Frequently Asked Questions Concerning Forming A European Business
EuropeanBusinessFormations.com offers introductory answers to frequently asked questions about company formations, fees and taxes, registration, and other services that we offer Office. Click on a FAQ Question below to view answers relating to your selection. Links throughout the answers will guide you to further information on our website or from other sources. Should you have any further questions, please consult our Contact Us page.
Answer Not many US corporations offer to set up a fully inclusive package of European/Worldwide incorporation services. It’s normally a drop and run approach. You pay your money and you don’t get the good service. With EBF you pay your money and we hold your hand every step of the way during the whole process even going that extra mile to try and sort out jobs that are possibly not part of the incorporation process but can be handled by our local offices. Answer Our sister company Open A European Company based in the UK and with whom we have a close association has been established since 2003 and EBF itself has been in existence since 2007. Answer To begin with we need a completed application form, certified copy of your ID ie International passport and two proofs of address that are less than three months old plus payment of course. Answer Of course! Dependent upon the European country in which you are incorporating we can let you know what you will need to do in order to register. For example, in France and the Czech Republic you will need to have a criminal authorisation check. We can let you know where you need to get this from. Most countries allow for USA beneficial owners. Some countries will require either a local or EU director but we can assist with this. Call me and then we can review your individual situation. Answer Due to international money laundering regulations, it is extremely important to identify the individual and the companies with whom we are working to ensure that the companies to be incorporated are not put to fraudulent use. This is for both our protection and the clients. Answer No, not really. Not if you know what you are doing and with EBF you will feel that you have a partner to help you through the ins and outs of company incorporation in Europe and worldwide. We will tell you what is going on at each and every stage of the process. We will co-ordinate all the necessary requirements in order to take you smoothly through the whole procedure. Of course, there will be times when the notary or the local chamber of commerce in the country in which you are setting up will change the rules or will ask for additional information. We will advise you of this at the earliest opportunity and will discuss with you the best way of effectively dealing with this and what your options/choices are to make an informed decision. Answer You are right. You do not need to put a capital deposit in to open a US corporation but you usually put some money in a corporate bank account to use as working capital. Effectively European formations ,apart from UK and Cyprus where no payment is put in, utilise the concept of share capital. Share capital means that you are depositing a lump sum payment into your corporate bank account to show to the governing bodies and your clients that you are liable for this equivalent sum in case of bankruptcy.
So, for example, in the most extreme of cases, Austria has a share capital deposit of EU35,000 but half of this can be put into the corporate account to register the company. Another example would be France where you could put a minimum of EU2,000 into the bank account for capital deposit.
Answer Of course they can! Effectively, the money that is in the bank account can be used against all company expenses such as paying invoices for supplies, IT, staff, offices and ongoing company costs. It is only blocked on the account while the company is being incorporated. Answer Except for UK, Cyprus, France and Denmark most countries in Europe use a notarial system to register companies. This means that they are registered by way of an attorney AND notary. A notary is an extremely qualified individual in Europe and it can take many years to be accepted by the government bodies in each country. Bearing this in mind, the standard stages of incorporation are as follows: attorney initiates first step to organise the articles of association prior to registration, a corporate bank account is set up, the client deposits share capital. The share capital is then declared to the notary, the notary registers the company and then the VAT (equivalent of US sales tax) is applied for. This whole procedure depends upon the availability of the notary. EBF has fantastic contacts in each European country. Answer We use the main banks in each country in which we incorporate and all of these banks have online banking facilities just like we do in the USA. Answer As I briefly mentioned before when talking about company formation, a VAT number is the equivalent of US sales tax registration. An EU VAT number is essential if you are looking to trade within the European Union as clients and tax authorities need to see this so that they 1. See that you are fully registered within Europe and 2. To ensure that you do not pay more VAT than you have to within the European Union. For example if you have a French company and you are dealing with a German client, you put your EU VAT number on your invoice and dependent upon the category of invoice you do not charge VAT. Answer Yes, most certainly. In terms of dealing with the government tax authorities and specific issues to do with filing accounts and tax returns it is extremely important that this is done on time through a locally qualified accountant. These individuals are aware of requirements, legislation and deadlines so that your company runs smoothly without having the headache of forgetting about filing your tax return on time. Answer A registered office is a legal address where all legal correspondence is mailed regarding the company. A virtual office has mail, telephone and fax forwarding facilities and is used as the minimum requirement to register for EU VAT in some countries. In other countries in Europe the minimum requirement is a physical office with staff. Basically, so that when tax authorities come prior to VAT registration they can see that the company is trading in the designated country. Answer We can provide local accountants who will undertake this service on your behalf and fulfill all tax requirements for you. Answer Yes, provided that you produce full details of your US company and who will be the authorized official. Answer The reason why companies have such high share capital is to show a commitment to the authorities in that country that they are serious about setting up in business. Answer Certified copy of your passport or similar ID document Two utility bills that are less than three months old i.e., Gas, electricity, telephone (not cell phone), water. Answer We only deal with major international banks or major banks in the country in which we incorporate your company. Answer This is also part of the money laundering requirements for banks. Answer No, unless you require an additional service over and above the standard incorporation. Answer Yes, we can provide full nominee services for company officials and shareholders. Answer Depends upon the jurisdiction in which you form your company. Most countries do not require renewal of services. Please ask for further information regarding this when you send us your enquiry. Answer Our sister company based in the UK called Open A European Company.com has been established since 2002. Our company has been established to assist with the US market. Answer This differs from country to country but in most cases you will be required to sign individual countries registration documents and bank application forms. Answer Yes, we provide accountancy services in all the countries we cover. This applies to legal and office services as well. Answer This is due to the fact that companies are not formed online in Europe except in the UK and Denmark. Answer This is due to EU money laundering requirements. Answer Yes you can. In most cases this is acceptable. There are exceptions whereby if you have only one shareholder then either the amount of share capital to be paid is increased as the liability increases. In some cases, if one director is named on the company then this has to be declared as part of the main corporate name. Answer This is required to import goods into the EU and to trade in the EU. Answer This is to demonstrate to the tax authorities in the country in which you are setting up that there is a genuine trading business in their country. Please note that this is also required for an EU VAT number. Answer Yes, in most countries this can be used once the company has been incorporated. However, please note that the funds are blocked until the company has been incorporated. Answer Yes, all countries in Europe allow none EU residents to expand their business into Europe.
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