The free movement of capital is covered by Articles 40 to 45 of the EEA Agreement and Annex XII of the EEA Agreement. It is one of the fundamental freedoms that underpin the Internal Market (free movement of people, goods, services and capital).
For EEA nationals, it means the ability to perform many operations abroad, as diverse as opening bank accounts, buying shares in non-domestic companies, investing where the best return is, and purchasing real estate. For companies, it principally means being able to invest in and own other European companies and take an active part in their management.
There are some exceptions to the free movement of capital. These are primarily linked to taxation and public policy considerations.
In 2015, the European Commission issued the Capital Markets Union (CMU) action plan to build a true single market for capital in the EU. In December 2019 the Council announced that the EU was close to having the original action plan and intended to continue and further deepen the project. Under the current CMU action plan, the European Commission is examining national barriers to the free movement of capital with a view to enhance access to finance for EU businesses, especially SMEs.
Unlike the Banking Union, CMU is designed for all 27 EU Member States and it is EEA relevant.