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Estonian E-Residency to Sell on Amazon in Europe

In this digitalized world, it is certainly clear that our shopping habits has gained a new dimension. We can purchase anything we want through e-commerce which made shopping much faster and easier. At this point, there are many e-commerce online retailers known worldwide. Amazon FBA is one of them.

There are so many internet sellers thinking of entering Europe with Amazon FBA. Why?

It is easy to enter Europe with Amazon FBA, like the FBA program of Amazon in the U.S. You can access millions more online shoppers in the European market. Plus, it will be five separate marketplaces such as Germany, Italy, France, UK and Spain and you can ship to more than 25 countries around Europe through one central account.

You should note that European market has more than 300 million online buyers and the market has a big potential to grow. You can still find many high-volume niches that aren’t competitive since Amazon EU is considerably less saturated with products.

If we talk about the major challenges facing Amazon sellers entering the European market, there are a few factors such as:

  • The complexity of EU VAT regulations,
  • Difficulties finding the right country to incorporate,
  • Issues regarding the high incorporation costs,
  • Large amounts of bureaucracy

What is “VAT”?

Value Added Tax, known as VAT, is a general, broadly based consumption tax applies to goods and services that are bought and sold for use or consumption in the European Union. There are some requirements as a seller: First, collect the current VAT from the buyer at the point of sale. Secondly, you must forward the VAT payment to the revenue authority of relevant county on certain dates.

To give an example, your firm must have a VAT number in Spain, if you want to keep your products in an Amazon Spain store.

If you want to store your products in 7 European countries where Amazon’s warehouses are located, your company must receive VAT numbers from each country. In addition, your company needs an EORI number in the country where you import your products first to be sent to the Amazon store.

The process continues with the monthly / quarterly (three-months) VAT applications where the products are kept after receiving the VAT and EURI numbers. To do this, you should find local financial advisors helping firms to fill their VAT returns regarding the related countries and track the thresholds of the sales where the products are sold and recognize the sellers get a VAT number in these countries in case their sales exceed the VAT thresholds.

These processes may be so complicated for most sellers, and it would be a reason to not expand to Europe marketplaces.

So, let’s list the requirements to sell on Amazon in Europe with FBA program;

  • Register a company in Europe. You can check the listed countries where Amazon supports through the link below:
  • Obtain a VAT number, for each country in the Amazon warehouses where the goods will be stored.
  • Monthly / quarterly VAT declaration/filing in the country where the VAT number is located.
  • Accounting and tax compliance where the company is registered and to handle them.
  • To receive money and transfer funds, the accession of business banking solutions.

How can e-Residency help you?

 You can easily form your European based firm with your digital ID card through the Estonian e-Residency program. This digital Estonian ID card is 100% online and secure, you can set up your business from anywhere in the world.

Estonian e-Residency card costs only 100€. After your application, it is sent to the nearest Estonian Embassy in your home country. Also, if you become an Estonian e-Resident, you will not be the Estonian tax resident directly.  

Advantages of running an Amazon FBA in Europe with your Estonian company:

  • You can form a company in Estonia in a cheaper way than most of the other EU countries.
  • Thanks to its online state system, you can easily access registration files of your company and monitor them with a large amount of transparency.
  • There are no paperwork, bureaucracy or local managers who have control over your company.
  • You can manage your company remotely via digital signature.
  • When it is compared to other EU countries, Estonia has lower costs of administration.
  • There are many entrepreneurs having the same state of mind with the aim of engaging and sharing valuable information mutually. You can grow your company engaging with these brilliant e-resident community.
  • You can easily access to online banking solutions through your e-Residency card and open lots of bank account in multiple currencies.
  • Private Limited Company’s shared capital payment is only 2,500€ and you are not required to pay when you first start off.
  • 0% corporate tax on non-distributed profits in case of owing taxes in Estonia.

Estoniainc may help you registering your company and manage accounting and VAT registration of your company in Estonia. Besides, we may also fulfill other VAT obligations to be made in other European countries through our network of partners.

e-Residency is a bridge for us to expand in the EU for e-commerce business owners. We are always working to improve our services to help different areas in the e-commerce industry.

You want to sell on Amazon in Europe with FBA program, and yet, you do not know where to start? Then, e-Residency can be the answer of this question.

If you want to take a step on this issue, please do not hesitate to contact us!


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