Best country in Europe to setup a watch trading company?

[gatrader]

hello guy, what's the best country in Europe to setup a company to sell luxury watches (via Chrono24) that is:

1. Not crazy expensive to maintain
2. VAT only on the margin (profit)
3. Low taxes (I live in a tax free country where this kind of jewelry is strictly regulated by license)

Thank you very much.

 

[CyprusLawyer101]

Hey,
Where will your clients be based and wherefrom will you be sourcing⁤ the goods?
Have you looked into Cyprus at all?

 

[gatrader]

Clients will be based in Europe, sourcing from Europe. I didn’t look to Cyprus at‌ all to be honest, I was thinking about Romania or similar (I live in a‍ tax free country without CFTF rules).

What about Estonia?

 

[CyprusLawyer101]

I cannot really comment objectively about the other jurisdictions, but if you are interested I can⁠ DM you and discuss the Cyprus option. Please let me know.

 

[NicolasMaduro]

VAT on profit margin? Is that really a thing when it comes to goods in‌ the EU. I dont think so.

 

[gatrader]

If you buy a‍ used one (as it happens for 99% of the watches) from a private individual for⁠ 80k, he won’t charge you VAT. Let’s suppose you resell for 85k including vat…normally you⁤ should pay the VAT only on the 5k margin. If you pay the 22% (for⁣ example) on the 85k you’ll end up loosing money most of the times (margins on⁢ luxury watches are about 10/15%).

 

[369]

Yes very common even‍ in PM

 

[NicolasMaduro]

Oh right my bad. VAT on used goods is on the profit margin.

How does‌ that work cross-border?

 

[gatrader]

It’s getting applied based on the country where your company is based I guess (which‌ I don’t know at the moment🙂 ).

 

[gatrader]

Any experience with Estonia and E-residency? I don’t know if it’s suitable for watches.

 

[gatrader]

No one can help?

Is there VAT on margin in Cyprus and what⁠ are the manteinance costs?

 

[CyprusLawyer101]

If the goods will not be physically located‍ in Cyprus, then there would be no VAT applicable. Depending on to which EU state⁠ the watches would be sold into, there might be an obligation to account and pay⁤ the VAT there. Different thresholds exist in each State which gives rise to the VAT⁣ obligation and each jurisdiction would need to be checked out individually and I would say⁢ also on its rules on VAT applicable on margin.
Costs for maintenance of a Cyprus︀ co would really depend on the actual operation, volumes, vat requirements etc. but there is︁ enough flexibility in structuring this cost efficiently for both small and large scale operation.

 

[nomadcap]

May I ask where you decided to incorporate? I'm also considering where to setup in‌ Europe for trading watches. I do stay in Portugal though.

Was looking at Ireland, Malta,‍ Cyprus.

 

[lory]

I'm no watch expert, but in my opinion, it really doesn't matter where you sell‌ those damn watches from.

And that’s probably not even the point when someone asks about‍ which country, mentioning places like Cyprus, Malta, and others. It's more about where you pay⁠ the least in taxes and VAT.

So just go to Dubai and sell them from⁤ there.

 

[nomadcap]

Thanks Iory, yes it's good to sell in Dubai⁣ but with watches there are cross border duties.

If the watches are in Dubai, then⁢ to send to Europe they attract a 15-25% VAT on top.

I was considering Malta︀ and Cyprus for the lowest tax within Europe but also potential issue of confidence and︁ trust for the buyer.

So we need a Company to sell within the European market.︂

Also another factor is having the company in an EEA country with a little bit︃ of trust to make buyers more confident in making a purchase. Malta/Cyprus might potentially be︄ an issue for this.