A company registered in Hungary should be allowed to run its operations from another European Union state, an adviser to the bloc's top court said in an opinion likely to stoke political sensitivities.

Some EU states fear companies are cherry-picking locations for registering and operating to benefit from the friendliest corporate law and tax regimes.

The case involves Cartesio, a limited partnership company registered in Hungary, that was barred by a local Hungarian court from having its operational head office in Italy while still being incorporated in Hungary.

The company took its case to the European Court of Justice, arguing that its request was in line with basic EU rules such as the freedom to set up shop anywhere in the 27-nation Union.

"Advocate General Poiares Maduro considers that a company registered in a member state can transfer its operational headquarters to another member state," the court adviser said in a statement.

EU treaty provisions on the freedom of establishment - or being allowed to operate anywhere in the EU - clearly apply to the case in hand, the adviser said.

If the court backs the adviser's opinion, which it does in most cases, it will be a boost for the European Commission and for companies looking to cut red tape and have access to more markets.

EU Internal Market Commissioner, Charlie McCreevy, is due to unveil by the summer a proposal on creating a European Private Company statute so that smaller firms can operate cross border more easily.

McCreevy has said he will propose allowing companies to be registered in one EU state and have their operations entirely in another, if they want to, despite opposition from some EU lawmakers.

McCreevy told the European Parliament's legal affairs committee on Monday that previous European Court of Justice rulings already back this principle.

"The rulings of the Court of Justice recognise that right of company founders to register companies in any member state irrespective of the location of their activities," McCreevy said.