The use of letterbox-type companies by employers to circumvent and avoid labour law, Collective Labour Agreements (CLAs), social security contributions and corporate taxes is currently undermining the European Social Model and public finances. Letterbox companies or conduit entities, that is, legal entities established on paper in any European Union (EU) jurisdiction without or with a minimal link to economic material activities carried out in that jurisdiction, enable ‘regime shopping’ for lower taxes, wages, labour standards and social contributions that apply in countries of legal residence.

The European Trade Union Confederation (ETUC) – in partnership with IndustriALL Europe, the European Federation of Food, Agriculture and Tourism Trade Unions (EFFAT), the European Federation of Building and Woodworkers (EFBWW) and the European Transport Workers’ Federation (ETF) – has therefore initiated a project on letterbox companies in order to better understand the problem and develop a position and recommendations. www.etuc.org/press/letterbox-type-practices-avoiding-taxes-and-exploiting-workers-across-eu