Setting up simple EU Company to act as EC-Rep?

[John_V85]

We are considering the requirements for an EC Rep (as a UK business) for food contact products.

In particular, we are considering using a third party, vs. what we understand is a possibility of setting up an EU branch. That would give us the required EU address at potentially a fraction of the cost of some of the numbers we are seeing from third parties.

Has anyone gone down this route? Setting up a company in the UK with a nominee address, etc., is incredibly straightforward and the basic recurring costs (filing, accounts, etc.) are not very much), but I have no experience with the best place of comparability of doing this in the EU.

Thanks for any comments or suggestions.

 

[Paul Kelly ICHYB]

Setting up simple EU brand​

Do you mean setting up an EU company?

 

[John_V85]

Setting up simple EU brand​

Do you mean setting up an EU company?

Correct. Yes.

I'm not sure how to correct the typo in the title. If a mod is able to change "brand" to "branch" or "company" in the title that would be most appreciated. Thanks.

 

[eteb3]

best place of comparability of doing this in the EU.

I have no direct experience, but I researched this also and Estonia came in as hands-down the easiest place: they really want businesses to set up there, and make it super-easy, a bit like Delaware.

One issue is that most EU countries are civil law jurisidictions, and often a company can only be created by deed - and under civil law, a deed has to be executed before a notary. Companies also frequently have minimum capital requirements.

In that respect Ireland (and Malta, though didn't pass my smell test) looked better bets: Ireland especially follows English common law (for reasons best not brought up). Ireland also has the advantage of a common language, and regulations that look broadly familiar to us.

PS, does NI possibly have an exemption, so Your Agent Ltd could have its registered office in Belfast, but trade into EU?

 

[eteb3]

Fwiw, I think this is a prime opportunity for someone to start a cooperative based in Europe: hundreds of businesses are in your position, and you could all share the agency costs (pro rata according to your sales). Coops UK may be interested in having that chat, or you could just reach for their model governing docs.

Or, if Switzerland counts for these purposes (EEA), a Swiss Verein would keep all liabilities with the member companies, but give legal personality overseas: it's a pass-through legal person much used by international law firms.

 

[eteb3]

Establishing a branch or subsidiary in Ireland

When a non-Irish company is setting up in Ireland, a decision must be made regarding the most appropriate legal presence to establish - a branch or a subsidiary company.

www.pwc.ie

 

[IanSuth]

The Belgium province of Wallonia is currently advertising on the radio as being a good place to set up and being able to give advice and grants to non EU companies to make it easy

 

[eteb3]

Yes I've heard good things about Belgian admin, too. Ferociously expensive labour in Belgium (that EU/NGO gravy train distorting the market...). Estonia a much better bet from that pov. That's assuming "customs establishment" requires employment of staff, premises, etc., as I understand it does.

 

[IanSuth]

Found the website after hearing the ad again - http://www.investinwallonia.be/

 

[IanSuth]

Yes I've heard good things about Belgian admin, too. Ferociously expensive labour in Belgium (that EU/NGO gravy train distorting the market...). Estonia a much better bet from that pov. That's assuming "customs establishment" requires employment of staff, premises, etc., as I understand it does.

I know for financial services an EU base requires "effective control of decisions" so you are covered by EU financial regulations as that was part of what my brother was consulting on for firms - how little could they get away with doing to create an EU office for it to count as in the EU

 

[japancool]

I dunno about a services company, but the Netherlands has been on my radar for a while as it has a central location and they speal excellent English.

 

[eteb3]

what my brother was consulting on for firms - how little could they get away with doing to create an EU office for it to count as in the EU

Can you give a thumbnail sketch, without giving away your bro’s trade secrets ?

Fwiw a Swiss-domiciled client of a friend had an absolute ban on directors emailing anything about company policy: they physically flew to Switzerland to discuss in person on the ground, despite not one of them being Swiss.

 

[The Soup Dragon]

I dunno about a services company, but the Netherlands has been on my radar for a while as it has a central location and they speal excellent English.

I was also looking at the Netherlands but , unless I am getting the wrong end of the stick, if you own 5% or more of the shares in a BV, then you have a personal tax liability for your "wages" and you cant declare a no wage situation, it has to be comparable market rate or Euros 56,000 by default. Seems weird.

 

[japancool]

I was also looking at the Netherlands but , unless I am getting the wrong end of the stick, if you own 5% or more of the shares in a BV, then you have a personal tax liability for your "wages" and you cant declare a no wage situation, it has to be comparable market rate or Euros 56,000 by default. Seems weird.

Assuming it works the same way there, my UK Ltd could own the BV, so I personally wouldn't own it.

 

[The Soup Dragon]

Assuming it works the same way there, my UK Ltd could own the BV, so I personally wouldn't own it.

We are looking at this again in some more detail and what we are thinking of doing here ( small manufacturer) is to incorporate in Southern Ireland with UK being the owner / shareholder of that business. Any EU orders will go through the Irish company. The orders will be made up in the UK plant and sold with appropriate discount to the Irish company. They will be shipped to a fulfillment centre in Ireland for forwarding to the customer from there and obviously invoiced from Ireland.

It seems like this will work OK but with an extra day or two for delivery which isn't usually a problem.

We can do this without the need for premises or staff in Ireland.

I think we may well give this a go.

SD

 

[GuyMor]

We are looking at this again in some more detail and what we are thinking of doing here ( small manufacturer) is to incorporate in Southern Ireland with UK being the owner / shareholder of that business. Any EU orders will go through the Irish company. The orders will be made up in the UK plant and sold with appropriate discount to the Irish company. They will be shipped to a fulfillment centre in Ireland for forwarding to the customer from there and obviously invoiced from Ireland.

It seems like this will work OK but with an extra day or two for delivery which isn't usually a problem.

We can do this without the need for premises or staff in Ireland.

I think we may well give this a go.

SD

There are companies that will act as a fiscal representative in the EU. Essentially you will send your order to them, they will send it to your customer. They will clear customs and send you the bill.

 

[The Soup Dragon]

Does anyone have any thoughts / comments on setting up a company in Ireland as either a sister company with the same individual shareholders as in the UK or as a subsidiary with UK ltd being owner thus creating a group?

 

[eteb3]

I’ve researched this and one great advantage is that company law is broadly the same as UK. Plus language. And low CT rate, though that’s changing.

I can’t comment on the complexities of import/export & international tax: guessing they’re the most important issues for you

 

[The Soup Dragon]

I’ve researched this and one great advantage is that company law is broadly the same as UK. Plus language. And low CT rate, though that’s changing.

I can’t comment on the complexities of import/export & international tax: guessing they’re the most important issues for you

Whats important is what is best for the company. I think under a subsidiary model it may be possible to transfer profits from Ireland to UK parent company easily . Maybe easy to transfer plant and equipment too if needed. We arent really planning on taking any money out of the irish company in the first few years.

 

[The Soup Dragon]

I’ve researched this and one great advantage is that company law is broadly the same as UK. Plus language. And low CT rate, though that’s changing.

I can’t comment on the complexities of import/export & international tax: guessing they’re the most important issues for you

One thing that has come to light after much emailing and phoning various people is that you can go through the process of getting a ltd company set up, registered office trading address etc as well as pay a bond of circa Euros 2500 for being a non resident director and after all of that the HMRC in Ireland may well refuse to let you have a VAT number. That would scupper the whole venture and make it a waste of time.

 

[scstock]

Went down the route of setting up an EU branch in Belgium but after much expense (including paying for a professional translation of the company's Articles of Association) we hit a brick wall with trying to get a Bank Account there - nobody wanted to know.

 

[The Soup Dragon]

Went down the route of setting up an EU branch in Belgium but after much expense (including paying for a professional translation of the company's Articles of Association) we hit a brick wall with trying to get a Bank Account there - nobody wanted to know.

Did you try Wise Bank?

 

[Customs Geek]

One thing that has come to light after much emailing and phoning various people is that you can go through the process of getting a ltd company set up, registered office trading address etc as well as pay a bond of circa Euros 2500 for being a non resident director and after all of that the HMRC in Ireland may well refuse to let you have a VAT number. That would scupper the whole venture and make it a waste of time.

It depends on what you want the new company to achieve and whether it is cost effective and makes commercial sense for your business.
Generally you can only get a VAT number if the company is making taxable supplies.

There are also different rules on establishment for different types of tax or regulations.
I don’t know about other taxes but to be considered established in an EU country for VAT and the EU for customs purposes they usually expect there to be substance to the business such as a physical local premises, people and decision making . For customs If it’s just a registration at a virtual office then that is not usually sufficient and you will still be regarded as a non established business.

A non established company can still get VAT registered and usually must register if they are making taxable supplies. The VAT registration threshold in each EU country doesn’t apply.

 

[WRENBRIDGE]

We are considering the requirements for an EC Rep (as a UK business) for food contact products.

In particular, we are considering using a third party, vs. what we understand is a possibility of setting up an EU branch. That would give us the required EU address at potentially a fraction of the cost of some of the numbers we are seeing from third parties.

Has anyone gone down this route? Setting up a company in the UK with a nominee address, etc., is incredibly straightforward and the basic recurring costs (filing, accounts, etc.) are not very much), but I have no experience with the best place of comparability of doing this in the EU.

Thanks for any comments or suggestions.

We recently faced a similar decision regarding our EC Rep requirements. After extensive research, we decided to set up an EU branch instead of using a third-party service. The cost savings were significant, and it provided us with more control over our operations.

Setting up a company in the EU is indeed comparable to the process in the UK, though it varies by country. We found Ireland and the Netherlands particularly business-friendly, with straightforward registration processes and reasonable ongoing costs. In Ireland, for instance, the process was relatively smooth, with clear guidelines and support available for foreign businesses.

If you choose to go this route, make sure to thoroughly understand the local regulations and tax obligations. Additionally, partnering with a local legal or accounting firm can help navigate the initial setup and ongoing compliance requirements.

While it does require an upfront effort, setting up an EU branch can be a cost-effective and practical solution for fulfilling EC Rep requirements. Good luck with your decision!

 

[The Soup Dragon]

We recently faced a similar decision regarding our EC Rep requirements. After extensive research, we decided to set up an EU branch instead of using a third-party service. The cost savings were significant, and it provided us with more control over our operations.

Setting up a company in the EU is indeed comparable to the process in the UK, though it varies by country. We found Ireland and the Netherlands particularly business-friendly, with straightforward registration processes and reasonable ongoing costs. In Ireland, for instance, the process was relatively smooth, with clear guidelines and support available for foreign businesses.

If you choose to go this route, make sure to thoroughly understand the local regulations and tax obligations. Additionally, partnering with a local legal or accounting firm can help navigate the initial setup and ongoing compliance requirements.

While it does require an upfront effort, setting up an EU branch can be a cost-effective and practical solution for fulfilling EC Rep requirements. Good luck with your decision!

Did you set up an EU entity?