party certification via a recognized European certification body.
Canadian exporters are encouraged to refer to the Standards Council of Canada (SCC) for further information on European cybersecurity certification. In 2016, the SCC and the European Co-operation for Accreditation ratified an agreement that enables the recognition of Canadian certification within the EU market.
More information about cybersecurity certification
IV. Audiovisual services
IV.1 Audiovisual services are excluded from CETA
Audiovisual services (services relating to television, radio, motion picture production and distribution, and sound recordingFootnote 11 ) are excluded from CETA on the EU side.Footnote 12 This means that EU governments are not bound by the same rules on trade liberalization and non-discriminatory treatment of Canadian and European market players as they are in other sectors of the economy. Exemptions regarding audiovisual services can be found in Chapter 7 (subsidies), Chapter 8 (investments), Chapter 9 (cross-border trade in services), Chapter 12 (domestic regulation) and Chapter 19 (government procurement) of CETA.
In practice, this means that EU governments may still apply market regulatory measures and financial support measures to preserve, develop and implement their own cultural policies according to their political preferences, for instance by imposing quotas of specific content to be broadcast on TV and radio channels or by providing public subsidies for the production of local content.
For more information on those measures, please refer to the national regulatory authority for audiovisual services of each member state, as appointed under the Audiovisual Media Services Directive. National authorities are the primary point of contact for audiovisual service providers.
More information about audiovisual services excluded from CETA
- European Commission – List of EU Audiovisual Regulators (national audiovisual authorities)
- European Parliament – Study on Culture and Education in CETA, PE 585.902, 2016
IV.2 Audiovisual media services
The Audiovisual Media Services Directive
Directive 2010/13, as amended by Directive 2018/1808, establishes a regulatory framework related to the provision and distribution of audiovisual media services. It applies to three types of audiovisual media service providers:
- TV broadcasters
- Video on Demand (VOD) providers
- Video-sharing platforms (new since 2018): “where the principal purpose of the service, or an essential functionality of such service, is devoted to providing programs and user-generated videos to the general public.”Footnote 13
- this includes social media services that include video-sharing functionalities
- in principle, newspaper websites are not covered
The Directive obliges Member States to ensure that service providers falling under their jurisdiction must comply with minimum rules such as protection of minors from harmful content, protection of the public from incitement to violence, and minimum shares of European works in VOD catalogues.
In theory, the Directive applies only to service providers that are located in the EU/EEA, or that use satellite uplinks of capacities located in or pertaining to the EU. However, Member States may take “whatever measures they deem appropriate with regard to audiovisual media services that come from third countries and that do not satisfy the conditions laid down in Art. 2.
More information about the European Commission – List of EU Audiovisual Regulators (national authorities)
IV.3 Contracts for the supply of digital content
Contracts for the supply of digital content currently fall within the scope of the Consumer Rights Directive, the e-Commerce Directive and the Unfair Terms Directive (i.e. the general framework for EU private law contracts—for more details, please refer to Chapter 3 of this guide).
The EU adopted Directive 2019/770 on certain aspects concerning contracts for the supply of digital content in 2019. Once entered into force on 1 January 2022, it will set out a legal regime specifically applicable to contracts between businesses and consumers related to the supply of digital content (software, data, video, digital games, etc.)
Chapter 5: Financial Services
Financial services represent a huge portion of the European services sector, not to mention the European economy as a whole. In March 2017, the total financial assets held by bank and non-bank financial institutions in the Eurozone stood at €76.2 trillion (European Central Bank).
Even if one discounts London in light of Brexit, the EU is home to a number of highly reputed global financial centres such as:
The opportunities for Canadian financial service providers in Europe are substantial. Here are examples of some advantageous activities if you are:
- A bank seeking to provide a loan to an EU customer
- An agency giving an opinion on the creditworthiness of a European financial institution
- A company trading securities on a European stock exchange
- An investment firm managing a hedge fund within the EU
The legacy of the 2008-09 financial crisis
Over the past decade, the EU has put in place a more robust framework of regulatory supervision and adopted a raft of legislation, all aimed at shoring up the competitiveness of the European financial sector while at the same time ensuring sufficient safeguards against the abuses and loopholes that exacerbated the crisis.
The result is a complex web of legislative and regulatory rules overseen by an intricate network of European-level and national authorities.
Not only will exporters from Canada need to master these rules in the areas that concern them, but they must also take into account special regimes affecting third-country providers.
EU-level financial supervisory authorities
- European Banking Authority (EBA):capital requirements, mortgage credit, lending, deposit guarantees, etc.
- Contact EBA
- Q&A service with EBA
- European Insurance and Occupation Pensions Authority (EIOPA):insurance distribution, re-insurance, occupational pension, etc.
- Contact EIOPA
- Q&A service with EIOPA
- European Securities and Markets Authority (ESMA):derivatives, counterparties, securities, investment funds, short-selling, etc.
- Contact ESMA
- Q&A service with ESMA
It is important to take note of the three EU-level financial supervisory authorities. Not only do they play an important oversight and coordination role in regulating financial services, but they are also an important source of information for firms and companies (all of them operate a useful Q&A service for stakeholders). If you have any queries or doubts about the conditions for operating in the relevant subsector, you are advised to contact them.
Alternatively, if your intention is to provide a service within only one EU state, get in contact directly with the national financial supervisor in that state. See the full list of national financial supervisory authorities to learn more.
II. How can you access the EU financial services market?
From the perspective of a Canadian company seeking to provide financial services in Europe, there are different possible pathways of accessing the services market. First, you must ask yourself if you are established in an EU/European economic area. Once you’ve answered this question, you can understand what your options are.
Am I established in the European Union/European economic area?
- Yes, I am established in the EU/European Economic area
- No, I am not established in the EU/European economic area
Do I have an equivalence decision in my favour?
II.1 Option 1: obtaining a “financial passport”
Banks and financial services firms that are established and authorized within a country of the European Union/European Economic AreaFootnote 14 have the right to trade freely in any other EU/EEA country. This is more commonly known as a “financial passport”.
The concept of passporting is based on the idea that the EU/EEA is a Single Market for financial services where key rules and standards have been harmonized across every member state; therefore, firms established and authorized in one EU/EEA state should be treated as if they were locally authorized in any other EU/EEA state.
The practical advantages of having one or more financial passports include:
- The opportunity to provide customers with the widest range of financial services across all 27 EU Member States (and the three EEA states)
- The option of establishing a branch in any other EU/EEA state, without having to undertake the more onerous task of setting up a separate legal subsidiary in those other states
- Above all, holders of a financial passport can avoid the costs associated with duplication of licenses and will generally not have to satisfy any additional requirements.
How can you obtain a financial passport?
Once you are established in the territory of an EU/EEA member state and have obtained a licence from the supervisory authority of that state (see section II.3 below), you can start operating across borders if you first notify the supervisory authority where you are established.
Please note that there are in fact nine different passports under the EU financial services system, covering different sorts of service, e.g. one for lending and deposit-taking, one for asset management, another for payment services, etc. You will have to specify the passports you are seeking.
The notification process is quite straightforward and does not normally involve any charge. Find out more on the websites of the following key supervisory authorities:
- German Federal Financial Supervisory Authority: European Passport
- French Prudential Supervision and Resolution Authority: European Passports
For more information, explore the full list of national financial supervisory authorities and their websites. The supervisory arm of the European Central Bank directly supervises “significant” banks and indirectly (through collaboration with national supervisory authorities) supervises other banks. See also the European Banking Authority.
II.2 Option 2: benefiting from equivalence
If you are simply exporting a financial service from Canada to Europe and do not have a registered office in the EU/EEA, you may be able to engage in cross-border activity within the EU/EEA if there is an “equivalence” decision covering your field of business.
Equivalence denotes situations where the European Commission recognizes a third-country legal or regulatory regime as equivalent to the corresponding EU regime. In other words, the Commission may choose to allow Canadian firms to provide selected services and products across the EU/EEA if those firms are already in compliance with similar rules set down by Canadian authorities.
While this may sound like an attractive option, you must take into account the following:
- There is no one-size-fits-all equivalence that would, for instance, permit Canadian firms to operate across the EU/EEA in all subsectors. EU rules for third-country equivalence are scattered across several different pieces of legislation, and they vary widely in scope depending on the legislation you are dealing with.
- Equivalence is not necessarily indefinite. The Commission may choose to limit the duration of the decision. The Commission can also decide to withdraw the decision unilaterally.
- There are no fixed deadlines in the process for obtaining equivalence, so it can take a number of years before the Commission reaches a decision.
- Even after equivalence is granted, individual firms might still have to apply to the relevant EU authority for recognition.
Put briefly, operating under equivalence is far less beneficial than having a financial passport. It is fragmented, case-by-case, legally uncertain and often limited in time.
Does Canada already benefit from equivalence?
The good news for exporters is that the Commission has recognized Canada as equivalent to the EU in numerous fields. As of 19 August 2019, Canada benefits from EU equivalence in 18 specific areas, including bank exposures and central counterparties. Effective August 2019 the EU repealed the equivalence decision for Canada relating to credit rating agencies.
The Commission has provided a full list of applicable equivalence decisions. Exporters uncertain about the precise extent of their rights to provide cross-border financial services in the EU/EEA are advised to contact the European supervisory authorities (see Section I above).
If you have questions relating to equivalence for auditors and accountants, please consult Chapter 6 of this guide.
II.3 Option 3: operating under an individual national license
If you are neither established in EU/EEA nor have an equivalence decision in your favor, your only remaining option is to provide financial services within individual Member States under the relevant national laws.
Providing financial services within an EU member state requires obtaining an authorization or “license” from the supervisory authority of that member state. In addition, for some areas—notably banking services such as crediting, deposit taking and bank guarantees—you may be required under the relevant national law to be incorporated within that member state as a precondition for obtaining a license.
Key national authorities with more information about obtaining an authorization from the supervisory authority of a member state:
- German Federal Financial Supervisory Authority - Authorization of banks, financial services providers, and payment and e-money institutions
- French Prudential Supervision and Resolution Authority - Licensing, authorization and registration
Such licenses, however, will not entitle you to do business with customers situated in another EU/EEA state. To do so, you would have to seek a potential license from the authority of the State where the customer is located.
For this reason, providing financial services across more than one EU/EEA country without either a financial passport or equivalence can be costly and time-consuming.
See the full list of national financial supervisors and their websites containing the applicable procedure for authorization and licensing. The supervisory arm of the European Central Bank directly supervises “significant” banks and indirectly (through collaboration with national supervisory authorities) supervises other banks. See also the European Banking Authority.
What is the best option for you?
If you are a Canadian firm planning to export financial products and services to the European Union, we recommend you ask yourself these key questions:
- Do I intend to provide the service to a customer in just one EU member state, or to customers in more than one?
- Is the existing group of equivalence decisions in Canada’s favor sufficient for my situation?
- Is it commercially desirable or feasible for me to consider establishing a registered office in the EU in order to reap the benefits of the financial passport?
Your answers to these questions will help you determine your preferred course of action.
III. EU rules for banking and credit
Once you have decided on the best way to access the EU market, you will next have to acquaint yourself with the core rules and regulations that may apply to you. This section deals with the vital dos and don’ts of the European banking sector.
For providers of consumer credit, EU rules require the lender to provide the consumer with a “European Standardized Information Sheet” allowing for easy comparison between different offers, and must also disclose the Annual Percentage Rate of charge (APR). In addition, the consumer can cancel the agreement within 14 days of signing, and may repay the loan or credit at any time.
Similar rules apply concerning mortgage credit. Lenders must assess the creditworthiness of consumers according to common EU standards.
III.2 Deposit guarantees
The EU regulates Deposit Guarantee Schemes (DGS), which are intended to ensure a certain level of compensation for depositors whose bank has failed. A fundamental principle underlying DGS in Europe is that they are funded entirely by banks, without any use of taxpayer funds.
All EU Member States are obliged to set up a DGS, and all EU-established banks (including branches) are required to join them.
- Savings deposited by individuals or companies (whatever their size) are guaranteed up to €100,000, and repayment deadlines (currently 15 days) will be reduced to seven days by 2024.
If you are a bank with its head office outside the EU but you operate a branch established in the EU, Member States must check whether or not your bank has depositor protection equivalent to the EU scheme. In the absence of equivalent protection, the relevant member state may oblige your branch to join a local DGS.
Note November 2020:
Unless otherwise noted, information in this Guide is current as of the time of writing. Readers should be aware that the period is one of considerable change in the regulatory framework. Contributing factors include:
- Brexit: As of early November 2020, the shape of the future relationship agreement (if any) between the EU and UK remains subject to negotiation. With respect to financial services, the UK’s access to the EU will be dramatically different regardless of agreement reached as passporting (described above) will cease on December 31, 2020. Equivalence findings by the EU of the UK and vice versa have not yet been made.
- Covid-19: Many temporary measures have been taken to respond to the socio-economic effects of the pandemic. These include multiple measures by supervisory authorities and regulators to facilitate lending to the real economy, such as relaxation of capital requirements. These measures have different end dates, mostly in 2021, but may be extended.
- Financial legislation reviews: Many of the pieces of financial legislation will be subject to reviews in the next two years which are anticipated to result in amendments.
III.3 Capital requirements
EU-established banks have to hold a total amount of capital corresponding to at least 8% of their assets measured according to their risks. The riskier the assets held (e.g. loans to other institutions), the more capital the bank must hold
Two different “liquidity buffers” are in place: a liquidity coverage ratio to guarantee that banks have sufficient short-term liquidity, and a net stable funding requirement to ensure that banks have an acceptable amount of stable funding to support their assets and activities in the medium term.
Banks have to disclose publicly their leverage ratio, an instrument that aims to limit institutions from incurring excessive debts. A leverage ratio of 3% is required from 28 June 2021. There are detailed regulations on how this is calculated.
Bonuses cannot exceed the member’s annual fixed pay, unless shareholders decide, subject to conditions, to allow bonuses up to twice the fixed pay.
III.4 Credit rating agencies
Agencies that provide independent opinions regarding the creditworthiness of a financial institution, debt or financial instrument are subject to a rigorous supervisory regime in the EU, especially in view of the fact that many credit rating agencies (CRAs) are established outside the Union.
- CRAs operating within the EU must be registered by the European Securities and Markets Authority (ESMA).
- In order to obtain registration, CRAs must have:
- no conflicts of interest (e.g. rating an entity in which they possess a holding)
- ensure the quality of their ratings and rating methods
- publish an annual transparency report
- Ratings cannot be published until EU stock exchanges have closed and at least one hour before they reopen.
- They must develop a strict schedule for rating EU countries (minimum every six months) and inform investors/EU countries of the facts and assumptions behind each rating.
- If a CRA infringes EU rules either intentionally or through gross negligence causing damage to an investor or issuer, it may be held liable.
Note: Exporters with queries about the rules for capital requirements, lending or deposit guarantees in the EU are advised to contact the European Banking Authority, which operates a Single Rulebook Q&A service.
Note: Canada’s legal and supervisory framework for credit ratings agencies had been assessed as equivalent in 2012 but this status was removed as of 19 August 2019. However, if an EU-registered CRA with which you are affiliated endorses a credit rating you have issued, that rating can be used in the EU provided ESMA is satisfied with the supervisory framework in your country of base (Canada currently qualifies).
More information on the status of third-country CRAs is provided on the ESMA website.
To learn about rules for other services like credit transfers, money transfers, direct debits, card payments and foreign exchange, you are advised to refer to Chapter 3, Section III of this Guide.
IV. EU rules for insurance
According to the European Commission, insurers account for the largest institutional investors in European financial markets, making it a sector ripe with opportunities. You may also wish to look at information on the website of the European Insurance and Occupational Pensions Authority (EIOPA). If you are providing (or intending to provide) insurance services in the European Union, you should pay attention to two crucial pieces of EU legislation.
IV.1 Insurance and reinsurance activities
Directive 2009/138/EC, known as the “Solvency II” regime, imposes a number of duties on non-life insurance, life insurance and reinsurance companies that are either established or wishing to establish themselves within the EU. These duties can be summed up in three categories:
Insurance companies must hold capital based on risk profiles to ensure that they have sufficient financial resources to weather financial difficulties. They must respect both a minimum capital requirement and a solvency capital requirement, the latter being calculated based on market risk and operational risk.
Insurance companies must have in place a transparent and satisfactory governance framework, with the capacity to carry out their own risk management, compliance checks and internal audits.
Authorization & supervision
In order to be able to conduct activities across the EU, an insurance company must have an authorization from the supervisory authority of the member state where it is based. In addition, every insurance group (i.e. a company with entities providing services in one or more EU Member States) must appoint a group supervisor.
Under Solvency II, equivalence is available in three areas
- Contracts entered into by reinsurers in a jurisdiction considered equivalent to the EU can be treated in the same way as contracts entered into with EU/EEA insurers
- For the solvency calculation (see above), third-country subsidiaries of EU/EEA-based groups can rely on local capital requirements
- Concerning group supervision, EU authorities may rely on group supervision carried out in a third country for EU/EEA firms having a parent company located in that third country
At present, Canada has obtained equivalence only with respect to the solvency calculation. Learn more about Canada’s decision to obtain equivalence only with respect to the solvency calculation.
IV.2 Insurance distribution
Under the EU Directive 2016/97/EU, any natural or legal person who is established in an EU/EEA member state (or who wishes to be established there) in order to distribute insurance and reinsurance products must ensure that any consumers or retail investors buying such products have:
- greater transparency in terms of the price and costs of the insurance product being offered
- comprehensible information to help make an informed decision, via an Insurance Product Information Document (IPID) for non-life insurance products
- the option of buying a principal good or service without the insurance policy that may be “packaged” within it (e.g. when a car is sold together with motor insurance)
In addition, operators selling life insurance products with investment elements (e.g. unit-linked life insurance contracts) have to ensure that the product is suitable with regard to the customer’s financial situation and experience in the investment field.
These rules apply not only for products purchased via intermediaries (e.g. agents or brokers), but also those bought directly from an insurance company.
The Insurance Distribution Directive does not envisage an equivalence regime. Therefore, any Canadian firms or persons not established in the EU/EEA but intending to provide insurance services to EU/EEA customers are strongly advised to contact the supervisory authority of the member state in which the customer is located.
V. EU rules for financial markets
In the non-banking sectors of financial services, the EU has enacted a complex set of regulations. Below we summarize the key rules in three areas: securities, investment funds and post-trading. You may also wish to review information available on the website of the European Securities and Markets Authority (ESMA).
Market in financial instruments
Ensuring investor protection and increasing transparency in financial markets is the primary of focus of the EU’s Markets in Financial Instruments (MiFID II) regime (Directive 2014/65/EU). It’s important to note that:
- An Organized Trading Facility (OTF) has been set up to capture as many unregulated trades as possible. This OTF exists alongside the traditional trading platforms
- Speculation on commodities is restricted by limits, which national supervisory authorities can set, on the positions you may hold in commodity derivatives
- Depending on the type of financial instrument, market participants may have to publish information regarding the prices of their financial instruments
- For market abuse practices (e.g. manipulation of benchmarks, insider dealing, unlawful disclosure of non-public information), fines can be as high as €15 million or 15% of a company’s annual turnover, and as high as €5 million for individuals
If you have no branch in the EU, the MiFID II equivalence regime can entitle you to provide cross-border services in financial markets, but only with respect to eligible counter-parties and per se professional clients. In addition, you have to register with ESMA and a cooperation agreement on this topic must be in place between Canada and the EU.
For retail clients and opted-up professional clients, there is no similar regime under MiFID: you will have to respect the rules of the individual member state(s) in which you are providing the service.
On the other hand, if you provide services at the own exclusive initiative of a person established in the EU (and if you did not solicit that client or carry out any promotion/advertising of investment services within the EU), then your service will not be considered to be provided within the territory of the EU (and thus outside the scope of MiFID II).
As of January 1, 2019, the EU began applying a new legal framework to provide for a safer and more liquid market for securitization. This is viewed as an important step toward boosting the EU’s relatively under-developed and still-in-progress Capital Markets Union.
Originators, sponsors or lenders of exposures are obliged to comply with risk retention requirements (minimum 5%), even if the investors are not established in the EU.
Originators, sponsors and securitization special purpose entities (SSPEs) are required to disclose detailed information, including loan level data, all transaction documents and prospectuses.
Institutional investors (e.g. credit institutions, investment firms, pension funds) must carry out due diligence assessments prior to holding a securitization position
Short-selling & credit default swaps
The EU’s Regulation 236/2012 prohibits “naked” short selling of sovereign debt (i.e. shares and loans issued by governments) as well as “naked” credit default swaps (i.e. situations where the seller has not even borrowed the financial product in the first place).
Financial institutions also must disclose certain short selling transactions to banking supervisory authorities, while larger transactions above a certain threshold must be publicly disclosed to the markets.
The equivalence regime provides that transactions by third-country operators due to “market-making activities” may be exempted from disclosure and restriction requirements. However, no decisions have been adopted yet.
As of July 21, 2019, if you are a third-country issuer seeking to offer securities to the public within the EU or seek admission to trading of securities on an EU regulated market:
- You must obtain approval of your prospectus from the supervisory authority of your “home member state” (i.e. the country where you intend to issue the security)
- Once approved, you will be subject to all the rights and obligations of the EU Prospectus Regulation 2017/1129, notably the compulsory production of a prospectus for any capital raised over €8 million, and all the information that must be contained in the document to help the investor make an informed decision (assets, liabilities, profits, losses, financial position, etc.).
Note: Under the Regulation, it will be possible for the Commission to recognize the equivalence of prospectuses drawn up under Canadian law.
V.2 Investment funds
Undertakings for Collective Investment in Transferable Securities (UCITS)
UCITS refers to investment vehicles that pool investors’ capital and invest that capital collectively through a portfolio of financial instruments (e.g. stocks and bonds). Under the EU’s UCITS Directive:
- Managers of such funds established in the EU/EEA are obliged to facilitate the consumer’s understanding of products via a standardized summary information document
- The asset-keeping entity also must respect obligations regarding safekeeping of assets and ensure that UCITS investments are consistent with their investment strategies
While it is possible for EU-established players to obtain a financial passport for UCITS, there is unfortunately no equivalence regime envisaged under the Directive. Canadian firms with no office in the EU will therefore have to operate under the national regime of the relevant member state.
For more information about EU financial services see the full list of national financial supervisors and their websites.
Alternative Investment Fund Managers (AIFMs)
If you are an AIFM managing an EU alternative fund (e.g. a hedge fund or private equity), or even marketing a non-EU fund within the EU, you are required, inter alia, to:
- Obtain authorizationfrom the competent authority of your “home EU country”
- To get authorization, you must hold a minimum level of capital in the form of liquid or short-term assets
- Appoint an independent depositary (e.g. a bank or investment firm) that is responsible for overseeing the fund’s activities and ensuring that the fund’s assets are appropriately protected
- Disclose to competent authorities on a regular basis the main markets and instruments in which you trade, their principal exposures and their concentrations of risk, as well as provide an annual report to investors upon request
As a non-EU/EEA manager, there may be a possibility of obtaining passport rights in the future provided you are authorized in the “EEA member state of reference” and you appoint a legal representative in that state. ESMA carried out an assessment in 2015 and 2016 with respect to activating the passport available under the Alternative Investment Fund Managers Directive (AIFMD) for twelve non-EU jurisdictions (including Canada) and concluded there were no significant obstacles to the extension. However, ESMA’s assessment is advisory only and to be realized requires action by the European Commission and EU-level co-legislators (Council, European Parliament), including assessment of additional factors not under ESMA’s purview. As of June 2020, the passport available under AIFMD had not been extended to non-EU jurisdictions.
Consequently, for the time being, you can only market AIFs based on “national private placement rules” under individual member state regimes. The downside is that private placement rules differ considerably across Member States, making the EU a challenging environment to market non-EU AIFs. You should contact the relevant member state authority to obtain more information.
Retail investment products
Instruments known as packaged retail investment and insurance-based investment products (PRIIPs) make up a market in Europe worth up to €10 trillion.
However, due to concerns about complexity and a lack of transparency in such products, the EU obliges those who produce or sell PRIIPs to provide investors with a key information document, which must include the name of the product, the identity of the producer, the risk-and-reward profile, the costs to be borne by the investor(s), and various other important details.
All PRIIP manufacturers and persons selling PRIIPs are covered by these rules if they make the product available to retail investors within the territory of the EU, even if they are based in a third country.
Derivatives and central counterparties
The EU Regulation 648/2012 on Market Infrastructure (known as “EMIR”) lays down rules for the clearing of over-the-counter derivatives (OTCs) and the functioning and governance of central counterparties (CCPs).
- Standard derivative contracts must be cleared through CCPs
- Non-cleared derivatives must respect so-called “risk mitigation techniques”
- All information on all European derivative contracts must be reported to trade repositories and made accessible to European supervisory authorities
- These obligations on clearing and reporting apply not only to financial firms (e.g. banks) but also to non-financial firms (e.g. energy companies or airlines that have large holdings in OTC derivatives)
Under certain conditions, the clearing obligation may also apply to third-country counterparties including when EU counterparties trade with entities established outside the EU, or where an impact on EU markets exists (“a direct, substantial and foreseeable effect”).
Under the EMIR equivalence regime, Canadian CCPs have been recognized by ESMA as entitled to provide clearing services to clearing members within the EU/EEA. For more information, see the full EU Commission Implementing Decision.
Learn more about the rules for OTCs derivatives and CCPs in Europe on the ESMA website.
Central securities depositaries (CSDs)
Any transaction in securities must be followed by a post-trade flow of processes leading to the settlement of the trade (i.e. the delivery of securities to the buyer against the delivery of cash to the seller). CSDs are intended to provide the infrastructure to enable such settlement systems.
The EU’s Regulation 909/2014 aims to boost the safety and efficiency of CSDs by stipulating settlement periods, the prudential requirements of CSDs and cash penalties for settlement failures.
As for equivalence, a third-country CSD is entitled to provide services within the EU/EEA as long as it sets up a local branch. If intending to provide “core services”, then recognition from ESMA will be necessary.
VI. Financial technology (Fintech)
More and more companies are using technology-based systems to provide innovative and cheaper financial services, or make traditional financial services more efficient. The financial technology sector, more commonly called “fintech”, is a dynamic and rapidly growing area of the economy. It is estimated that investments in European fintech firms reached US$26 billion in the first six months of 2018.
As Member State laws on key fintech areas (e.g. digital currency, peer-to-peer lending) have traditionally been quite fragmented, the EU is making efforts to encourage greater harmonization and coordination in this domain so that innovative economic players are in a position to deliver (or facilitate the delivery of) financial services throughout the EU market.
In particular, the European Commission put forward in 2018 a proposal to boost crowdfunding and enable platforms to provide their services across the EU on the basis of a common set of standards. Regulation 2020/1503 resulting from the proposal will apply from 10 November 2021, opening up this underdeveloped market to new funding opportunities for entrepreneurs, start-ups and small enterprises within the EU. You can find out more about the proposal and the Regulation.
Exporters may also be interested to read the Commission’s 2018 Fintech Action Plan, which presents 19 steps aimed at promoting innovative business models and uptake of new technologies (e.g. blockchain, cloud services, artificial intelligence) while at the same time boosting cybersecurity and data protection for consumers and investors. The Digital Finance package released by the Commission on 24 September 2020 might also be of interest. It includes an updated digital finance strategy, a legislative proposal on crypto-assets, a legislative proposal on digital operational resilience, and a retail payments strategy.
Tips for Smart Compliance
You may be especially interested in the concept of “regulatory sandboxes”, where national supervisory authorities can apply rules to fintech companies in a more flexible way, thereby allowing businesses to test their models, products and services without exposure to red tape.
To get a better idea of how these regulatory sandboxes work, we recommend you have a look at the website of the UK Financial Conduct Authority (although note the UK is no longer part of the EU). At the time of writing, only five EU Member States have fully operational sandboxes: the UK, the Netherlands, Poland, Lithuania and Denmark. Furthermore, 21 Member States have set up “innovation hubs”—dedicated points of contact for firms to raise inquiries with competent authorities on fintech-related issues and seek non-binding guidance.
Note: Any readers providing technology in the field of financial services are encouraged to read Chapter 4 on Digital Services.
VII. Impact of CETA on financial services
Chapter 13 of CETA contains several provisions with mutual commitments by the EU and Canada to open up their markets for a wide variety of financial services, including insurance, banking, securities, money broking, asset management and clearing services.
The key principles set down in CETA
The EU must treat Canadian investors, financial institutions and their investments no less favourably than its own investors and investments.
Most favoured nation
The EU must treat Canadian investors, financial institutions and their investments no less favourably than it treats investors and investments from other third countries.
The EU cannot impose limitations on the number of Canadian financial institutions, total value of transactions/assets, participation of capital and number of persons that may be employed, nor can the EU restrict or stipulate the type of joint venture that must be used for economic activity.
The EU cannot require a Canadian financial institution to have persons of any particular nationality on its senior management or board of directors.
Note: Exporters should keep in mind that these principles are subject to the legislative and regulatory requirements (including the limitations) of EU law set out in the previous sections. Moreover, CETA envisages numerous exceptions and derogations from these general principles. For example, pensions and social security are excluded from the Agreement, and both the EU and Canada are entitled to take prudential measures to protect the integrity and stability of their financial systems.
Chapter 6: Regulated Professions and Qualifications
In the EU, it is up to each member state to define the applicable rules for regulated professions and qualifications. Access to and exercise of those professions is therefore different from one country to another, as is the recognition of foreign professions and qualifications, including those obtained in Canada.
How do you find out which rules apply for which profession, in a specific country? Which competent authority regulates a specific profession? Do you need to apply for a formal recognition of your qualifications? This chapter guides you through the European patchwork of regulated professions and qualifications.
I. Regulated professions and qualifications in the EU
A regulated profession is a profession for which the access and exercise is regulated by legal or administrative provisions, specific professional or academic qualifications, or minimum training requirements.
Regulated professions are often associated with the use of protected titles, such as “doctor of medicine”, “engineer”, “architect” or “accountant”, to name only a few. Sometimes a regulated profession is also linked to membership in a dedicated association, a professional order or a supervisory body, such as lawyers (bar associations) and engineers (councils, associations).
In the EU, it is up to each member state to determine the conditions of access to a regulated profession and to ensure the proper use of professional titles and exercise of such professions in its territory.
How do I know whether a profession is regulated in Europe, and under which rules?
Regulated professions in Europe are diverse and numerous. They also differ from one member state to another. To verify whether a specific profession is regulated in a specific EU country, please use the European Commission’s Database of Regulated Professions.
The database includes all relevant information about the status of each regulated profession in each EU country, the applicable national rules, the relevant national authority or professional association that regulates access to and exercise of the profession, and your contact point for further information.
Please use in particular the following tools:
- Interactive map of regulated professions (by country)
- The generic list of professions (by profession)
- The list of competent authorities (by country and profession)
Example: finding the status, applicable legislation and competent authorities for architects in Austria
- Step 1: Open the interactive map from the European Commission’s Database of Regulated Professions, click on “Type of regulation by profession”
- Step 2: Select the profession “Architect”, then select “Austria” on the map
- Step 3: You will find all relevant EU and national rules on architects in Austria, as well as the competent national authorities and contact persons:
- Applicable EU law (Directive 2005/36 on regulated professions)
- Applicable legislation in Austria (Ziviltechnikergesetz 1993 - ZTG, BGBl.Nr. 156/1994)
- Austrian regulatory authority (federal ministry for digital and economic affairs)
- Contact data of your point of call in Austria and further information resources (websites of the national administration, email address and phone number, contact forms, etc.)
Source: European Commission’s Regulated Professions Database
More information about regulated professions and qualifications in the EU
- European Commission – List of national authorities providing information and administrative guidance on regulated professions and qualifications
- European Commission – List of national websites on regulated professions
II. Recognition of professions and qualifications between Canada and the EU
II.1 Do you need to apply for recognition?
In the EU, the EEA and Switzerland, the recognition of professions, professional titles and qualifications obtained in another country is a competence exercised by the national administrations of each country. The Professional Qualifications Directive 2005/36 (PQD) has put in place a simplified recognition regime that only applies to EU/EEA and Swiss nationals; it does not apply to those who do not hold the citizenship of one of these countries.
As a Canadian professional, you need to consider whether you need to apply for a formal recognition of your profession, you professional title or your qualifications in Europe. If you fulfill at leas one of the three criteria below, then you must apply for formal recognition.
Criteria needed to apply for recognition of profession, professional title or qualifications
Note: this is a non-exhaustive list and only provides as examples of typical situations
|Your situation||Typical scenario|
|You want to establish your business in the EU/EEA, or you want to work in a company based in those countries||E.g. You are a Canadian architect and you want to open an office in Europe. You are a Canadian engineer and you want to be employed in a European company.|
|Your EU/EEA-based customers require official proof of recognition of your qualifications and experience||E.g. You are a Canadian architect or engineer and you want to respond to a call for proposal by a public or a private body in the EU/EEA that requires such proof. You want to participate in an academic or research project that requires such proof.|
|The practice of your services in the EU/EEA is regulated or requires official licensing, regardless of your place of residence or business establishment||E.g. You are a Canadian accountant or statutory auditor and you want to certify the accounts of your European clients. You are a Canadian lawyer and you want to give advice to your clients in an EU/EEA jurisdiction.|
More information about applying for recognition
- Professional Qualifications Directive (Directive 2005/36) on the recognition of professional qualifications between EU/EEA/Swiss nationals: general rules, not applicable to non EU/EEA nationals—please refer to the relevant national legislation
- Statutory audits (Directive 2006/43): specific rules for auditors, applicable to a certain extent to non EU/EEA nationals: registration in the national public register is mandatory and subject to a level of regulation equivalent to the minimum required for EU/EEA auditors
- Directive 77/249 and Directive 98/5 on lawyers: specific rules for lawyers, not applicable to non EU/EEA nationals—please refer to the relevant national legislation (in general, non-EU lawyers must register with the bar council of the host EU country; in some countries such as France the procedure also includes a knowledge examination for the applicant)
II.2 Mutual recognition agreements
Non-CETA MRAs: limited to a specific EU/EEA country
In order to facilitate the evaluation and recognition process of foreign qualifications, EU countries can adopt Mutual Recognition Agreements (MRAs) for specific professions with Canada or Canadian provinces. Please note that the existence of an MRA does not automatically confer the right to exercise a specific profession in the country concerned; however, it does accelerate the recognition process with the competent national authorities in the host country.
For example, the Québec-France Agreement on the mutual recognition of professional qualifications was ratified in 2008 between the Province of Quebec and France. Under this agreement, a number of qualifications are recognized as equivalent, hence facilitating the international transfer of professionals.
To find out whether an MRA covers a specific profession, qualification and country or province, please refer to the Canadian Information Centre for International Credentials (CICIC). CICIC is Canada’s member of the ENIC network (European Network of Information Centers) and provides information to individuals and organizations on foreign professional and qualification systems.
Source: CICIC website
CETA MRAs: applicable to all EU countries
CETA (Art. 11.3) has put in place a framework for the negotiation of EU-wide MRAs with Canada. Should this framework result in an MRA being successfully negotiated and adopted under CETA, Canadian professionals could enjoy recognition throughout all EU countries by the competent national authorities. The CETA negotiation process for MRAs is as follows:
1 - Proposal for an MRA
The competent regulatory authorities of both Canada and the EU, or professional bodies or federations, develop joint recommendations on a proposed MRA for a specific profession or qualification. These joint recommendations must include at least an assessment of the potential value of an MRA, industry needs and business opportunities, expected gains and compatibility of the licensing and qualification regimes.
2 - Negotiation
The MRA Committee (Article 11.3, Chapter 11 of the CETA) reviews the joint recommendation and establishes the negotiation process. The MRA Committee is co-chaired by representatives of Canada and the EU (civil servants), different from the competent regulatory authorities or professional bodies.
3 - Adoption
Once negotiations are complete, the MRA Committee reviews the draft MRA for consistency with the terms of CETA. If it is consistent, the Committee may adopt the MRA, which would become applicable and binding on the whole territory of Canada and the EU. Professionals from both sides of the Atlantic can therefore apply for recognition of their profession and qualifications via the national regulatory authorities of each country and should be granted recognition if they fulfill the requirements of the MRA.
More information about CETA MRAs
- CETA Treaty, Chapter 11, Mutual recognition of professional qualifications (Art. 11.1 to 11.7)
- Architects’ Council of Europe, Press release April 23, 2018—The Architects’ Council of Europe signs an agreement with the Canadian Architectural Licensing Authority to facilitate the mobility of architects between the EU and Canada (negotiated text)
II.3 How to apply for recognition?
If you need formal recognition of your profession, professional title or qualifications in one of the EU/EEA countries, please refer to the following steps:
Step 1: Verify whether the access to the profession, exercise or title is regulated in the relevant EU/EEA country
The European Commission’s Database of Regulated Professions covers all regulated professions in Europe, including the applicable EU and national legislation, the competent regulatory authorities or professional associations, and the contact persons to apply to for recognition.
Step 2: Verify whether your profession or qualification is covered
MRAs facilitate the international recognition of professions and qualifications and avoid the need to undertake a full verification procedure by the competent national regulatory authorities.
You may check whether you are covered by an existing MRA on the website of the Canadian Information Centre for International Credentials, or via your professional association or competent local authority in Canada, or via the ENIC network (European Network of Information Centers).EEA country
Step 3: Contact the competent national regulatory authority of the relevant EU/EEA country to apply for recognition of your profession or qualifications
If there is an existing MRA between Canada and the concerned EU/EEA country, it is very likely that you will obtain recognition as a simple administrative formality. In the absence of an MRA, recognition will be subject to an in-depth verification of your professional experience and qualifications by the competent regulatory authorities.
Chapter 7: Intellectual Property
When you are a producer or exporter of services, one of your priorities will be ensuring that your inventions or creations are not used in a way that unduly diminishes their commercial value. For this purpose, Intellectual Property Rights (IPR) are crucial.
The main types of intellectual property consist of:
- Copyright and related rights
- Geographical indications
- Industrial designs
- Trade secrets
The EU and its Member States adhere to major intellectual property agreements administered by the World Intellectual Property Organization (WIPO) and to the WTO TRIPS Agreement. The EU itself has adopted a range of legislation aimed at protecting IPR against infringing or unlawful use.
In the EU, there are two bodies with importance for IPR:
- The European Patent Office (EPO), which grants patents
- The European Union Intellectual Property Office (EUIPO), the EU agency responsible for the registration of trademarks, designs and industrial designs.
Given the distinction between goods and services, exporters should note that the IP rights available to the owner of a good are not necessarily the same as those available to the owner/originator of a service being exported to the European Union. We provide some clarification below.
I. Your IP strategy for Europe
Make sure you protect your intellectual property before entering the EU market by seeking professional advice. It is important to recall that intellectual property rights are territorial rights. For example, by registering your trademark in Canada, you obtain protection only in Canada, not in Europe.
If you are considering exporting your services to the EU, it is recommended that you seek professional advice to protect your intellectual property rights in Europe. See in particular the guide on Intellectual Property for Exporting Businesses and Doing Business Abroad: Protecting your IP in the European Union on the Canadian Intellectual Property Office (CIPO) website.
The CIPO manages a list of registered IP agents for patents and trademarks in Canada. Many of them have associate firms in Europe.
The Canadian Trade Commissioner Service can also provide you with a contact list of qualified IP professionals in your markets of interest.
Please note that this chapter does not constitute legal advice. It is simply an introduction to steps you can take to register your IPR in Europe.
The services you export to the EU may incorporate original creative material that you wish to safeguard against unauthorized reproduction or distribution. This is the goal of copyright, which provides protection to a range of original material such as music, theater, literary works and computer programs.
II.1 Copyright in Europe: The basics
Copyright rules at the EU and national level are informed by, and to some extend exceed, current international norms:
- Literary, artistic, dramatic and musical works: the term of protection is 70 years from the death of the author (i.e. creator of the work)
- Sound recordings, protection for performers and producers: the term of protection lasts 70 years from the first publication or communication to the public or for 50 years from the moment of performance or fixation, if not published or communicated
- Authors and other rights-holders(e.g. producers or performers): exclusive rights to authorize or prohibit the reproduction, distribution or communication (including via satellite broadcast) to the public of any of their works
- Directors and producers of films also have the right to authorize or prohibit the rental or lending of originals and copies of copyrighted works. However, individual EU countries can dispense with the lending right as long as they compensate the creator.
Can I register my copyright in Europe?
Remember that copyright is automatic: It comes into effect as soon as the work is created.
There is no general system of copyright registration at European Union level, although certain individual EU Member States have put in place their own registration systems. While purely voluntary, such systems can be helpful in the event of dispute as they show evidence of the date of creation and presumption of ownership.
More information on national copyright registration in specific countries, and how to register, can be found on the following sites:
- France: CopyrightDepot
- Spain: Registro de la Propiedad Intelectual
- Portugal: Inspeção Geral das Atividades Culturais
II.2 Copyright in the digital world
The centrality of the Internet in our modern era presents massive commercial opportunities to distribute original digital material to millions via multimedia platforms and streaming services. At the same time, the rise in digitalization leaves such material vulnerable to unauthorized or illicit use. Therefore, the EU is making great efforts to stay in step with these technological developments by adopting and modernizing intellectual property laws.
The revised Directive on Copyrights in the Digital Single Market and the Directive on television and radio programmes, agreed to in 2019, will take effect in May 2021. These revised directives aim to create a fairer online environment for creators and the press, notably with a reinforced position of creators to negotiate and be remunerated for the online exploitation of their content, a new right for press publishers in relation to the use of their content by online service providers and transparency rules for the remuneration of authors and performers.
Impact on online platforms
The revised directives introduce rights and responsibilities of large online platforms such as Google, which will now have to:
- negotiate licensing agreements with rights-holders (including record companies, collecting societies and media companies) before publishing their content
- scan their systems and make best efforts to remove any protected content uploaded without the rights-holder’s authorization
That being said, companies less than three years old with an annual turnover of under €10 million and a monthly audience of under five million will be exempt from these enhanced monitoring obligations.
If you are intending to operate an online platform in Europe, be sure to verify whether or not the rules are applicable to you!
Digital copyright rules in place at the EU and national level
EU countries are obliged to protect a computer program as a literary work, provided it is the author’s own intellectual creation. This protection applies to the expression of a computer program in any form, but not the ideas and principles underlying it.
Like with other literary works, the rights-holder (which may be a person, group of persons or company) can authorize or prohibit the reproduction, distribution, translation or alteration of the computer program.
If you create an electronic database online, you have exclusive rights to authorize or prohibit the reproduction, alteration and distribution of that database.
If you have invested in the creation of an electronic database, you can prevent the unauthorized retrieval or reuse of its contents.
Note: that if you are not established in the EU, you can benefit from this right only if Canada is considered to offer comparable protection for databases in its own jurisdiction.
Online licensing of music
Collective management organizations that manage copyright and collect royalties on behalf of authors can now grant EU-wide licensing to service providers who make music available via their online platforms.
Note: individual EU countries can decide to extend these rules to collective management organizations established outside the EU but operating in that EU country.
Since April 2018, European customers who are subscribed to an online content service for films, sports events, eBooks, video games and music (e.g. Netflix, Spotify) have the right to continue accessing that content even when temporarily staying in another EU country.
The content provider must verify reasonably and effectively the subscriber’s EU country of residence. The quality of the service must not be deliberately reduced when the subscriber is in the other EU country.
More information about copyright in the digital world
Trademarks are signs such as words, phrases, logos or sounds that are used by companies to identify products or services, and to distinguish their products and services from those of their competitors.
Three routes to register a trademark for your service
If you want protection in only one EU member state, it makes sense to submit an application directly to the competent national intellectual property office.
If you are seeking protection in Belgium, the Netherlands and Luxembourg (known collectively by the acronym Benelux), you may apply to a regional authority known as the Benelux Office for Intellectual Property (BOIP).
If seeking trademark protection in all or several EU Member States, you are well advised to apply for an EU trademark from the European Union Intellectual Property Office (EUIPO).
There are obvious benefits to taking the European route: your application can be filed online in one language for a cost of €850 ($1,274), leading to 10-year trademark protection, which you can renew indefinitely and is valid in all EU Member States.
The EU is also a member of the Madrid Protocol for the International Registration of Marks (Madrid Protocol) as administered by WIPO. The Madrid Protocol offers businesses the opportunity to obtain trademark protection in a number of countries by filing a single international application in one language with WIPO. One overall payment is made in one currency, simplifying the application process and providing financial savings for those seeking to obtain and maintain protection for their trademarks internationally.
On June 17, 2019, the Madrid Protocol came into force in Canada. The EU trademark system and the Madrid system are interlinked. As such, it is now possible in Canada to designate the EU in an international application through the Madrid system. It is important to note that applicants cannot file an application for international registration without first having filed a trademark application or obtained a trademark registration in Canada since a basic application or registration is required as a first step (referred to as a basic application or a basic registration).
It is useful to note that the EU also maintains a database of geographical indications that may conflict with trademarks and could result in your mark not being registered. At the EU level, Geographical Indications (GIs) are often used on wines and spirits, and foodstuffs that identify a product as originating in a particular place and having a quality, reputation, or other characteristic, attributable with that place. In Europe, well-known examples of Geographical Indications include “Roquefort cheese” or “Champagne”.
Exporters considering obtaining trademark protection in the EU are advised to check this database to make sure there is no conflict with an existing GI.
Filing a trademark in Europe
For EU trademarks, visit the page How to apply for a European Union Trade Mark via the European Union Intellectual Property Office (EUIPO). The EUIPO operates a five-step application process that is inexpensive, efficient and easy to understand.
A full list of EU’s intellectual property national and regional trademark offices.
A patent is a legal title that can be granted for any invention having a technical character provided that:
- it is new
- it involves an inventive step
- it can be used in an industrial application
Patents offer protection for 20 years, during which the invention cannot be made, used, distributed, imported, or sold by others without the patent owner’s consent.
IV.1 What can be patented?
Exporters should be aware that certain subject matter is excluded from the possibility of patentability in Europe, including schemes, rules and methods for performing mental acts, playing games or doing business, surgical and therapeutic procedures, diagnostic methods and new plant or animal varieties.
As a result, there may be services that meet the strict definition of an invention but that are excluded for other reasons.
In principle, programs for computers are also excluded from patentability, since program listings are considered more appropriately protected by copyright. However, you could patent a computer program if it has a “technical character”, e.g. involving the control of a technical process or of the internal functioning of the computer itself or its interfaces.
To find out more about obtaining patents for “computer-implemented inventions”, we recommend you read the guidelines for examination provided on the EPO website.
IV.2 How can you obtain a patent?
At the moment, you can protect your inventions in Europe in one of two ways:
- National patents, granted by national patent offices
- European patents granted centrally by the European Patent Office (EPO)
- One single application can be filed for all EPO member countries where protection is sought
- The European patent has the effect of a national patent in each of the countries designated
Soon it will be possible to apply for a Unitary Patent, which will cover all Member States of the European Union (with the exception of Italy and Spain). The unitary patent will ensure uniform protection for an invention across the EU and is expected to reduce the costs and administrative burden for businesses.
A single patent court, the Unified Patent Court, has been created for EU Member States who have chosen to participate in the unitary patent. The aim is to create more legal certainty by avoiding multiple parallel litigation cases before national courts, which could result in divergent interpretations and rulings.
The unitary patent and the unified patent court are expected to become fully operational at the end of 2020.
More information about patents
The European Patent Office
- How to apply for National and European patents
- The Unitary Patent and Unified Patent Court
Innovaccess, the European Network of National Intellectual Property Offices, provides information on IP issues, including patents, for each EU member state
VI. Industrial Designs
An industrial design protects a product’s unique appearance, not what it is made of, how it is made or how it works. Industrial designs can be found in many everyday products, such as the unique contour of a car hood, the graphical user interface on a phone or the specific shape or pattern of your favourite shoes. Since consumers are often drawn to an eye-catching product, an industrial design can give your product a competitive edge in the marketplace.
In Europe, you can choose to protect your design by registering it with an intellectual property office, or you can commercialize it without registration and rely on the protection of an unregistered community design.
- Unregistered community design: given protection for a period of maximum three years from the date on which the design is first made available to the public within the territory of the European Union
- Registered design: valid for a period of five years, and can be renewed in blocks of five years up to a maximum of 25 years
Both offer the same protection so that no one would be able to manufacture, sell, market, import, export or put on the market a product incorporating the protected design.
Where to apply when registering your design
- National intellectual property office
- File for a registered community design at:
- European intellectual property office
- WIPO’s Hague System
Should you choose to register your design, where to apply will depend on where you want to acquire industrial design protection to support or expand your business. If you do business in a single European Union country, you may want to register your design directly with the intellectual property office of that country. If you do business in multiple European Union countries, you can file for a registered community design, which is valid throughout the entire EU. You can obtain a registered community design by filing either at the European Intellectual Property Office or through WIPO’s Hague System.
The Hague System for the International Registration of Industrial Designs allows applicants to acquire, maintain and manage industrial designs rights in multiple countries through a single application filed with WIPO. Canada’s major trading partners, including the European Union, are members, and Canada has been a member since November 5, 2018.
VII. Trade secrets
When developing innovative products and services, you as a company will often rely on information that gives you a competitive advantage, and therefore you may prefer to treat that information as confidential: this is known as a trade secret. According to the definition of the CIPO, to protect and benefit from a trade secret, your company must:
- obtain business value from the secret
- keep the business information a secret
- take all possible measures to ensure that the information remains a secret
Trade secrets can be particularly important in the case of commercially valuable information, for which there is no IPR protection, but to which you have devoted investment and/or research and that are important to innovation. The scope of trade secrets is broad, and can include, for instance, a new business idea, software, a recipe, a marketing study or a price offered in a bidding procedure.
Misappropriation of trade secrets is a growing risk in the modern economy that requires effective legal mechanisms to enforce rights, particularly for smaller players. In 2016, the EU took action to harmonize trade secret protection across the 27 Member States by adopting the Trade Secrets Directive that provides:
- A harmonized definition of “trade secret” that is in line with international standards
- An elaboration of circumstances when the acquisition of a trade secret with consent of the holder is unlawful, such as when there is a breach of a confidentiality agreement or conduct is contrary to honest commercial practices
- Civil remedies through which a victim of misappropriation can seek redress, e.g. stopping further disclosure, removal of products from the market, obtaining compensation
- Clarification of the limits to trade secret protection, i.e. cases of reverse engineering or independent discovery, the exercise of freedom of expression, whistleblowing activity (whereby disclosure of a trade secret serves the public interest)
The directive does not envisage criminal prosecution or sanctions for misappropriation of a trade secret. However, many EU Member States’ laws provide for criminal remedies for trade secret offences, including through use of a computer, that are established through their criminal law or other laws, such as unfair trade practices law.
Note: The European Commission provides helpful FAQ guidance for those wishing to find out more about trade secret protection in the EU.
A whole chapter of CETA is devoted to the protection of IPR in Canada and the EU, with one of the explicit objectives being to facilitate “the provision of services” between the two parties.
CETA also contains provisions on the enforcement of IPR, including with respect to:
- Obtaining injunctions and seizures of goods suspected of infringing IPR
- Removal and destruction of infringing goods
- Obtaining compensation for IPR infringement (e.g. royalties, damages)
- Strengthened border measures to prevent and detect pirated copyright goods and counterfeit trademark goods (see below for more information)
The CETA provisions on IPR enforcement largely mirror those already set down in EU law.
The European Union’s Directive on the enforcement of IP rights requires all EU countries to apply appropriate remedies and penalties against parties engaged in counterfeiting and piracy.
Under the Directive, all EU countries have similar measures available for IP rights holders to defend their IP rights. IP rights can be defended by asking customs to seize goods suspected of infringing any IP. In order to do so, an “application for action” must be filed with the relevant customs department. Depending on your particular rights, the application for action can be national or EU-wide. Legal proceedings can also be started to enforce your IP rights.
Mediation and arbitration, which are generally more informal, less adversarial, less expensive and settlement-focused, can be used as alternatives to going to court.
For more guidance on how you can enforce your IPR within Europe, including in a digital context, you are advised to consult the relevant European Commission Guidance.
Tips about intellectual property
- IP rights are important—take the time to identify your IP to determine what can be registered and/or enforced
- Align your IP strategy with your business strategy - identify business goals, protectable IP, regional requirements, potential partners and capacity to expand into your target markets
- Routinely monitor the marketplace for any unauthorized use of your IP
- Prior to proceeding with any of the enforcement methods outlined above, consider contacting a qualified legal professional to discuss options, including a “cease and desist” letter
Chapter 8: Government Procurement
The EU government procurement market (known as “public procurement” in EU terminology) is estimated at more than €3.3 trillion per year, or 16% of the EU’s GDP. Government procurement refers to any purchase of goods and services by a governmental entity. Under CETA, the EU has provided greater guaranteed access to its procurement opportunities to Canadian bidders than it had thus far offered to any other trading partner. This means that you now have greater access to the procurement opportunities of national, regional and local EU public authorities, as well as to those of the European institutions. This includes covered contracts from local hospitals, schools, regional governments and utilities in all EU Member States.
Canadian suppliers are encouraged to take advantage of this expanded and preferential market access. You can view contract opportunities and requests for proposals (“tender” and “contract notices” in EU terminology) on the EU’s Tenders Electronic Daily (TED) portal.
When entering European government procurement markets, consider the following questions:
- What are the key rules and principles applicable to European government procurement?
- What has changed for Canadian bidders since CETA?
- Under which conditions does CETA apply to my situation?
- How can I track government procurement opportunities in the EU, and how do I submit my offer?
This chapter is a general introduction to EU government procurement. For more information on procurements in the EU, please refer to the European Union Government Procurement Guide for Canadian Businesses published by Global Affairs Canada.
I. Overview of public procurement rules
I.1 Key rules and principles
The following agreements and directives govern access by Canadian suppliers to government procurement opportunities in the EU.
The revised World Trade Organization Agreement on Government Procurement (GPA)
The GPA sets out general principles and rules ensuring open, fair and transparent conditions of competition in covered government procurement markets. Canada and the EU Member States are parties to the revised GPA, which came into force in 2014. The revised GPA provides Canadian suppliers with guaranteed access to opportunities in the EU’s government procurement markets, primarily for procurements by central government entities, along with some sub-central procurements (see below).
The CETA Chapter on Government Procurement (Chapter 19) and its Annexes
This chapter extends the coverage negotiated under the revised GPA to include access to additional EU procurement opportunities, particularly at the sub-central level (regions, municipalities, hospitals, schools and academic institutions, as well as certain entities in the utilities sector, including water, electricity and gas).
The EU Public Procurement Directives
These directives contain provisions on contracting procedures, selection and award criteria, advertising and transparency. Canadian companies bidding on contracts in the EU are required to follow the same rules as European bidders.
These Directives are the following:
- Directive on public procurement (Directive 2014/24)
- Directive on the co-ordination of procurement procedures of entities operating in the water, energy, transport and postal services sectors (Directive 2014/25)
- Directive on the awarding of concession contracts (Directive 2014/23)
Revised WTO Agreement on Government Procurement & CETA Chapter 19 and Annexes 19-1 to 19-8
- General principles and rules to ensure non-discrimination, transparency, impartiality and accountability in the conduct of covered procurement
- EU market access annexes listing sectors and procurement entities offering guaranteed access to Canadian companies (expanded in CETA)
EU Public Procurement Directives
- Rules of procedure on how to conduct public procurement
II. Does CETA apply to my situation?
As explained above, with the provisional application of CETA, Canadian businesses now have guaranteed access to a wide range of government procurement opportunities in the EU. For procurement opportunities covered by CETA, Canadians get the same access rights as European companies and benefit from the non-discrimination rules of the agreement. This means that they cannot be excluded from a procurement opportunity on nationality or localization grounds.
However, CETA does not apply to all procurement opportunities in the EU. Rather, CETA applies only to procurement opportunities that the EU has agreed to cover under the agreement as part of its market access offer.
That being said, the EU has an open procurement market. Therefore, even though a particular procurement is not covered under CETA, this does not mean that you cannot bid on the contract. Rather, it means that Canadian suppliers would not have access to the guarantees of the CETA for this procurement, such as access to the bid challenge mechanism.
How to determine whether a particular contract is covered under the agreement
Note: This section is an orientation manual regarding the main provisions on government procurement for Canadian businesses included in CETA. For a detailed list of rules and conditions, please refer to CETA Chapter 19 and Annexes 19-1 to 19-8 (Market Access Schedule of the EU) and the European Union Government Procurement Guide for Canadian Businesses published by Global Affairs Canada.
CETA covers a procurement contract if the four conditions below are satisfied
- The procuring entity is covered
- The type of goods, services or construction services concerned are covered
- The procurement meets or exceeds the relevant threshold
- There is no applicable exemption or exception
1) Is the procuring entity covered?
Annexes 19-1 through 19-3 of the EU’s CETA Market Access Schedule contain the lists of entities whose procurements are covered by the Agreement:
- Annex 19-1 lists covered central government entities, such as:
- EU institutions
- national governments
- Annex 19-2 lists covered sub-central government entities, such as regional and municipal authorities.
- Annex 19-3 lists other covered entities, such as utilities providers in the fields of water, energy, transport and postal services.
2) Are the goods, services or construction services covered?
- If you intend to bid on the procurement of goods, please refer to Annex 19-4 of the EU’s CETA Market Access Schedule.
- If you intend to bid on the procurement of services, please refer to Annex 19-5 of the EU’s CETA Market Access Schedule, as well as to the table below. This includes procurement of professional services in the field of architecture, engineering, ICT (including data processing, software implementation and hardware installation), maintenance and repair services, and clean-tech (including technical testing and analysis services).
- If you intend to bid on the procurement of construction services (including “works concessions” in EU terminology), please refer to Annex 19-6 of the EU’s CETA Market Access Schedule.
Services covered by the CETA (Annex 19-5, Market Access Schedule of the EU)
|Services||CPC Reference |
(UN Central Product Classification)
|Repair services of personal and household goods||633|
|Commercial courier services (including multi-modal)||7512|
|Electronic data interchange (EDI) electronic mail enhanced/value-added facsimile services, including store and forward, store and retrieve code and protocol conversion online information and database retrieval voice mail||7523|
|Real estate services on a fee or contract basis||822|
|Consultancy services related to the installation of computer hardware||841|
|Software implementation services, including systems and software consulting services, systems analysis, design, programming and maintenance services||842|
|Data processing services, including processing, tabulation and facilities management services Online information and/or data processing (including transaction processing)||843|
|Maintenance and repair services of office machinery and equipment including computers||845|
|Other computer services||849|
|General management consulting services||86501|
|Marketing management consulting services||86503|
|Human resources management consulting services||86504|
|Production management consulting services||86505|
|Services related to management consulting (except arbitration and conciliation services)||866|
|Integrated engineering services (excluding 86731 Integrated engineering services for transportation infrastructure turnkey projects)||8673|
|Urban planning and landscape architectural services||8674|
|Technical testing and analysis services including quality control and inspection (except with reference to FSC 58 and transportation equipment)||8676|
|Repair services incidental to metal products, machinery and equipment||8861 to 8864, 8866|
|Sewage and refuse disposal, sanitation and similar services||94|
3) Does the value of the procurement meet or exceed the listed threshold?
CETA rules apply to covered procurement contracts with a value equal to or above specific thresholds, as listed in the table below.
|EU institutions (Commission, Council and EESA) + central government bodies in the EU Member States||130 000 SDR|
|130 000 SDR|
|5 000 000 SDR|
|Sub-central entities (regional and local entities) and bodies governed by public law that are hospitals, schools, universities and social-service agencies||200 000 SDR|
|200 000 SDR|
|5 000 000 SDR|
|All other bodies governed by public law||355 000 SDR|
|355 000 SDR|
|5 000 000 SDR|
|Utilities (all entities)||400 000 SDR|
|400 000 SDR|
|5 000 000 SDR|
(*) Approximation – EU Commission to confirm exact number shortly
Source: Global Affairs Canada, European Union Government Procurement Guide for Canadian Businesses
SDR: Special Drawing Rights (IMF unit of account). The value of the SDR thresholds in Euros above is valid until December 31, 2019.
4) Do any exceptions apply?
The EU’s CETA Market Access Schedule contains a number of exceptions to the coverage of the Agreement. For example, some goods are generally covered, but not if procured by certain entities in law enforcement or defence (see Annex 19-4). Annex 19-7 contains general notes regarding coverage, for instance excluding certain EU sectors from CETA provisions. These sectors include:
- agricultural products related to agricultural support programs
- shipbuilding and maintenance
Some other sectors are covered, but with restrictions. For instance, procurements in connection with activities in the fields of drinking water, energy, transport and the postal sector may be restricted for certain entities.
In some cases, the EU and its Member States may reserve access to certain procurements to European suppliers on grounds of:
- protection of human, animal and plant health
- the environment
- national security
- order and safety
- intellectual property
- protection of persons with disabilities
More information about CETA exceptions
- The EU’s CETA Market Access Schedule
- The EU Government Procurement Guide for Canadian Businesses published by Global Affairs Canada
- The European Commission’s online list of exempted procurement markets
III. How can you find public procurement opportunities in Europe?
The EU Government Procurement Guide for Canadian Businesses takes you step-by-step through the bidding process, from the identification of opportunities to selection criteria and tips for submitting offers.
EU contract notices are available on a single procurement website: the TED database (Tenders Electronic Daily). Approximately 140,000 new contract notices are published on TED every year, with a total estimated value of €450 billion.
Note: If you are interested in selling your services to EU governments and institutions, consult the TED database.
Canadian companies are encouraged to register with TED to learn about government procurement opportunities. TED lists available contracts by country and by sector. Most contract notices are available in English and in the national language of the member state, but the full tender documents are often available only in the national language.
On the TED database, you can find contract notices from:
- EU Member States, as well as from Liechtenstein, Norway and Iceland
- EU institutions such as:
- the European Commission
- the European Parliament
- the Council of the EU
- the European External Action Service
- Non-EU countries that involve EU funds
You can also find contract notices funded by:
- the European Central Bank
- the European Investment Bank
- the European Bank for Reconstruction and Development
The contract notice indicates the contracting authority, the contract value and the procurement procedure (e.g. open, restricted, negotiated, competitive dialogue). Remember that the EU has an open government procurement market. Therefore, while CETA may not cover some of the above procurement opportunities, you can still bid on these opportunities.
Canadian companies can filter their searches to find the most appropriate tenders. The EU publishes a TED Help Page that provides a detailed guide on browsing notices, searching for notices, customizing the search results display, managing search profiles, and other detailed procedures on how to use the platform.
To check the full detailed explanation of how to conduct advanced research on TED, consult pages 10-16 of the TED Help Page. The advanced research is divided by full text, country, type of documents, contract, edition number, document number, and publication date.
How do you set up a TED account?
Although anyone may browse TED, registered users can access TED archives, save settings (such as language preferences) and receive email alerts or RSS feeds, which notify users of new contract notices.
In Chapter 4 – Identifying opportunities of the EU Government Procurement Guide for Canadian Businesses, you can find the step-by-step guidance to create a TED account.
TED database homepage
Source: European Commission, TED database homepage
The procedure is easy and is composed of the following steps:
- Visit the TED website
- Click on the TED icon and then left click on “log in” on the lower left side of the page (this opens the European Commission Authentication Service website)
- Click on the globe image marked “external” - this is for users who do not work for EU institutions
- Enter the required criteria (username and password)
TED includes a classification system for goods and services. With this option you can display published notices divided by business sector.
Note that the EU Public Procurement Directives also allow government authorities to require bidders to fulfill certain environmental and social criteria, as well as to take into account certain innovation factors before awarding public contracts. Green and innovative companies will have increased chances of winning contracts.
NATO procurement is separate from EU procurement. For more information, see the website of the Canadian Mission to NATO. Canadian companies active in the defence and military services domain are encouraged to visit the Business page of the NSPA (NATO Support and Procurement Agency) website for opportunities on telecoms, cybersecurity, encryption and other defence-related ICT services.
More information about finding public procurement opportunities in Europe
- Global Affairs Canada - European Union Government Procurement Guide for Canadian Businesses
- Global Affairs Canada – Government Procurement
- CETA, Chapter 19 and Annexes 19-1 to 19-8 of the EU’s Market Access Schedule of the EU
- European Union – SIMAP: Information about European Public Procurement
- European Union – TED: Tenders Electronic Daily
Chapter 9: Business travel
I. Passport and visa
In most cases, if you are a Canadian citizen travelling to Europe for short-term tourism or a business trip, you do not need a visa. The rules change depending on whether the host country is part of the Schengen area, and on the citizenship of the traveller.
I.1 Canadian citizens entering the Schengen area
The Schengen area is an area of European countries without controls at internal borders. Schengen countries have reinforced controls at their external borders and established common visa rules. Please note that not all EU Member States are members of the Schengen area, and that the Schengen area also includes non-EU countries (see list below).
Canadian travellers planning to stay less than 90 days within a six-month period in the Schengen area do not require visas for countries that are parties to the Schengen area. If you leave the Schengen area and return within the same 180 days, the same 90-day limit still applies. The European Commission provides a short stay calculator to track the permitted days left.
EU countries that issue Schengen Visas
- Czech Republic
Non-EU countries that issue Schengen Visas
What do you need?
You need a Canadian passport that is valid at least three months after the date of return and that was issued within the previous 10 years.
What happens if you exceed the permitted 90 days of stay?
If staying longer than 90 days, a Canadian citizen needs to contact the embassy or consulate to obtain a visa. Important: long-term visas remain under national competence. Consequently, each member state operates different procedures and requirements. If a Canadian citizen does not obtain the appropriate visa and stays longer, he or she may be fined or deported.
Source: European Commission, DG Home Affairs
I.2 Non-Canadian citizens entering the Schengen area
If you are a Canadian resident and you do not hold Canadian citizenship, you may require a visa to enter the Schengen area depending on your country of origin. To determine whether you need a visa, please check the list of nationals who are required to have a Schengen visa.
In that case, you must hold a valid permanent resident card or valid multiple entry visa for Canada with three months’ validity after returning from the Schengen area. If your Canadian visa has expired, please have it renewed before applying.
The European Commission website shows a list of countries whose nationals must have a visa for entering in the Schengen area, and a list of countries, including Canada, for which the requirement has been waived (Regulation 539/2001).
I.3 The non-Schengen area
Currently, five EU countries are outside the Schengen area. Bulgaria, Romania, Cyprus and Croatia are waiting to be given the approval to join. Ireland has opted out of Schengen.
None of these EU countries imposes visas on Canadian citizens for short duration tourism or business trips. However, you should contact the embassies or consulates of non-Schengen countries for information on maximum duration of stay (usually 90 days) and on validity of travel documents. The following links may also be helpful:
The ETIAS authorization system
As of 2022, Canadian citizens will have to apply for an ETIAS travel authorization prior to their travel to Europe, in order to be allowed to enter the territory. ETIAS will apply to all nationals from visa-exempt countries wishing to enter the EU. For each application, applicants will be required to pay a travel authorization fee of €7. It is expected that the ETIAS will be operational in 2022.
II. Border controls
Border officials in EU countries may ask for other supporting documents such as an invitation letter, proof of lodging, return ticket, etc. For the precise requirements, again, you are advised to contact the embassies or consulates of the EU country in question.
Embassies or consulates in Canada.
Temporary reintroduction of borders control
In case of emergency or serious threat to public policy or internal security, countries from the Schengen area can temporarily reintroduce national border control within the area. You can check the full list of Member States’ notifications of temporarily reintroduced border controls on the website of the European Commission (DG Home Affairs and Migration). If the list contains the country to which you are planning to travel for business purposes, you should contact the relevant embassy.
III. Temporary entry of professionals and materials
III.1 Temporary entry of professionals
CETA has introduced temporary entry rights for Canadian professionals wishing to travel to the EU for a limited working period, and vice versa. Beneficiaries must fall within one of the categories below.
Rights for temporary entry to the European Union
- Individuals travelling as business visitors for investment purposes (e.g. managers or entrepreneurs coming to set up a company, not engaged in direct transactions with the general public): eligible to seek entry for a period of up to 90 days within a six-month period
- Investors: eligible to apply for a work permit of up to one year
- Intra-corporate transferees (e.g. specialist employees, senior personnel of companies): eligible to apply for a work permit of maximum three years, with a possible extension of up to 18 months
Contractual service providers and independent professionals
- Eligible to apply for a work permit of up to 12 months, with the possibility of an extension of up to 24 months.
- Specific conditions apply for contractual service providers and independent professionals, e.g. regarding qualifications, contracts and work experience
Short-term business visitor
- Short-term business visitors can seek entry for a period of up to 90 days in any six-month period
- They are not permitted to sell goods to the general public or provide services to consumers
For more information, please refer to Chapter 10 of CETA or to the embassy or consulate of the country to which you are seeking to apply for temporary entry. Please note that all EU countries put some temporary entry provisions in place, meaning that specific commitments vary by EU member state.
III.2 Temporary entry of materials
When bringing professional equipment to Europe, it is recommended that you first contact the consulate or embassy concerned for customs information.
You might also want to consider purchasing an Admission temporaire/Temporary admission (ATA Carnet). The ATA Carnet is an internationally recognized customs document for the temporary importation of goods, typically for trade shows, demonstrations, exhibitions or commercial samples. The ATA Carnet allows the temporary importation of goods, free from customs duties and taxes.
The Canadian Chamber of Commerce has published a web page on How to apply for an ATA Carnet to help Canadian businesses better understand the procedure and guide them through the process.
More information about ATA Carnets
The International Chamber of Commerce
IV. Travel tips and assistance
To assist business and other travellers, the Government of Canada provides country-specific information on:
- safety and security
- local laws and culture
- entry and exit requirements
Your Europe – Travel
The official EU website for people travelling in or between the 27 countries of the European Union. You will find practical information on documents you need, information on the euro and exchange rates, time zones and how to get health care when travelling to Europe, etc.
Learn more about the 27 countries of the European Union
Chapter 10: Glossary of terms
The name given to the process by which the United Kingdom of Great Britain and Northern Ireland has undertaken to withdraw from the European Union, following the result of the referendum held in the UK on June 23, 2016. The United Kingdom officially withdrew from the European Union on January 31, 2020.
Comprehensive Economic and Trade Agreement
Known by its acronym “CETA”, this is the free trade agreement signed between Canada and the European Union on October 30, 2016. It has been provisionally applied since September 21, 2017.
CETA aims to boost trade in goods and services between the EU and Canada via the elimination of 98% of tariffs and the reduction or removal of numerous non-tariff barriers.
Council of the European Union
The Council (also known as the “Council of Ministers” or “EU Council”) is composed of 27 ministers, each representing a national government. National governments usually assign ministers with expertise in whatever issue dominates the EU Council’s current agenda (e.g. economic and financial affairs, telecommunications and energy, environment, agriculture and fisheries, and the like).
The Council is responsible for passing EU laws, normally in conjunction with the European Parliament. The two bodies also share equal responsibility for adopting the EU budget. The EU Council signs agreements between the EU and non-EU countries.
Each member state holds the presidency of the EU for six months on a rotational basis. The next countries to hold the EU presidency are Germany (July–December 2020), Portugal (January–June 2021), and Slovenia (July–December 2021).
A directive is EU legislation that sets out a goal for all EU countries. Member states have some discretion on how they implement EU directives into national law. See also Regulation.
The European Patent Office
The European Patent Office (EPO) is a body of the European Patent Organisation, an intergovernmental organization, whose examiners decide whether to grant a patent for an invention. Patents granted by the EPO are known as “European patents”.
The euro is the currency shared by 19 EU Member States, which together form the Eurozone.
The European Council is composed of the heads of states or governments of the Member States of the EU. It provides non-binding general orientations to future EU policies and legislation. It should not be confused with the Council of the EU.
European Central Bank
The European Central Bank (ECB) is responsible for managing the euro and the EU’s monetary policy. Its main task is to maintain price stability in the Eurozone (the 19 countries sharing a common currency).
The European Commission is the executive body of the EU. It is responsible for managing and implementing the EU budget, its policies and programs, and any laws that are adopted by the European Parliament and Council.
The Commission submits proposals for legislation (consisting mainly of directives and regulations), to the European Parliament and Council for consideration.
It monitors the application of EU laws by Member States and if necessary, can take Member States to the European Court of Justice to oblige them to comply with EU law. The Commission also negotiates agreements with third countries on behalf of the EU.
The Commission is composed of a president and 27 commissioners who are appointed to five-year terms by national governments, subject to the approval of the European Parliament. It has a total staff of approximately 30,000 assigned to specific policy areas in departments known as directorates-general (DGs).
European Court of Justice
The European Court of Justice includes one judge appointed by each member state to a six-year term. The Court hears disputes arising under EU law and ensures compliance with EU laws and treaties.
European Economic Area
The European Economic Area (EEA) is an international agreement that allows access to the EU Single Market to be extended to non-EU members. EEA member countries are obliged to implement EU Single Market rules although they cannot participate in the drafting of those rules, which is the competence only of full EU Member States.
Currently, three neighbouring countries participate in the EEA: Norway, Iceland and Liechtenstein.
The European Parliament (EP) is composed of 705 representatives elected by citizens of EU Member States to five-year terms. The EP shares legislative and budgetary powers with the Council of the EU, and has the right to both approve and dismiss the European Commission.
The EP gives its consent to international agreements, including trade agreements, negotiated by the European Commission.
European Union Intellectual Property Office
The European Union Intellectual Property Office (EUIPO) is an EU agency responsible for the registration of the European Union trademark and of industrial designs.
A country that is a full member of the European Union is known as an EU member state. There are currently 27 EU Member States; the UK having left the EU in January 31, 2020.
A regulation is an EU legislative act that is immediately applicable in all Member States. See also Directive.
The EU Single Market, also referred to as the internal market, facilitates the movement of people, capital, goods and services across the EU through harmonized rules and standards.
Annex: Country business profiles
Below, several country profiles illustrate business opportunities for Canadian companies in certain key EU Member States, plus the UK. Please note that this is a non-exhaustive list that only depicts certain trends.
The United Kingdom is a highly sophisticated market with strong demand for services that improve productivity. There is great demand for a range of services related to ICT, aerospace, defence and security.
The UK cybersecurity market is regarded as the largest cybersecurity market in Europe, currently valued at over $5 billion. Despite generally flat IT budgets, the increasing threat of cyber attacks has led to greater spending on security. The most substantial opportunities can be found in organizations for which IT security is critical. Moreover, cloud services offer significant growth opportunities in the public and private sectors.
The size, structure and complexity of the UK’s public health-care system, the National Health Service (NHS), has created the need for a vast, efficient digital health infrastructure. The digitalization of the NHS is also driving the adoption of innovative technologies. Despite the market being very well developed and competitive, it still offers a lot of opportunities for Canadian companies offering innovative technology and specialized services.
More information about the United Kingdom market
- Trade Commissioner Service - Doing business in the UK
- The Canada-United Kingdom Chamber of Commerce
- UK trade & investment
The French services sector’s good performance has been driven by the subsectors of travel, financial services and technical services. In contrast, transport and R&D services are structurally deficit. ICT as well as administrative and support services have experienced a phase of steady growth since 2014. The comparatively wealthy French population is a leading consumer of services in the country, particularly in the digital, educational and travel sectors. The travel, ICT and financial services sectors offer business opportunities for Canadian companies.
The Internet-based sharing economy and its platforms are trending in France with 60% of Internet users using it. Another growing trend for e-merchants is the use of marketplaces, which now account for 9% of online purchasing. B2C (business-to-consumer) shopping abroad is also becoming more popular; there is a growing share of cross-border online purchases. In 2016, 41% of French online shoppers bought from foreign e-merchants.
In contrast, only about 20% of French companies make purchases online. Due to its growth potential and pre-existing infrastructure, this market is expected to grow significantly in the coming years. The market was estimated at $490 billion in 2016 and has huge potential.
With 5,000 companies and 400,000 jobs, France is a heavy-hitter in the European aerospace and defence industry, making up over 25% of European capabilities. Increasing European cooperation promises a positive future for this sector and Canadian service providers in the maintenance and repair sector can benefit from this.
More information about the France market
- Trade Commissioner Service – Doing business in France
- France-Canada Chamber of Commerce
- Business France
Germany is the largest consumer market in the EU and also has one of the largest ICT markets in the world. The ICT sector is a priority of the German government, which emphasizes digital infrastructure, digital economy, digital workplaces and innovative public administration in its economic and innovation policy. Key business opportunities exist in the fields of big data, IT security, the Internet of Things, health IT, cloud computing, artificial intelligence and business IT.
The German government’s energy transition policy (Energiewende) has boosted the expansion of renewable energy generation, distribution (e.g. smart grids) and storage systems as well as energy-efficient buildings, building modernization and smart homes.
The Energiewende, together with the government’s aggressive investment in infrastructure modernization, has resulted in positive growth rates of the German building and construction industry over recent years, which saw a new high in 2018. Particularly in fields such as energy efficiency, renewable energies, construction, maintenance and repair, Canadian services can provide valuable contributions.
More information about the German market
- Trade Commissioner Service – Doing business in Germany
- Germany Trade& Invest (GTAI)
- Canadian German Chamber of Industry and Commerce Inc.
Services account for more than 70.3% of Dutch national revenue and employ 81.4% of the workforce. The services sector is focused mainly on transportation, distribution, logistics, banking and insurance, water engineering, software development, the creative industry and new technologies (e.g. clean tech).
The country is also Europe's leading service provider in ocean freight, which is not surprising as its economy largely depends upon exports. One category of imported services that has been constantly growing over the past few years, are charges for the use of intellectual property, which indicates market opportunities for Canadian audiovisual services.
More information about the Netherlands market
- Trade Commissioner Service – Doing business in the Netherlands
- Netherlands-Canada Chamber of Commerce
- NL Platform
Belgium & Luxembourg
Key sectors with business opportunities for Canadian companies in Belgium/Luxembourg are energy, ICT services, health care, safety and security, as well as travel and tourism.
The Belgian economy largely reflects the overall European economy and consumer, being a bilingual and bicultural country (including French-speaking region of Wallonia and the Dutch-speaking region of Flanders) governed by the same legal system.
Luxembourg offers opportunities for the Canadian financial services sector. Financial services make up the single-largest category of services imported and saw a growth of 46% between 2013 and 2017.
More information about the Belgium & Luxembourg markets
- Trade Commissioner Service – Doing Business in Belgium
- Brusselles Invest & Export
- CanCham Belux
- Invest in Wallonia
- Flanders Investment & Trade
There are significant opportunities within the Irish market for small and medium-sized Canadian services exporters across a range of sectors. The best prospects include cybersecurity, energy (oil & gas), ICT, health care, financial services, digital economy, travel and tourism.
Ireland’s $14 billion digital economy accounts for 6% of GDP. The Irish ICT market is in a strong growth phase at present, with demand in this market growing by more than 5% annually. While it is open and highly competitive, the market offers excellent mid- to long-term opportunities for Canadian firms with leading-edge software products.
Ireland has a strong financial services sector with particular strengths in the management of funds, insurance, and specialist finance, such as aviation leasing and asset finance. Total assets under management for Irish-administered funds now exceed €4 trillion. The Irish financial services industry is very well connected with the rest of the world, making it easy for Canadian financial institutions to enter the market.
Ireland’s oil and gas sector is showing signs of recovery after a number of difficult years. Investment levels in Irish exploration are predicted to reach €500 million by 2020, based on planned drilling programs in Irish waters. Also, the potential for the development of a liquefied natural gas infrastructure is actively being explored. For Canadian companies working in the oil, gas, maintenance and repair services sectors, these developments are promising, given that their demonstrated know-how in this area could unlock profitable business opportunities.
More information about the Ireland market
- Trade Commissioner Service – Doing business in Ireland
- Enterprise Ireland
- Ireland Canada Business Association
Sweden provides business opportunities for services related to cutting-edge technologies. It has a long-established tradition of expertise in engineering, mining, shipbuilding and life sciences, making it a highly receptive market for new advanced technologies.
The demand for advanced technologies and services particularly includes those improving productivity, e.g. IT services. Driven by widespread adoption of smart devices, Sweden’s Internet economy is growing by more than 10% annually and represents about 8% of total GDP, making it an interesting market for Canadian companies.
Sweden’s commitment to sustainability across industry sectors drives market demand for services in the fields of renewable energy, green technology and energy efficiency.
More information about the Sweden market
Romania is the EU member state having registered the largest improvement in connectivity, Internet use, and integration of digital technology and ecommerce over recent years.
A vibrant community of ICT developers and the development of ICT clusters in the capital region and western Romania have also started to show spill-overs in the high-tech and start-up scene. These trends are forcing Romanian companies to give more importance to ICT services, thereby opening up business opportunities for Canadian companies in a growing market with a lot of potential.
More information about the Romanian market
Spain is one of the European countries where the services sector has grown the most, together with Croatia and Portugal. After the collapse of the housing bubble and financial crisis, Spain has experienced a boom of its tourism sector and a related shift toward a service economy.
So far the Spanish services sector is the only sector that has reached (and surpassed) pre-crisis levels. The services sector accounts for almost eight out of every 10 workers in Spain, a huge increase compared with 68.1% at the beginning of the financial crisis in 2008.
In addition to tourism, the health and social services sectors (driven by Spain’s excellent public health-care system) are also experiencing high growth rates, with transport growing more patiently. Certain sectors such as business services still lag behind pre-crisis levels. Taking into account the overall improving performance of the Spanish economy and the ambitious reform program Spain has undergone, the underperformance of the business services sector could present opportunities to certain Canadian service exporters.
Spain has a highly advanced aerospace industry that offers excellent opportunities for foreign companies. This sector continues to grow and shows great potential due to increased competition in the Spanish air transport market, a demand for new technology and a hugely increased defence budget for the coming years. This provides several opportunities for Canadian service providers both in the civil and military field, also including the maintenance and repair services sector.
More information about the Spain market
- Trade Commissioner Service – Doing business in Spain
- ICEX España Exportación e Inversiones (Spanish only)
- Canada-Spain Chamber of Commerce
Poland’s largest services imports are commercial services, with other business services, travel and transport following at a significant distance and all being similar in size (less than one third of commercial services). Canadian commercial service exporters will thus find many opportunities in the Polish market.
As a NATO member, Poland is one of the few countries that continues to meet its commitment to spend at least 2% of GDP on defence and will gradually increase annual defence spending to 2.5% by 2030. As a result of CETA as well as Canada being a NATO ally with its industry having adopted relevant NATO standards, the Canadian security and defence industry is in a good position to capitalize on this situation.
The continued Polish infrastructure development program includes improving Internet access, developing smart cities and encouraging companies to conduct research and development in Poland. In part driven by these investments, digital technologies are a growing sector in Poland. There is a strong demand for IT solutions to support advanced manufacturing, smart cities, the Internet of Things, cloud computing and cybersecurity, all of which offer potential for Canadian exporters.
As Poland seeks to diversify its energy sources and modernize its electricity generation and distribution systems, Canadian companies will find opportunities where they can draw on their experience with natural gas storage and transmission. The construction of new power plants to replace older, less efficient coal burning plants as well as smart grid technologies and nuclear power also holds potential.
More information about the Poland market
- Trade Commissioner Service – Doing business in Poland
- Polish Investment and Trade Agency
- Polish Canadian Chamber of Commerce
Estonia ranks 9th in the 2018 EU Digital Economy and Society Index. It is the champion in Europe in terms of online provision of public services and scores above the EU average in digital skills and the use of Internet by citizens. The key challenge in Estonia is the digitization of companies, offering opportunities for Canadian service providers.
Estonia has also become a focal point for issues related to cyber security. In April 2007, the country experienced intensive and coordinated cyber-attacks. The attacks spurred the Estonian government to increase resources and structures related to cyber defence and to develop an innovative public-private partnership, called the Cyber Defence League, to enhance the country’s ability to prevent and respond to further cyber-attacks. Canadian companies offering innovative and leading-edge cybersecurity solutions will find Estonia to be an ideal market.
Thanks to its large domestic oil shale reserves, Estonia is relatively independent in energy, but produces the second highest greenhouse gas emissions per capita in the EU. The Estonian government is planning to diversify electricity supply via investment in renewables and cleaner oil shale technology, which will create commercial opportunities for Canadian companies. Estonia’s renewable energy potential lies mainly in biomass, biogas, wind and co-generation from bio fuels. There is also interest in other energy technologies such as smart grid solutions.
More information about the Estonian market
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