Between 1999 and 2003, three landmark decisions of the European Court of Justice—Centros, Überseering, and Inspire Art—struck down laws restricting the ability of corporations to exercise their right to free establishment under the EC Treaty. The most significant impact of this freedom is the ability of a corporation to choose its state of incorporation. Prior to the three landmark decisions, continental Europe had effectively prevented such choice by forcing a corporation to be incorporated in the state where its central management was located, the so-called real seat doctrine. Yet the revolution in corporate choice of law expected by many scholars after the three landmark decisions did not occur. This Note argues that this failure resulted from indirect restrictions imposed by continental countries which removed the incentives motivating corporate mobility. Three new decisions by the European Court of Justice, de Lasteyrie du Saillant, Marks & Spencer, and SEVIC Systems, have attacked these indirect restraints. The Court’s analysis in this second wave of liberalization demonstrates a willingness to overturn not only laws that directly restrict corporate freedom of establishment but also statutes that reduce corporate incentives to seek more efficient governing law. While the first wave of landmark decisions may have been more significant jurisprudentially, the second will be far more influential on the actual exercise of freedom of establishment. The effect of the second wave cases will be a European corporate landscape that looks much more like that of the United States than of Europe itself last year.
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