Launching a business-project in European space is realizing invested capital with maximum benefit. It makes a European company registration an appealing choice for launching a business-structure.
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Let’s look at the privileges and features of establishing a business-project in these jurisdictions, states offering a perfect commercial basis, and how to launch a business abroad.
Our team is ready to help you with European company registration, as well as demonstrate a lot of other services, particularly, trademark registration, consultations on necessary aspects, and much more.
Introduction to The Evolving World of Company Formation in Europe
Every jurisdiction has its own norms and standards regarding European business registration.
To launch an EU organization, a foreigner must register a legal entity with local authorities (countries and responsible government authorities vary by state), obtain a tax identification number, and register with the relevant social security office.
Additionally, businesspersons may be needed to be members of a chamber of commerce or other business-governing organization.
European Company Registration – Overview of the Process
If you decide setting up a company in Europe, you should bear in mind next-mentioned: procedure for starting a business-project will differ and have certain peculiarities that depend on the country you choose.
Remember that implementing European corporate registration, you might be needed to provide additional documentation, but you definitely prepare next-mentioned:
- civil passport and its copy, as well as the beneficiary’s foreign passport;
- proof of the beneficiary's place of residence (for example, a utility bill);
- proof of solvency required to open an account with an EU bank.
Company incorporation in Europe involves a series of standardized steps being common to all European jurisdictions. Businesspersons intending to launch a business-project in this region must carefully follow these prescribed procedures.
- Selecting the firm’s main commercial direction, a suitable form of doing business-activities, as well as the name of the organization.
- Selection and rental of a legal address in the country chosen by entrepreneur.
- Formation of constituent documentation taking into account normative points of the legislation of a particular EU country. The company’s Statute must indicate: denomination, form of doing business-activities, legal address, co-founders and directors with their personal data, and amount of initial capital.
- Opening a temporary bank account into which you need to deposit initial capital. Amount depends on the country in which the decision was made to open a business-project.
- Signature of documents by participants. Setting a business-structure in EU also requires notarization of these documents.
- Creating company’s main bank account and starting commercial deals.
Benefits and Challenges of European Company Registration
Obtaining a European company registration has many benefits, including next-mentioned:
- low tax burden: there are various regimes and privileges helping minimize tax risks;
- the opportunity to avoid paying double taxes in some jurisdictions: thanks to agreements between states, businesspersons who managed to open a company abroad often avoid double taxation of their income, but not so long ago, several other jurisdictions suspended tax agreements with a number of EU jurisdictions;
- progressed economical environment: businesspersons have access to a wide range of tools and services that allow them to effectively manage finances, ensure liquidity, and gain access to credit resources;
- foreign account: gives access to European banking systems, which are distinguished by a high level of service, security and confidentiality;
- solid economic systems: this creates lucrative basis for business-project progress;
- prospects for obtaining commercial visa or residential permit: there’re programs enabling businesspersons to get several types of visas or residence and job permissions;
- access to global commercial community: launching a firm abroad allows you to enter European market-space, which is one of largest and mostly-developed in the world. Businesspersons can find new clients and partners, expand the geography of their business-project and increase its profitability;
- prestige: the desire to set a firm is connected with high-quality products and services, innovation and social responsibility. You can always use this fact to improve the company’s image and attract new clients or investors.
But there are certain difficulties that should be borne in mind when deciding to obtain a European company registration process, and these will be elaborated upon in the subsequent sections.
- Availability of initial capital. Some jurisdictions require a foreigner to confirm that he has enough money to develop his own business in the EU. Some European Union states impose a condition for the payment of initial capital in full when setting a firm.
- Tax codes and issues of their compliance. Creating a legal entity abroad involves studying peculiarities of taxes, pan-European and regional commercial rules. For example, in some countries, getting an open office for more than 6 months may require the entrepreneur to file an income tax return before the specified period, and failure to do so will result in a fine.
- Business licenses permits. Businesspersons should familiarize themselves with the standards and rules for foreigners running business-activities. There’re most common permits that all businesses need. Without their registration, a businessman risks incurring administrative or criminal liability.
A comparative analysis of various countries for company incorporation in Europe considering ramifications of Brexi
Let’s compare several countries with an ideal basis for European company registration.
1. United Kingdom
Although England has already left the European Union, it is still an extremely prestigious jurisdiction. The UK isn’t offshore, but the process of establishing a firm online takes only a few days.
The enterprise can be managed remotely, which makes running a business much easier. For those considering launching an organization in the UK, you’ll be pleased to know next-mentioned: this country does not have strict normative rules for initial capital, and for shareholders and the board of directors. One person who performs the functionality is enough.
2. Malta
Launching a firm there needs no more than two weeks. To establish a business-project in Malta, you must pay a commission fee, calculated depending on the organization’s category and its initial capital.
For each form of enterprise, initial capital and minimum possible composition of the organization (from two people) are prescribed. Place at least 20-25% of initial capital. Documents may be sent online, which greatly simplifies the process of firm’s opening.
3. Denmark
It has the second most competitive economy worldwide. Establishing a business-project there has 3 main privileges: lucrative geographical location for trade in Northern Europe, developed infrastructure and highly qualified specialists who speak two languages (Danish and English).
Setting up a business on Danish soil can be done in a matter of hours and at very low cost, and once registered, firms find themselves in a corporate hub with quick access to other developed markets.
With established R&D practices, particularly in the energy sector, Denmark is also an ideal place to develop new products and stimulate innovation, but without the right legal advice, getting the most out of a business venture can be challenging.
4. Lithuania
One of the main advantages is the possibility of remote firm establishment. It essentially saves time and money sources, which can be used for business-structure progress. In addition,
Lithuania levies a relatively small VAT, which ranges from 18%. It’s an attractive factor for many companies that seek to increase the competitiveness of their products or services.
Of course, the final choice for obtaining a European company registration depends on many factors and individual conditions of each business-project.
Article’s author is Denys Chernyshov – CEO and founder of the worldwide-famous organization Eternity Law International.
