Right of establishment in the EU
Whereas freedom to provide services chiefly concerns the pursuit of an economic activity by a person in another Member State without having the principal or secondary place of business in that State, right of establishment entails permanent installation in a Member State in order to pursue an economic activity in that State. In fact, the situation of the person who establishes himself is characterised by the fact that he creates a permanent link with the country of establishment, unlike somebody who provides services in a country other then that of his permanent establishment. Through its judgment of 21 June 1974 in the Reyners case (Dutch legal practitioner wishing to pursue his profession in Belgium), the Court established the direct effect [see section 3.3.] of Treaty provisions concerning the freedom of establishment. It held that any individual may, on the basis of Article 52 of the EEC Treaty (Article 49 of the TFEU), demand directly the same treatment as is applied to nationals [Case 2/74]. Therefore, no special European legislation is required.
The right for citizens of EU Member States to work or pursue activities as self-employed persons in the Member States means the right to enter and to reside in the member country in which they wish to work or pursue those activities. This right is extended to their spouses, children and other members of their families, including the registered partner if the legislation of the host Member State treats registered partnership as equivalent to marriage [Directive 2004/38]. For periods of residence of longer than three months, Member States may only require Union citizens to register with the competent authorities in the place of residence. The self-employed person and his or her family members who have resided in a host Member State during a continuous period of five years have a right of permanent residence in that State. The members of the family enjoy the right of residence even after the self-employed person's death. A residence requirement can be justified only if it is based on objective considerations independent of the nationality of the persons concerned and proportionate to the legitimate aim of the national provisions [Case C-138/02].
Under Article 52 of the Treaty on the functioning of the EU (ex Article 46 TEC), the principle of freedom of establishment does not concern national provisions providing for special treatment for foreign nationals on grounds of public policy, public security or public health. The Directive on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States contains an enumeration of the circumstances, which cannot be invoked as grounds for refusal of entry or expulsion and a series of rules concerning the procedure, which must be followed where nationals of Member States may be refused entry or expelled [Directive 2004/38]. According to the Court of Justice, European law precludes the automatic expulsion without right of appeal of the national of a Member State following a criminal conviction which takes account neither of the personal conduct of the person convicted nor of the risk he represents to public order [Case C-482/01].