How to sell on Amazon in Europe – Legal Issues

Developing your business to sell on Amazon in Europe opens up great potential, giving you access to a large customer base and potential growth. However, before embarking on your e-commerce journey, it is essential that you analyze the legal framework and ensure that you meet the various legal requirements. This article will guide you step-by-step through the process of selling on Amazon in Europe, focusing on critical legal considerations such as business registration, VAT, EORI and other relevant regulations.

1. Choosing the Marketplace

The first step before selling on the EU market is to choose the place in the European Union where you want to start trading your goods. Amazon offers several alternatives, including Amazon UK, Germany, France, Italy, Spain and others. Each marketplace has its own rules and legal conditions that you need to familiarize yourself with before proceeding. Conduct thorough research to find out the specifics of your chosen market. Then start with your home market and expand to other EU markets later.

2. Fulfillment options: FBM and FBA

There are two primary fulfillment alternatives for merchants looking to trade on Amazon: Fulfillment by Merchant (FBM) and Fulfillment by Amazon (FBA). With Fulfillment by Merchant (FBM), you have to take care of the storage, packaging, and shipping of your goods, while with FBA, Amazon takes care of these tasks in your stead.

Before making a decision, analyze the pros and cons of each option. FBM gives you more control over the fulfillment process, but requires extensive logistics and operations management. On the other hand, FBA offers convenience and access to Amazon's huge customer base, but you relinquish control over warehousing and shipping. For a more detailed understanding of Fulfillment by Amazon (FBA), including its benefits and how it works, see this article.

In addition, it is often advisable to bring in a local logistics partner to either handle FBM processing or act as a preparation center for FBA. This collaboration ensures efficient order fulfillment, compliance with local regulations and an overall smoother sales experience. For example, Fulfillment-Box provides 3rd party logistics services to e-commerce companies and has a network of warehouses in Europe, particularly in Germany, Poland, Austria and Spain.

3. Company registration and VAT registration

If you dare to sell on Amazon Europe , you need to legally register your business in the countries where you want to operate. This process includes setting up a business and registering for value-added tax (VAT).

First, carefully consider which legal form is best for your business, such as a limited liability company (LLC), sole proprietorship, or partnership. The conditions for registration vary from country to country, and it is important to know the rules and procedures of each jurisdiction.

Once you have established your business, the next step is to obtain a VAT identification number. VAT is a consumption tax on goods and services in the European Union. Every entrepreneur is responsible for collecting VAT from buyers on eligible transactions and paying it to the relevant tax administration.

The conditions for VAT registration vary from one EU country to another, but usually require the submission of an application along with the necessary documentation, such as proof of business establishment, identification documents, and sometimes financial statements. It is important to seek advice from legal and accounting professionals who specialize in cross-border e-commerce to ensure compliance with local VAT regulations and to accurately manage the registration process.

Filing VAT returns brings several benefits, including increased credibility, improved competitiveness, and access to VAT benefits, such as VAT refunds for eligible business expenses. It also allows you to comply with your tax obligations and ensures smooth operations when selling in the EU market. It is important to note that VAT rates vary between EU countries, and you will need to find out the appropriate tax rates for the goods you sell. In addition, it is important that you keep accurate records, issue proper VAT invoices, and file regular VAT returns according to the guidelines of the country in which you are registered for VAT.

By carefully setting up your business and acquiring VAT registration, you lay a solid foundation for your Amazon business in the EU. Working with legal and accounting experts ensures compliance with national laws and regulations and facilitates smooth financial operations while you navigate the complex landscape of VAT taxation.

4. EORI Number and Customs Compliance

Before you sell on Amazon in the EU , it is essential that you apply for an EORI (Economic Operators Registration and Identification) number. This special identifier is mandatory for customs declarations and enables the smooth cross-border movement of goods.

To obtain an EORI number, you must contact the customs official in the country where your company will operate. When applying, you will usually need to provide complete information about your company, including company details, trade activities and the EU countries you intend to trade with. The EORI number plays an important role in ensuring compliance with import and export directives and speeding up customs formalities. With an EORI number, you will be able to clear customs smoothly and avoid unnecessary delays or complications when shipping goods internationally.

Customs compliance is critical to avoid penalties, seizures or disruptions in your supply chain. It's important to accurately declare the type, value and origin of imported or exported goods and to comply with any licensing or permit requirements for specific goods.

In addition, customs representatives may conduct inspections or request additional documentation, such as commercial invoices, packing lists, certificates of origin, or permits for restricted or regulated goods. By keeping your records organized and ensuring customs compliance, you can avoid potential problems and ensure a smoother trade process.

It's worth noting that customs rules can be different among EU countries, and it's essential to familiarize yourself with the specific requirements of each jurisdiction where you plan to operate. Partnering with customs brokers or freight forwarders experienced in international trade can be beneficial, as they can provide guidance on customs compliance, assist with documentation, and handle customs clearance procedures instead of you.

Securing an EORI number and complying with customs regulations will help you manage the complexities of cross-border trade more efficiently, minimize disruption, and earn a reputation for compliance and reliability in the EU marketplace.

Remember to keep up to date with any changes or additions to customs regulations, as they can have a significant impact on your business. By working with professionals who understand international trade and customs procedures, you can ensure you are compliant and successfully navigate the complicated customs regulations.

5. LUCID/CITEO Registration and Extended Producer Responsibility (EPR)

If you intend to trade in Germany or France, there are additional legal requirements specific to these countries.

In Germany, traders are required to register with LUCID. LUCID is a packaging register established on the basis of the Packaging Act (VerpackG). Registration with LUCID is mandatory for companies that place packaging on the German market. By registering with LUCID, you fulfill your obligations under the Packaging Act and ensure proper disposal of packaging materials. In France, sellers must also register with CITEO, an organization responsible for managing packaging waste. Registrations with LUCID and CITEO ensure compliance with extended producer responsibility (EPR) with respect to packaging waste.

These country-specific registrations are essential to comply with regional environmental regulations and to meet your responsibilities as a manufacturer or distributor of packaged goods in Germany and France.

Fulfillment-Box offers assistance with LUCID registration , for those intending to trade in Germany and with CITEO registration if the chosen marketplace is France.

6. WEEE Number Registration (Waste Electrical and Electronic Equipment)

If your goods fall within the scope of the Waste Electrical and Electronic Equipment (WEEE) Directive, you are expected to apply for a WEEE number. The WEEE Directive aims to ensure the proper treatment and recycling of waste electrical and electronic equipment in the European Union.

To find out if your goods need a WEEE number, check if they fall under the categories listed in the directive. If so, contact the relevant authorities in the EU country where you intend to trade for assistance in obtaining a WEEE number and complying with WEEE regulations.

As an expert in e-commerce, Fulfillment-Box also offers advice and assistance in obtaining the WEEE registration number.

Conclusion

As you set out to sell on Amazon in Europe, it's important to understand and follow the legal considerations and terms outlined in this article. By choosing the right marketplace, understanding fulfillment options, registering your business, acquiring a VAT and EORI number, and meeting country-specific obligations such as LUCID/CITEO registration and WEEE compliance, you will create a solid foundation for your business. Remember to consult with legal, accounting and logistics experts to ensure compliance with ever-changing regulations. By balancing legal requirements with other important aspects such as product analysis, marketing and customer service, you can build a successful and sustainable Amazon business in Europe.