Exporting to Europe

Updated: Sep 6


Export businesses are more productive and more resilient to change. Creating demand for your goods or services outside your domestic market is a recipe for growth. However, there are hurdles to overcome.

The first of these is language, followed by culture. Doing business with our Anglo-Saxon cousins on the other side of the planet seems natural to us because we share the same language and a similar culture. However European markets practically on our doorstep often feel outside our comfort zone.

Once you take a closer look at these markets you will probably realise this needn’t be. The business world speaks English, so any European company involved in cross-border trade will also be able to communicate sufficiently in our native tongue.

As far as the cultural differences in Europe are concerned simply think of the UK’s regional diversity; despite different accents, traditions and habits people from central London can easily trade with people in the Scottish Highlands. The cultural diversity in Europe might be more distinct, but the principle remains the same.

Post-Brexit

You might think trading with our European neighbours post-Brexit will be an unattractive proposition. Yes and no. Yes, we can expect increased paperwork, processing time and costs. Will you be affected by this? No, not necessarily. You can now benefit from specialised services that allow you to legally ‘remain’ in the EU while physically staying in the UK with hardly any disruption to your everyday business.

In essence, the concept is to replicate the strategy of multinational corporations, by establishing foreign subsidiaries. Due to their limited resources SMEs have been excluded from this option – until now. The modern digital environment enables even micro businesses to have an EU representation established and ‘hosted’ by service providers.

Benefits

What are the benefits and how does it work in detail? Let’s say you already run a successful business that sells goods to customers around the world. To stay competitive, you may well be wondering how you can replace the membership of a trade bloc with 28 countries and around 80 trading partner nations by 2021. Needless to say, this is impossible!

HOWEVER, there is a way to circumvent the new trade barriers. This can be done by establishing a legal EU representation, i.e. setting up your own company in Europe. And by outsourcing most of your European operation to service providers you can stick to what you do best; selling your goods.

Monitoring and managing

How do you monitor and manage your EU business? For goods distribution, the service offer should include a cloud-based management system that shows all stock and currency movements in real-time and allows you to manage them. You should also use direct communication channels via phone or Skype. However, most processes, particularly in e-commerce sales, can be automated today, so after an initial implementation period the system should run self-sufficiently for the most part. The same applies for selling services, albeit most systems need to be specifically designed due to the complexity of the service industry.

What about taxes?

Tax payments apply in any jurisdiction in the world. To save businesses from having to pay their taxes in two or more countries, nations have so-called double-taxation agreements in place. The UK also has bilateral agreements with EU countries, which will not be affected by Brexit. In short, by paying your foreign taxes for your EU business you can transfer all foreign funds to the UK tax-free.

For more information on trading from and to Europe please get in touch.

Trade with Europe Ltd helps UK businesses to export. Our cross-border services include a network of service providers, such as fulfilment warehouses , e-commerce specialists, accountants, lawyers, etc. in the UK, but also in the Netherlands and Germany. We also offer readymade solutions for UK businesses to legally trade in the EU, even after Brexit.

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