Businesses should find it easier from today to offer services in other member states because of the entry into force of EU legislation prohibiting the imposition of ‘discriminatory’ requirements on businesses from other EU countries.

Examples of requirements that are banned under the legislation – known as the services directive – include economic needs tests and residency requirements.

The legislation also removes barriers to cross-border shopping and cross-border business-to-business sales, and obliges member states to create a website where foreign businesses can find and fill out all the administrative forms necessary to set up a branch or subsidiary in that country.

The Netherlands Bureau for Economic Policy Analysis estimates that the legislation will bring €60 billion-€140bn of economic benefits to the EU, equivalent to 0.6%-1.5% of the EU’s gross domestic product.

It appears, however, that a number of member states have failed either to meet the deadline for putting the directive onto their statute books, or to take all the necessary operational steps so that it fully applies in practice.

According to sources closely following the implementation of the directive, Greece, Slovenia, Ireland, Italy, Luxembourg and Poland are among those that have failed to complete the operational steps. In Austria, operational implementation has proceeded well, but legal implementation is incomplete.

The European Commission circulated a note to member states in September, expressing “serious concern” about delays to implementation in some countries.

The legislation obliges member states to hold a ‘mutual evaluation’ process in 2010 in which they assess how well each country has implemented the law, and where improvements can be made. The Commission is expected to report at the end of 2010 on how well the directive has been implemented.

The Commission can take member states that do not obey the legislation to the European Court of Justice, the EU’s top court.

The services sector accounts for approximately 70% of the EU economy. The percentage of the economy affected by the new directive is far smaller, however, because some industries and trades have been left outside of its scope. Services excluded from the directive include financial services, temporary work agencies, gambling and most healthcare services.

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