Trading in the EU

The 27 countries of the European Union are a huge market of potential customers and suppliers for your business. This market can be easier to access than other overseas markets

Guide

5 min read

1. Disclaimer

This guide contains information relating to the EU that may be out of date due to Brexit. We are working to update our guidance as the situation unfolds. For urgent assistance please contact your local Business Gateway office or visit https://www.prepareforbrexit.scot/.

2. Overview

Trading practices, regulations and standards often apply throughout the EU. Many key tasks have also been simplified to help trade within the EU. If you meet UK requirements, you will generally meet requirements throughout the EU. This means that most shipments can be dispatched to other member states of the EU without special customs documentation.

Some of the measures which EU countries have introduced to make it easier to trade with each other include:

  • Reduced bureaucracy and paperwork - for example, trade with the EU can be recorded on your VAT form in the same way as any of your sales and purchases in the UK.
  • Harmonised standards - EU-wide technical and safety standards ensure that if you meet UK standards you'll also meet the standards of other EU countries.
  • Movement of people - UK citizens have the right to travel, live and work in any EU country. You can also employ EU citizens to work in the UK.
  • The euro - has reduced the currency problems faced by businesses trading in euros between Eurozone countries.

Scottish Development International offers support on exporting from Scotland. You can also get help with trading in Europe from Enterprise Europe Scotland.

3. Research EU markets

Before you start trading in the EU, you'll need to look at your business needs and consider whether trading with other EU countries will benefit your business. For example:

  • Would your products or services fill a niche in the market?
  • Would they be competitive?
  • Are there opportunities to find materials or components of higher quality or at lower prices?

You'll need to carefully research individual countries. Identify their official languages and specific social, cultural and business practices. You can research the markets of EU countries in different ways including:

  • the internet
  • telephone surveys
  • email questionnaires
  • buying off-the-shelf reports on your market sector
  • commissioning a market research agency in your chosen country
  • reading published marketing information about competitors in your chosen country
  • reading newspapers and trade magazines

UK Trade & Investment publish regularly updated information on doing business in EU countries.

4. Free movement of goods across the EU

The free movement of goods and services is a key principle of the European Union (EU). In addition, under the Mutual Recognition Regulation (EC 764/2008), member states must allow goods that are legally sold in another member state also to be sold in their own territory. The main advantage of mutual recognition is that it removes the need to harmonise all national technical rules. Technical rules typically relate to weight, size, composition, labelling and packaging.

Under the regulation, all member states provide free information on their national technical rules. It also sets out a standard procedure for enforcing those rules. (Iceland, Norway and Liechtenstein, which are members of the European Economic Area (EEA) but not of the EU itself, also agreed to this regulation.)

If your product is legally on sale in one EU country, you can market and sell your goods in any or all of the 30 countries that make up the EEA. You shouldn't need to meet a second set of requirements in the EU country you're exporting to.

SOLVIT - resolving issues with free movement of goods

The free SOLVIT online service is available to help you resolve any issue raised by a public authority which prevents or delays your plans to carry out business anywhere within the EU.

Every EU member state has a SOLVIT centre, as have Norway, Iceland and Liechtenstein. SOLVIT centres aim to provide practical solutions to problems within ten weeks.

Find the list of national SOLVIT centres on the Europa website.

5. Dispatching your goods within the EU

Goods in movement within the EU are described as being 'dispatched' when they leave their state of origin. Dispatching goods within the EU is relatively straightforward. Legislation does not change often but you must keep up with changes. You must, for example, know how to handle VAT, when to report your sales figures for Intrastat statistics and whether your goods are subject to licensing or other controls.

Exports are defined as goods transported to a destination outside the EU. Countries outside the EU are known as 'third countries'.

Dispatching your goods and VAT

VAT is handled differently depending on whether you're selling to a customer within the EU or outside the EU. Dispatches within the EU (between VAT-registered businesses) are not subject to VAT. This also applies to goods imported into the EU that have been released for free circulation following payment of import duties. However, when you dispatch goods to someone in another EU country, who is not registered for VAT in that country, you should normally charge VAT.

Compliance with Intrastat

Intrastat is the EU-wide system of collecting information from VAT-registered traders. Every business trading within the EU has to declare sales on its VAT return. If your sales exceed the exemption threshold during a calendar year, you must also submit Intrastat returns each month. The declarations are known as Supplementary Declarations (SDs). If your Intrastat return is late or inaccurate, you may have to pay a penalty. Intrastat thresholds are reviewed every year.

6. Doing business in another language

Having foreign language skills can benefit your business. You might lose opportunities if you lack skills in the language of the country you intend to do business in.

Without a working knowledge of the country's language, it might be difficult to understand its market and culture.

Being able to communicate in the national language will also help your relations with suppliers, customer service and communications with colleagues and employees.

You can consider employing a translator or interpreter - either a freelancer, or from an agency. Translators work on written texts and you can employ them to translate legal documents, user guides for products, technical information, tender specifications, letters and marketing material.

You can also employ interpreters to help with face-to-face or telephone meetings, visits and interviews.

You could also do some translation work yourself. If you find online research information in a different language, you could use free online translation services, such as Google language tools, to get a rough translation into English.

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