How to manage a business in EU when you don't live in the EU
Discussion
Intro:
I live in Norway and I have a national-only car related e-commerce business. Expansion outside of border (ideally covering EU or even US) is of course ideal but I never really considered it because I figured I have to be there to make it work fluently, I assumed there would be too many strings to pull by myself only, and that I can't really compete internationally if I am shipping from Norway (too much tax, storage and employment costs to be competitive).
Idea birth:
I was discussing business with a friend today and he gave me an idea; that I should sell all that I normally sell on the biggest continental sales channels (Amazon.uk, ebay.de etc.), but since I don't differentiate on low prices and prefer one manageable channel instead of several, I thought I will be better off on a dedicated EU (.eu) website for multiple positive reasons.
What I want to do:
AFAIK, there are logistics companies (I don't know which one yet) which offers help to receive goods from shippers, and store goods themselves. And I'm assuming that there are companies which offers to ship the goods too.
So - is it possible to live in one non-EU country and manage a business like this through another EU country?
I am thinking about Sweden (first and foremost because it's the neighbor EU country and I will be able to drive there without depending on flight schedules). I have no idea what Sweden's requirements are for registering a business there as a non-EU resident.
To my surprise, the domain autoenthusiast.eu was available and I have just now secured it for this purpose. I tried Google Translate and it seems Auto is universal throughout the continental languages and so is enthusiast (in one form or another), I think I scored a great domain.
Can I pull this off or will there be significant challenges?
I live in Norway and I have a national-only car related e-commerce business. Expansion outside of border (ideally covering EU or even US) is of course ideal but I never really considered it because I figured I have to be there to make it work fluently, I assumed there would be too many strings to pull by myself only, and that I can't really compete internationally if I am shipping from Norway (too much tax, storage and employment costs to be competitive).
Idea birth:
I was discussing business with a friend today and he gave me an idea; that I should sell all that I normally sell on the biggest continental sales channels (Amazon.uk, ebay.de etc.), but since I don't differentiate on low prices and prefer one manageable channel instead of several, I thought I will be better off on a dedicated EU (.eu) website for multiple positive reasons.
What I want to do:
AFAIK, there are logistics companies (I don't know which one yet) which offers help to receive goods from shippers, and store goods themselves. And I'm assuming that there are companies which offers to ship the goods too.
So - is it possible to live in one non-EU country and manage a business like this through another EU country?
I am thinking about Sweden (first and foremost because it's the neighbor EU country and I will be able to drive there without depending on flight schedules). I have no idea what Sweden's requirements are for registering a business there as a non-EU resident.
To my surprise, the domain autoenthusiast.eu was available and I have just now secured it for this purpose. I tried Google Translate and it seems Auto is universal throughout the continental languages and so is enthusiast (in one form or another), I think I scored a great domain.
Can I pull this off or will there be significant challenges?
you can get companies who will offer logistics / warehouseing / etc.
so yes, you can do this...
but if it is going to grow it might also make sense to look at bringing in partners in other countries to grow those territories...
also be aware - that not everyone will buy from a .eu domain, in the UK .com / .co.uk seem to be the norm, anything else will imply delays and costs in shipping...
you might also wish to look at whetehr you are breaching anyone's trademarks if you trade in their territories - a domain name doesn't give you the right to trade under a specific name...
so yes, you can do this...
but if it is going to grow it might also make sense to look at bringing in partners in other countries to grow those territories...
also be aware - that not everyone will buy from a .eu domain, in the UK .com / .co.uk seem to be the norm, anything else will imply delays and costs in shipping...
you might also wish to look at whetehr you are breaching anyone's trademarks if you trade in their territories - a domain name doesn't give you the right to trade under a specific name...
Putting aside the logistics for a moment, you are perfectly entitled to trade wherever you like, be it simply selling stuff into other countries or operating as a business in other countries. How you do this depends very much on the type of products you sell, the margin you achieve and turnover as well as whether the products are price sensitive; i.e are people buying on price? The one important thing you need to take into account in the different tax arrangements in the countries to which you sell as this can affect the competitiveness of your products but this is something any competent Accountant can advise on.
If you deem it appropriate to set up a business in each country, you will find that many will not permit 100% foreign ownership (or even majority foreign ownership) so you will need to find a local partner, which is to be advised anyway as not only are you sharing risk, but also have someone fully engaged in the business that knows their way around the local business cultures and laws (or lack of them in some cases).
Have you considered offering franchises? These can be effective means to expand internationally.
Either way, a good first step would be to get in touch with the Norwegian equivalent of UK Trade and Investment (https://www.gov.uk/government/organisations/uk-trade-investment) and they can advise on the best routes and markets.
Regarding logistics. There remains (IMO) a lot of scepticism around domains and those such as .eu and the like have a whiff of the 'temporary' about them. This is only in my experience and wouldn't suggest this is a widespread thing but certainly, having a country-specific or .com domain does still carry some added credibility.
I buy quite a bit of stuff from Apple via their UK online store. The payments are processed in Ireland and the products dispatched from Holland so a centralised EU fulfilment facility is certainly workable. If its a hands on type of thing, worth looking at Eastern Europe or yet-to-join-Europe Countries such as Albania where labour costs are significantly cheaper and incentives for overseas investment the greatest.
Hope that's of help.
Good luck.
If you deem it appropriate to set up a business in each country, you will find that many will not permit 100% foreign ownership (or even majority foreign ownership) so you will need to find a local partner, which is to be advised anyway as not only are you sharing risk, but also have someone fully engaged in the business that knows their way around the local business cultures and laws (or lack of them in some cases).
Have you considered offering franchises? These can be effective means to expand internationally.
Either way, a good first step would be to get in touch with the Norwegian equivalent of UK Trade and Investment (https://www.gov.uk/government/organisations/uk-trade-investment) and they can advise on the best routes and markets.
Regarding logistics. There remains (IMO) a lot of scepticism around domains and those such as .eu and the like have a whiff of the 'temporary' about them. This is only in my experience and wouldn't suggest this is a widespread thing but certainly, having a country-specific or .com domain does still carry some added credibility.
I buy quite a bit of stuff from Apple via their UK online store. The payments are processed in Ireland and the products dispatched from Holland so a centralised EU fulfilment facility is certainly workable. If its a hands on type of thing, worth looking at Eastern Europe or yet-to-join-Europe Countries such as Albania where labour costs are significantly cheaper and incentives for overseas investment the greatest.
Hope that's of help.
Good luck.
First of all, thank you both so much for taking time to reply to me, I humbly appreciate it!
I haven't considered a franchise because I basically haven't got anything proprietary or actually unique, it's just a channel that connects customers of a certain group to wanted products of that group. I doubt a franchise would work in my case.
However, setting up independent webshops in each respective country with partners, might be an alternative. But that will likely require tons of research and work, which makes it a lot less tempting.
As I said above I didn't know about the .eu skepticism. One could battle it with providing feedback scores on delivery and customer services, no? Maybe that's not efficient enough...
I knew about the Apple thing. I would have loved some insight to why they aren't only based in one place in Europe, they must have researched well for a most effective solution.
akirk said:
you can get companies who will offer logistics / warehouseing / etc.
so yes, you can do this...
but if it is going to grow it might also make sense to look at bringing in partners in other countries to grow those territories...
also be aware - that not everyone will buy from a .eu domain, in the UK .com / .co.uk seem to be the norm, anything else will imply delays and costs in shipping...
you might also wish to look at whetehr you are breaching anyone's trademarks if you trade in their territories - a domain name doesn't give you the right to trade under a specific name...
Allright. I was considering this as a "one domain/webshop serves all of EU" solution. And I didn't know about the .eu skepticism, now I know. so yes, you can do this...
but if it is going to grow it might also make sense to look at bringing in partners in other countries to grow those territories...
also be aware - that not everyone will buy from a .eu domain, in the UK .com / .co.uk seem to be the norm, anything else will imply delays and costs in shipping...
you might also wish to look at whetehr you are breaching anyone's trademarks if you trade in their territories - a domain name doesn't give you the right to trade under a specific name...
StevieBee said:
Putting aside the logistics for a moment, you are perfectly entitled to trade wherever you like, be it simply selling stuff into other countries or operating as a business in other countries. How you do this depends very much on the type of products you sell, the margin you achieve and turnover as well as whether the products are price sensitive; i.e are people buying on price? The one important thing you need to take into account in the different tax arrangements in the countries to which you sell as this can affect the competitiveness of your products but this is something any competent Accountant can advise on.
I actually thought if someone for example bought something online from Germany to England, they wouldn't have to pay VAT or import taxes because it's the point of EU to create a frictionless trade. If you can understand what I'm trying to say...StevieBee said:
If you deem it appropriate to set up a business in each country, you will find that many will not permit 100% foreign ownership (or even majority foreign ownership) so you will need to find a local partner, which is to be advised anyway as not only are you sharing risk, but also have someone fully engaged in the business that knows their way around the local business cultures and laws (or lack of them in some cases).
Have you considered offering franchises? These can be effective means to expand internationally.
Good advice. I know that if I settle in Sweden (as in a base for rest of EU countries), I am permitted to fully own a business because I live in a EEA partner country. I also read great things about establishing a business in Danmark, maybe that's something I will look in to because of lower taxes, ease of startup, little language/culture barriers and multiple daily one-hour flights.Have you considered offering franchises? These can be effective means to expand internationally.
I haven't considered a franchise because I basically haven't got anything proprietary or actually unique, it's just a channel that connects customers of a certain group to wanted products of that group. I doubt a franchise would work in my case.
However, setting up independent webshops in each respective country with partners, might be an alternative. But that will likely require tons of research and work, which makes it a lot less tempting.
StevieBee said:
Either way, a good first step would be to get in touch with the Norwegian equivalent of UK Trade and Investment (https://www.gov.uk/government/organisations/uk-trade-investment) and they can advise on the best routes and markets.
Regarding logistics. There remains (IMO) a lot of scepticism around domains and those such as .eu and the like have a whiff of the 'temporary' about them. This is only in my experience and wouldn't suggest this is a widespread thing but certainly, having a country-specific or .com domain does still carry some added credibility.
I buy quite a bit of stuff from Apple via their UK online store. The payments are processed in Ireland and the products dispatched from Holland so a centralised EU fulfilment facility is certainly workable. If its a hands on type of thing, worth looking at Eastern Europe or yet-to-join-Europe Countries such as Albania where labour costs are significantly cheaper and incentives for overseas investment the greatest.
Hope that's of help.
Yup, I did plan to gather information from local instances for multi national trade Regarding logistics. There remains (IMO) a lot of scepticism around domains and those such as .eu and the like have a whiff of the 'temporary' about them. This is only in my experience and wouldn't suggest this is a widespread thing but certainly, having a country-specific or .com domain does still carry some added credibility.
I buy quite a bit of stuff from Apple via their UK online store. The payments are processed in Ireland and the products dispatched from Holland so a centralised EU fulfilment facility is certainly workable. If its a hands on type of thing, worth looking at Eastern Europe or yet-to-join-Europe Countries such as Albania where labour costs are significantly cheaper and incentives for overseas investment the greatest.
Hope that's of help.
As I said above I didn't know about the .eu skepticism. One could battle it with providing feedback scores on delivery and customer services, no? Maybe that's not efficient enough...
I knew about the Apple thing. I would have loved some insight to why they aren't only based in one place in Europe, they must have researched well for a most effective solution.
StevieBee said:
Hope that's of help.
Good luck.
That was VERY useful! Thank you stranger!Good luck.
Edited by drivingaddict on Tuesday 1st September 17:12
Edited by drivingaddict on Tuesday 1st September 17:13
drivingaddict said:
That was VERY useful! Thank you stranger!
You're welcome!I'll not quote your quotes but just a few additional pointers...
On the issue of taxation. VAT is not the big issue here, it's where you earn your money. For example, we did some work in Bulgaria several years ago where Corporation Tax is (was) 16% which is quite attractive. But if you then transfer that money out of the country, you pay another 16% on top. And this was after they joined the EU. There are legal ways around it - which I know little of but your accountant will.
Overcoming the .eu thing? Well, yes, if you have enough scores have a strong enough brand and are well marketed then yes, it's possible but will still exist to an extent and it will take time and money.
RE: Apple. Many years ago, Ireland started offering IT companies incentives (partly financed by the EU) to locate their European operations there so money would flow through the Irish economy and the .dot coms of the times had lots of money (or lots of other people's money as it turned out). Thus, over a fairly short period of time, the country developed a unique skills base in IT financial management. Holland, Denmark and to a lesser extent, Germany are roughly central to the core European market so are the least costly places from which to mail stuff and because many do, the unit costs are significantly cheaper.
Onwards and upwards!
StevieBee said:
drivingaddict said:
That was VERY useful! Thank you stranger!
You're welcome!I'll not quote your quotes but just a few additional pointers...
On the issue of taxation. VAT is not the big issue here, it's where you earn your money. For example, we did some work in Bulgaria several years ago where Corporation Tax is (was) 16% which is quite attractive. But if you then transfer that money out of the country, you pay another 16% on top. And this was after they joined the EU. There are legal ways around it - which I know little of but your accountant will.
Overcoming the .eu thing? Well, yes, if you have enough scores have a strong enough brand and are well marketed then yes, it's possible but will still exist to an extent and it will take time and money.
RE: Apple. Many years ago, Ireland started offering IT companies incentives (partly financed by the EU) to locate their European operations there so money would flow through the Irish economy and the .dot coms of the times had lots of money (or lots of other people's money as it turned out). Thus, over a fairly short period of time, the country developed a unique skills base in IT financial management. Holland, Denmark and to a lesser extent, Germany are roughly central to the core European market so are the least costly places from which to mail stuff and because many do, the unit costs are significantly cheaper.
Onwards and upwards!
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