Investment and Finance

Estonian Company for Doing Business on Amazon

9/22/2021 8:00:00 AM
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Technology is something that came into our lives to change everything, even the way we shop. Amazon has taken advantage of this very well and is a leader in this field. Every business or market has in one way or another used, or at least contemplated the possibility of using this world-renowned platform. 

Since its foundation more than 25 years ago, Amazon has grown to become the leader in online commerce. Therefore, we believe that you cannot simply ignore the golden opportunity it would represent for your business to build your online store on Amazon. Likewise, selling goods on Amazon shortens the process of reaching potential clients.

Right now, while we are typing this, Amazon attracts over 180 million users in a month and offers a wide selection of over 500 million products. This is another advantage of offering your products at Amazon: the base of millions of customers can be in Estonia and beyond with just a few steps. 

Why Amazon?

If you are reading this because you are considering growing your business, you are right: doing business on Amazon can increase e-commerce opportunities for your company if done right. 

-The most popular marketplace in the world

-Total 2020 trading turnover USD 96.1 billion

-89% of shoppers prefer Amazon to other similar marketplaces

-300+ million active users from 180+ countries

-2.5+ million active sellers

-Easy way to become an Amazon seller

-Efficient and sophisticated logistics system

-2+ million new users of Amazon from all over the world

-4,000+ items being sold per minute

The Process 

It is a mistake to trade on Amazon as an individual without registering the business. When starting working on Amazon, you should register a company that will give you an opportunity to trade on Amazon all over Europe without any restrictions and minimize your tax costs. 

Having said this, the steps to start trading the products of your company on Amazon, while being in Estonia, can be summarized as follows. 

1. Register your company in Estonia 

Estonia has better conditions for trading on Amazon in Europe than any other EU country due to its tax system (no income tax), possibility to set up and manage a company remotely by non-residents.

2. Open an account in one of the Payment Service Provider (PSP) cooperating with Amazon. With this, your company and you as a seller can receive funds directly from your Amazon account. Likewise, you can operate with funds in multiple currencies. You will get IBAN and a credit card to pay for Amazon services. This account will suit the Amazon platforms in such countries as UK, Germany, Italy, France, Netherlands, Spain, Turkey, Sweden.

3. Register a VAT number in Estonia (can be the UK or Germany)

It can take between 2 and 4 weeks. Since this is one of the most important requirements of Amazon, you need to take it very seriously. For compliance with the rules of Amazon, you need to be registered as a VAT payer in the country where you plan to trade as well as in the country of your business, which is Estonia.

4. Register your seller account on Amazon 

Once you have created your business and opened a bank account, you can proceed to arrange a Fulfillment by Amazon (FBA) seller account. As a rule, it does not take much time to create an Amazon account, only with a few steps you can be ready. You need to link your credit card in order to withdraw money received from selling products on Amazon.

In case you didn't know, this program (FBA) will provide you with access to the infrastructure of the trading platform for a nominal fee, including the storage service, shipment, and return of the merchandise you sell. Such an e-commerce model is profitable because the whole process is automated, and once the products are transferred to the market warehouse, the customers are served by Amazon employees.

5. Arrange accounting services for your company incorporated in Estonia to avoid penalties, financial problems, and money freezing in your Amazon account.

Disclaimer: The information contained in this article is for informational purposes only and does not constitute financial advice or recommendations. Investing in financial products or cryptocurrencies involves risks, and you should be aware of the potential risks involved before investing. The content on this website is not intended to be a solicitation or offer to buy or sell any financial products or services. The information provided does not take into account your specific investment objectives, financial situation, or needs, and should not be relied upon as a substitute for professional financial advice. You should seek independent advice from a financial advisor or other professionals before making any investment decisions. Please be aware that the legal status of cryptocurrencies and other financial products may vary in different jurisdictions and may be subject to regulation. It is your responsibility to ensure compliance with any relevant laws and regulations governing the sale and marketing of financial products and services in your jurisdiction.

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