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eCommerce people: where are you incorporated? (6)

05-23-2017 12:16 PM #1 thebst (Member)
eCommerce people: where are you incorporated?

Where is your business incorporated and why? I'm based in Europe and apparently if I want to sell in EU is gonna be a massive headache to deal with each country VAT, etc.

05-23-2017 01:09 PM #2 manu_adefy (Veteran Member)

Also based in Europe but not selling in Europe, doing dropshipping.

If you want to sell within the EU, my advice is to talk to a tax consultant - depending on the items you are selling, where you are selling from, etc. you will get many options which you have to compare.

05-23-2017 02:10 PM #3 cbrughmans (Member)

if you are based in Europe, you need to charge your users VAT, no matter where the buyer/consumer is located. Your shop is legally located in Europe and hence has to charge VAT to its customers. So that will absolutely KILL the conversion as suddenly your products become 19-21% more expensive to the user (or you cut your margin with that % which will make it not ROI attractive).

Long story short. if you want to be succesful in the ecomm space, you need to be based outside of the European Union.

05-23-2017 02:23 PM #4 manu_adefy (Veteran Member)

http://europa.eu/youreurope/business...r/index_en.htm

Selling
If you sell goods to customers outside the EU, you do not charge VAT, though you may still deduct the VAT you yourself have paid on your related expenses (goods/services bought in specifically to make those sales).

05-23-2017 02:38 PM #5 thebst (Member)

Quote Originally Posted by cbrughmans View Post
Long story short. if you want to be succesful in the ecomm space, you need to be based outside of the European Union.
I have arrived to pretty much the same conclusion. Either that or don't sell to EU countries at all.

I would love to know what's a good jurisdiction to incorporate though, considering that bank accounts, Paypal, merchant accounts, etc. are necessary.

05-23-2017 02:42 PM #6 manu_adefy (Veteran Member)

How big are you already? How much do you want to risk? Most such setups, where you incorporate somewhere else than your country of residency require a hefty upfront investment - so big that you might consider importing and not doing dropshipping. You don't get rid of VAT completely but you will have an easier time managing it and you gain a huge advantage when it comes to shipping costs, times and customer satisfaction on that front.

Good countries nowadays seem to be Hong Kong, Singapore, UAE. This is purely popularity, I don't know exact details of what makes the countries great and how they can do business within the EU.

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