How to set up a business entity in Europe | finder.com
How to set up a business entity in Europe

How to set up a business entity in Europe

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To set up a business in Europe, choose the right country, the right entity and the right liaison.

European countries have huge consumer bases – even the poorest European countries tend to be wealthier than countries in other continents. If you’re looking to expand your business internationally, Europe’s consumers could make it worth any potential difficulty.

While starting a business in Europe can be tricky, with the right knowledge and expertise, you can successfully incorporate your business and operate it in one of Europe’s 48 countries.

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What kind of entity makes sense?

Generally, Europe does not impose any specific requirements on foreigners wishing to establish a business presence in the country.

Foreign investors looking to do business in Europe have three common entities to choose from: corporation subsidies, representative offices and branch offices

Corporation subsidies

Forming your business into a corporation so you can expand into Europe makes sense for larger, well-established companies. You’ll find a lot of variations in European law when it comes to corporations, so make sure to look into the specifics of the country you want to expand into.

Representative office

Representative offices in Europe can be ideal for spreading the word about your company. But a representative office can’t carry out any sort of business transaction on behalf of its parent company.

Branch office

Setting up a European branch office is relatively inexpensive – plus, you can still make money (unlike a representative office) while maintaining branch independence. Your branch can be registered in whatever company it operates in but must follow the local laws of its parent company.

Should I hire a professional?

Hiring an expert to help guide you when establishing your business in a new country is an excellent idea. If English isn’t the country’s primary language, consider hiring a native speaker. A liaison can interact with officials on your behalf, tell you the appropriate places to register your business entity and advise you on any important local customs.

The Chamber of Commerce and US Commercial Service are solid places to search for a qualified contact.

What kind of documentation will I need?

To start a business in Europe, you will generally need to produce:

  • Certificates of incorporation
  • Bank reference letters
  • Passport copies
  • Resume and photos
  • Description of the scope of your business
  • Description of the purpose of your business and reason for expanding
  • Business license
  • Lease contracts of country address

The exact documentation you need may change based on the country you’ve chosen and the official you speak to. Consult your foreign liaison, and consider working with a company that helps foreign entrepreneurs create businesses in Europe.
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Where do I file my information?

You’ll submit your business documentation to the Chamber of Commerce in the specific country you’re interested in. It’s a good idea to follow up after filing to ensure that your paperwork is in the right place and given proper attention.

Other factors to consider

Every European country specifies different requirements for you and your business to meet before incorporating. Confirm the stipulations specific to the European country you want to expand your business into.

  • Stating your business purpose. You’ll need to draft and execute a public deed of incorporation that documents your business’s bylaws and includes your company name and address.
  • Corporate name requirements. Many European countries won’t allow two companies with the same name to operate simultaneously. Pick a name that represents your company, and register it as quickly as you can. You may also need special permissions to use certain words. For example, in Italy you need approval to use words like Italy and international in your business name.
  • Permits and licenses. You’ll need specific permits and licences from the federal, provincial or municipal governments, depending on your location, as well as the industry sector and specific activities that you plan to conduct.
  • Available resources. Certain European countries require that you provide proof that you have enough money to fund your business.
  • Hiring locals. It’s not required by every European government, but some countries require that your business create jobs for locals. For example, the UK requires that your business create two new full-time jobs for UK residents or citizens.
  • Registering with the governing business organization. Some European countries expect foreign business owners to register with the governing business organization — like a Chamber of Commerce — to incorporate their business.

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International billing and payments

Your new business will require you to make and receive international payments, which means you’ll make transactions between currencies and across borders.

You can safely and affordably manage your business payments — with lower fees and stronger exchange rates — by comparing the services of a money transfer specialist.

Use a money transfer service to manage your international business payments

Companies like WorldRemit and OFX can help you set up regular transfers to your vendors overseas.

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Bottom line

Choose the right business entity to operate in the specific European country you’re interested in. Consider working with an organization that specializes in helping foreign businesses incorporate in the country — this will streamline your progress and help you avoid pitfalls along the way.
US Dollar to Euro exchange rate

Frequently asked questions about European businesses

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