This website uses cookies to ensure you get the best experience. Please read our policies for more information.

10 Chartered Accountants

News

Do I need to set up an EU subsidiary?
08 April 2021

“Should I set up a company in the EU” is among the most common questions we receive now that the UK has left the single market.

However, the answer isn’t always as straightforward as yes or no. There are both advantages and disadvantages to registering a company in the EU.

What is an EU subsidiary?

An EU subsidiary is a company belonging to you, but registered in the EU for VAT and customs purposes. You usually only need one EU subsidiary, but there is no limit to the number you can set up.

Why should you set up an EU subsidiary?

If you commonly move goods across the EU, an EU subsidiary may help you bypass new customs processes established after the UK left the EU earlier this year.

This is because an EU subsidiary is considered a European company and is, therefore, assumed to follow EU rules and regulations when manufacturing or trading products. This means less paperwork for you.

Do note, however, that goods moved between the UK and the EU (including Northern Ireland) are still subject to the new customs processes, regardless of whether you have an EU subsidiary or not.

Why shouldn’t you set up an EU subsidiary?

Setting up an EU subsidiary is costly. You may have to pay for new headquarters and staff and take on additional administrative duties.

That said, the benefits of doing so may outweigh the time and financial investment.

How do I set up an EU subsidiary?

To set up a new company, you will need to acquire a registered address in the EU country of your choosing and create a company with the local business department

Get expert advice today

For help and advice on related matters, please get in touch with our team today.

Other recent news

What are the implications of MTD for ITSA for SMEs?
22 March 2024

The introduction of Making Tax Digital for Income Tax Self-Assessment…
Read more

The Employment (Allocation of Tips) Act 2023 – Understanding the impact on pay in the hospitality sector
22 March 2024

In a significant development for the hospitality industry, the Employment…
Read more

Economic Crime and Corporate Transparency Act 2023 – Companies House changes now in effect
22 March 2024

The initial provisions of the Economic Crime and Corporate Transparency…
Read more

Run your business from home? Get to know your VAT entitlement
22 March 2024

If you are a business owner and work or run…
Read more

Holiday accrual to come in for zero-hours workers
22 March 2024

Following changes to the Working Time Regulations 1998 in January…
Read more

»

Case Studies