Setting up a company in Europe

If you’re completely new to starting a corporate business, read this article on what is entrepreneurship. But, for now, let's focus on how to set up a company in Europe.

Research and planning

Here’s what to consider before you get started:

• Research information on the target market and if there's a need for your product. This will influence how to effectively reach and engage with potential customers.
• Conduct market research to find out who your competitors are and what they’re failing to deliver to customers. There may be a number of companies offering a similar product, but yours might be better.
• Develop a business plan that outlines your capital requirements, marketing strategies, accounting partners, financial projections, and so on. Including all this information is essential for securing funding from investors before you open.

Choose a business structure

The formation of a company in Europe requires you to decide whether you’re going to have a limited company, a corporate, or an incorporation. Then from there, you’ll be able to develop a legal structure too. Also, keep in mind the legal, tax, and financial implications that different types of companies have to adhere to.

Some of the most common EU company structures in France, Hungary, Switzerland, and so on are:

• Limited Liability Company (LLC): It’s a widely used option for small and medium-sized enterprises (SMEs) and offers flexibility in terms of management and taxes. In France and Germany, they are called Société à Responsabilité Limitée (SARL) or Gesellschaft mit beschränkter Haftung (GmbH).
• European Company (SE): This type of corporate company allows for cross-border operations within the EU and uses the EUR for payments. EU jurisdictions govern these companies.
• Cooperative (Coop): The formation of this type of company allows for democratic ownership and control by the members who use the company's services or products.

Register your business

The process of registering and opening a company in Europe varies depending on the country and type of service. Seek out information on required documents that'll influence the registration process based on local law.

For the required documentation, pay close attention, especially if you're a foreign national. Other than personal basics such as identification documents, you’ll also need documents such as articles of incorporation, or shareholder agreements.

For example, Hungarian companies need to go to the Hungarian Court of Registry and obtain a tax identification number from there.

After, you’ll need to obtain the necessary permits and licenses where your head office is located. Again, the rules are generally the same for the countries under the European Union but read up on each country's law.

Contact local tax authorities to register for tax identification numbers such as Value Added Tax (VAT) number and Employer Identification Number (EIN). After, get information on how to adhere to local regulations for the services you offer just as other companies have done.

Open a bank account

You’re free to contact any bank you want to use after the formation of your business. However, make sure it’s whose services will support your company’s needs in terms of supplier payments, customer transactions, and so on.

When you contact them to open an account, expect to provide personal identity documents, and documents proving your company’s registration.

You can also open an offshore bank account for your EU-registered company. However, make sure you know the regulations, especially around VAT and other taxes.

Conclusion

When you raise enough capital to establish a company in Europe, it’s important that you gather enough information to get to register it successfully. The process is generally the same across the EU, and a foreigner is able to register a company in European countries. It’s a matter of ensuring you have all the right documents to start operating legally.