How do I set up an EU trading company?
Post Brexit we are now seeing just how costly and time consuming buying and selling to the EU is. To the extent that the government is now “unofficially” recommending UK traders establish an operation inside the EU bloc.
So how do you set up a trading company in the EU? What are the considerations and costs vs benefits?
Why would I need an EU trading company?
If you currently buy bulk product from outside the UK and distribute it to the EU, post Brexit, you will need to import the bulk product into the UK with the relevant paperwork and duty. Breaking the bulk down into smaller distributable units for shipping to the EU will require export documentation, customs and duty charges. This as you can imagine is a massive and costly undertaking fraught with confusion and delays.
If you had an establishment in the EU that could receive and redistribute product either physically or by invoice only these complications would be significantly reduced.
We recently established an organisation for a long standing UK client that whilst based in the UK bought product in mainland Europe and sold it in the Republic of Ireland. We created a business for them in the EU in a matter of weeks, with no delays, customs documentation fees or hassle.
Considerations
Do you need physical representation locally?
What are the local tax rates and regulations?
Financial and non Financial reporting requirements?
Employment laws?
Can you repatriate profits to the UK?
If you are buying low volume items in the EU for direct shipping in the EU then a simple reinforcing centre may be the answer.
Each outcome has a different set of requirements and solutions.
We at Mount Business Services can help you make the right choices in business design. A design that will facilitate and grow your existing business. Contact us now for a free consultation where we can discuss how we can help on 0203 006 0750 or info@mountbusinessservices.co.uk.
The key thing is to remember is that the structure must reflect the substance of a transaction and actually help the flow of goods and services not try to shoe horn a logistical process into a legal structure.
If you buy 80% of your product in France for distribution in France, having a warehouse/repacking unit in France makes sense. Despite the tricky labour and tax regulations.
However if you are importing bulk product form China for distribution across the EU your choices are wider.
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