Not only natural but also legal persons can enjoy rights under the European Convention on Human Rights (ECHR), provided that they are not too closely related to the state. Private military and security companies (PMSCs) can have rights under the Convention, such as the right to property (Art. 1 Prot. I) which can include reasonable expectations of profit. As restrictive national regulation of PMSCs is becoming more likely, Europe-based PMSCs will in the long run have to deal with the question of whether they will be able to employ ECHR-rights to offset the effects of domestic regulation. At the heart of the issue is the question whether Art. 34 ECHR, which gives standing only to “non-governmental” entities, covers commercial enterprises which engage in activities which are classically located squarely in the realm of the state. PMSCs challenge the state’s monopoly to the use of armed force. The existing bias against mercenaries is not restricted to the law of armed conflict but is also reflected in human rights law as the distinction between governmental agents and non-governmental entities is breaking down. While the European Court of Human Rights (ECtHR) has dealt with commercial and quasi-commercial activities of states (e.g. in Radio France v. France, Islamic Republic of Iran Shipping Lines v. Turkey and Österreichischer Rundfunk v. Austria), the rights of commercial enterprises which de facto exercise armed power on behalf of states have not yet received sufficient attention at the ECtHR. In the jurisprudence of the ECtHR a functional approach can be identified which can provide the basis for a twofold approach to PMSC rights under the Convention.