EU subsidiary for ecommerce and b2b business with foreign director

[Mike Forman]

What are the options to open a subsidiary for a non EU corporation that allows a foreign director and that is suitable for ecommerce as well can open a local bank account . No staff would be employed in that country.

We have experience with running a local business in EU and local directors and staff, but would want to set up a subsidiary that is controlled abroad by its head office.

The requirements are :

- EU subsidiary of non EU corporation, preferable in a Western EU country such as BL, FR, DE,..
- suitable for selling on the main ecommerce channels as well as B2b sales in EU
- VAT registration, representation and reporting is not a discussion topic in this case, the branch office will be fully compliant reporting vat and local corporate tax filing
- Foreign director is a non-EU resident with a EU passport, no local staff (not initially at least)
- requires a local bank account
- does not require a physical address but this might be a requirement to establish the subsidiary, to open an ecommerce channel as well a bank account since they require an address proof/physical office. Preferable a virtual office nonetheless since their will be initially no staff.

 

[Sols]

Do you have an existing relationship with a bank that also has a presence in EU? Can you leverage that relationship to open a new bank account? Local bank account is a dealbreaker in nearly all cases. Not impossible, but if you can make do with an EMI you have more options.

If you want western/mainland EU, I'd look into Netherlands and Luxembourg. Tend to be easier options than France, Germany, Belgium, and so on. Local banking is very difficult without a resident director and/or local staff. A virtual office might help but isn't exactly considered much of a presence if there's no one there working.

If you start with EMIs, you can approach the banks when there's significant volume running through the accounts and/or you have built up a presence.

 

[Clearsky Network]

What is the company activity? Ecommerce is a very broad statement.
You can open a "payment agent" EU company (Cyprus could be a good option). Basically the EU company will have no activity except collecting funds from clients.
Where is the UBO from?
I doubt you will be able to open a physical bank account, but EMI will not be a problem as long as the activity is transparent and legal.
feel free to get in touch, will help you with subsidiary company and the EMI account set up.

 

[Mike Forman]

What is the company activity? Ecommerce is a very broad statement.
You can open a "payment agent" EU company (Cyprus could be a good option). Basically the EU company will have no activity except collecting funds from clients.
Where is the UBO from?
I doubt you will be able to open a physical bank account, but EMI will not be a problem as long as the activity is transparent and legal.
feel free to get in touch, will help you with subsidiary company and the EMI account set up.

A company functioning as a payment agent won't work as the company will register accounts on major ecommerce platforms as Amazon, hence it will be required to report sales and vat. Amazon also requires address proof.

Cyprus is not a reputable jurisdiction to register ecommerce accounts and b2b business, we already own Malta companies.

 

[baio12]

A company functioning as a payment agent won't work as the company will register accounts on major ecommerce platforms as Amazon, hence it will be required to report sales and vat.

Payment agent doesn't report sales and vat?

 

[Mike Forman]

Payment agent doesn't report sales and vat?

Any company registered and selling on an ecommerce platform is not a payment agent but a sales company, which shall import the goods, have an EORI number, vat numbers and declare vat on the sales of each EU country either per country or through OSS.

 

[baio12]

Any company registered and selling on an ecommerce platform is not a payment agent but a sales company, which shall import the goods, have an EORI number, vat numbers and declare vat on the sales of each EU country either per country or through OSS.

Payment agent will collect the vat from customer and send it only to the sales company but declaring it and sending it to the EU will be responsibility of sales company?

Payment agent doesn't need vat number for their business?

 

[Mike Forman]

Payment agent will collect the vat from customer and send it only to the sales company but declaring it and sending it to the EU will be responsibility of sales company?

Payment agent doesn't need vat number for their business?

As stated before, this setup doesn't work, anyone having experience in VAT rules and or ecommerce platforms knows that.

It is important people give correct advice here on this forum, as sometimes it seems they make it seem easy to set up a structure and pretend it is legal.

Hence my question was directed to anyone having experience with such a branch setup and ecommerce.
Assuming one can use a payment agent is something you could get away with 5 years qgo, if no authority would have checked you, since the setup would be still considered fraudulent by any local VAT authority.

Selling online on ecommerce platforms you are required to provide the company details with address proof, bank details with exact matching company name and address proof, vat numbers in all country selling with matching company name and address proof.

 

[baio12]

Ecommerce company would create sales company subsidiary which has to register for VAT. Ecommerce company will invoice sales company for what the goods was sold for less some small profit margin for the sales company?