If you are a US Amazon seller and want to grow your business by selling on the European Amazon Marketplaces or if you aren’t yet an Amazon seller and want to start your journey in Europe right away this article is for you.
Some of the most frequently asked questions might be:
- In which country do I set up my business?
- Where do I send my inventory to?
- Where do I pay taxes?
Don’t worry, we’ve got you covered.
In which country do I set up my business?
Even if you are already having a business in the US, it might be a good idea to open an EU business for various reasons.
One of them is the fact that customers appreciate local businesses more than foreign ones.
Setting up an LTD (equivalent with an LLC) in the UK is recommended.
Here is why:
- There is no language barrier.
- Storage costs in UK FBA warehouses are a fraction of what they are in other EU countries.
- Amazon’s EFN (European Fulfillment Network) allows you to sell your products on all European Amazon marketplaces while storing in only one of the relevant countries.
Disclaimer: The above information is valid today (13.07.2017) as any future consequences and changes following Brexit haven’t occurred yet. This might change in the future.
Where do I store my inventory?
The above section hints to the answer to this question.
It is highly recommended (at least in the beginning) to store your inventory in the UK or in the EU country where you have registered your business, to keep it simple and organized until you learn, in what other country it would make sense to send inventory. The best way to know is by looking at the sales in each country.
Where do I pay taxes?
There are different kinds of taxes which have to be paid. Now I will talk specifically about VAT (value added tax). Regarding the other taxes, I recommend you to talk to your accountant.
- VAT has to be paid first in foremost in the country where you have registered your business and where you stock your inventory.
- If you send inventory to other European Amazon countries then you are automatically required to register and file for VAT in that country.
- Pan-European FBA NETWORK enables you to sell across Europe by PLACING YOUR inventory closer to your European customers, and fulfilling and delivering orders at lower costs and in less time. You send your products to an Amazon fulfillment center. Amazon will use their knowledge of customer purchase trends, they then allocate your inventory across their fulfillment centers throughout Europe (UK, Germany, France, Italy, Spain, Czech Republic, Poland) to meet customers’ future demands. This will REQUIRE YOU TO REGISTER FOR VAT in every country AND FILE PERIODICALLY, where Amazon stores your inventory. You will only pay local fulfillment fee when selling in any of Amazon’s European marketplace.
- VAT has to be paid in all countries where the VAT threshold or distance selling threshold is reached.