Cross-Border Conversions in the EU: What’s Changed

Moving a company’s registered home from one EU country to another used to mean killing it off first. That’s no longer true. A cross-border conversion lets a limited company relocate its incorporation to another EU member state while staying, legally, exactly the same company. No dissolution, no new legal entity, no break in its corporate history.

This isn’t a theoretical tool. Zurich Insurance used it in January 2024 to move from an Irish plc to a German joint stock company. Luxembourg finished transposing the underlying rules into national law in March 2025. Belgium did so back in 2023. Yet on most compliance teams’ radar, this process barely registers. That’s worth fixing, because for any group restructuring its entity portfolio across borders, it’s often the cleanest option on the table.

Where did this come from?

The legal basis is the Mobility Directive (Directive (EU) 2019/2121), which amended the existing EU company law framework to give cross-border conversions, mergers and divisions a proper, harmonised procedure. Member states were required to transpose it into national law by 31 January 2023. Not every country hit that deadline cleanly. Belgium had rules in place by 2023; Luxembourg’s implementing law only entered into force on 2 March 2025, after the bill passed parliament in January and was published in the official gazette in February of that year.

So depending on which jurisdictions are involved, the practical rules a group faces can vary quite a bit, even though the underlying directive is the same. That’s the first thing to check before assuming a conversion will run smoothly: has the destination country actually finished transposing, and how generously did it use the discretion the directive allowed?

How did companies relocate before this existed?

Before conversions existed as a standalone tool, groups had two realistic options, and neither was built for a simple change of address.

The first was a cross-border merger: merge the company into a shell entity in the target country. The shell survives, the original is dissolved, and its assets and liabilities transfer across. That transfer is the problem. Property registries need updating. Listed securities need moving through exchange mechanisms. Contracts with anti-assignment clauses need counterparty consent. Some liabilities incurred outside the EEA might not even transfer cleanly. None of that is quick, and a lot of it is unnecessary when all you actually wanted was to change the company’s nationality, not its business.

The second option was converting into a Societas Europaea (SE), an EU-wide corporate form that can move between member states. That route has its own friction. A private company has to become a public one first. Unless it already has a subsidiary elsewhere in the EU for at least two years, it then has to merge into a company abroad just to create the SE. In Ireland, that merger step needs High Court approval. It’s a workaround, not a direct route.

What actually changes with a cross-border conversion?

A cross-border conversion skips both problems. There’s no merger, no dissolution, no transfer of assets between entities. The same corporate vehicle simply re-registers in a new member state. Employees keep their existing contracts. Shareholders keep equivalent shares in the new jurisdiction; there’s no share exchange to negotiate.

That doesn’t mean it’s paperwork-free. The directive builds in protections for the people a relocation could affect, and these apply regardless of which member state is involved:

• Shareholders who vote against an approved conversion can require the company to buy back their shares at a value set out in the draft terms, usually checked by an independent expert.
• Creditors get a window, typically three months from publication of the plan, to apply for extra security if they can show the move puts their claims at risk.
• Employees must be given the directors’ explanatory report, covering the effect on jobs and working conditions, for a minimum consultation period before the vote.

Some member states went further with their own additions. Luxembourg’s implementing law, for instance, created a distinct Special Regime for conversions, mergers and divisions between certain Luxembourg company types and EU counterparts, layering in enhanced disclosure and a mandatory anti-abuse check by a Luxembourg notary before the conversion can complete. The general rules for purely domestic transactions changed far less. In addition, not every company qualifies at all: insolvent companies, unlimited companies, and certain regulated entities such as credit institutions in resolution are excluded outright.

What does the process actually look like in practice?

The departure country’s law governs everything up to approval; the destination country’s law governs registration of the new entity. In broad terms, a company leaving its home state needs to:

• Draft the terms of conversion, plus a directors’ report explaining the rationale and its effect on employees and members.
• Make that report available to employees for a set minimum period, often around six weeks.
• Register the draft terms with the local companies registry.
• Allow the three-month creditor window to run.
• Advertise the conversion publicly, then hold a general meeting to approve the terms and the new constitution.
• Obtain a pre-conversion certificate confirming all local formalities are satisfied before the destination state will register the company.

Once that certificate issues, the destination registry completes registration, and both registries update their records to reflect the move. Zurich Insurance’s plc-to-AG conversion followed essentially this path, and its completion in January 2024 is the clearest evidence yet that the mechanism works in practice, not just on paper.

Why should this matter to a compliance team right now?

Groups holding entities across several EU jurisdictions are the ones most likely to benefit. If a group has been consolidating structure, closing dormant entities, or simplifying a multi-country footprint, a conversion is often faster and less disruptive than a merger, precisely because nothing needs to be transferred.

There are limits worth flagging early. A conversion won’t help if the actual goal is combining two separate businesses; that still calls for a merger. Exit taxes can apply depending on the jurisdictions involved. And a converted company still has to adapt to its new home: new constitution, possibly new auditors, new tax registrations, and re-authorisation if it’s a regulated entity. If it keeps staff or premises in the departure state after moving, it may need to register a branch there, which can itself trigger a local corporation tax liability.

What should you check before considering a cross-border conversion in the EU?

None of this is a reason to avoid the tool, just a reason to scope it properly before committing. A short list to work through:

• Confirm both the departure and destination states have transposed the directive, and how each used its discretion, since national add-ons (like Luxembourg’s Special Regime) can change timing and formalities.
• Map out the creditor and shareholder consultation windows early. These run in months, not weeks, and shape the overall timeline.
• Check regulatory status in both jurisdictions if the entity is licensed or supervised; reauthorisation can be the longest step.
• Model any exit tax exposure before assuming the move is cost-neutral.
• Reach out to your dedicated legal contact to confirm how the process applies to the specific entities you manage, since the right route depends heavily on entity type and sector.

What’s next?

Managing a cross-border entity restructuring requires detailed planning and full legal awareness. For more insights into processes in other jurisdictions, explore our article: Korean Commercial Code: Board Election Reforms.

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• Request a Demo – See Klea in action for your organisation.
• Start a Trial – Experience first-hand how automation reduces workload and improves efficiency.
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