Amazon.com is the leading Internet retailer in many countries, including the United States, where it recorded sales of 136 billion US dollars in 2016. The e-commerce company is also well established in the European market, with clients from all over the EU.
Investors who start an Amazon store in Liechtenstein can take advantage of the positioning of the country and provide their services in neighboring counties, not only in the Principality.
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Selling in Europe through Amazon
Amazon grew from an online store primarily focused on the sale of books to a top Internet retailer, reaching out to customers worldwide and having more than 300 million active customers around the world.
Entrepreneurs will need to incorporate a company in Liechtenstein that will act as a third-party seller or that will be used to sell products manufactured in Liechtenstein via Amazon. The Principality is included on the list of accepted countries for registry on Amazon.com for the purpose of selling products.
Amazon has certain policies in place for its sellers and in Europe, it has five marketplaces in the United Kingdom, Germany, Italy, Spain, and France. The European Unified Account allows a settler to sell in multiple marketplaces from a single account, meaning that an entrepreneur from Liechtenstein could choose to sell his products by entering them into one of more than 30 distinct product categories.
Companies that choose to sell through Amazon can select one of the two selling plans that allow them to sell in all five of the EU marketplaces:
- the basic plan for companies that sell less than 35 items per month; the Amazon fee is payable only when a sale takes place;
- the professional plan that allows companies to sell more than 35 items and it is subject to a fixed monthly fee.
Our team of lawyers in Liechtenstein can provide you with detailed information on the taxes that will apply when you choose to sell in one or more of the five Amazon marketplaces. The most important tax is the value-added tax that applies to companies that sell goods and services (and has different rates depending on the country in which the transaction takes place). The company in Liechtenstein will need to register for VAT purposes in this case and our team can help you handle this step when you open the company that will be used to sell via Amazon.
Amazon business in Liechtenstein
When setting up an Amazon store in Liechtenstein, sellers are essentially opening a business and registering it with amazon in order to become a seller. This means that they will need to follow the company formation steps, detailed below by our team of lawyers in Liechtenstein, and then follow the principles for entering the Amazon marketplace. Creating an EU seller account for a business will require details about the company, the VAT number, the bank account and beneficial owner information, among others.
In summary, the following five steps are required to enter Amazon Global Selling:
- initiate the selling plan: as previously mentioned, this is based on the monthly sales volume; this is also the step during which companies provide information such as the name and address;
- list the products: choose one of the product categories and list your items; the listing tools are easy to use;
- receive orders: as soon as the account is live, the listings become visible and can be accessed by customers;
- receive your payment: once a product is sold, the payment is received in a timely manner directly into the seller’s bank account.
These are the four simple steps for registering a company in Liechtenstein as an Amazon seller; essentially, company owners choose to create their Amazon store virtually and access the five unified market places for Europe. Business owners should also note that they have options for improving their product visibility through sponsored products as well as access the Fulfillment by Amazon program (when the seller does not wish to ship the products).
Another important issue to consider is setting up convenient payment methods for clients. Most buyers will choose to pay via a credit or a debit card while others may wish to use PayPal. It is important to provide all options, for the satisfaction of the clients. One of our attorneys in Liechtenstein can give you details about opening a merchant account for the purpose of receiving credit or debit card payments.
Once a seller becomes successful in his home marketplace (in this case, the European unified marketplace), a common step for expanding the business is to make the products available globally (for example, on the North American market).
The number of third-party sellers in growing on Amazon and their sales volume is significant, according to the following figures:
- the total amount of third-party sales in 2019 was 200 billion $ (total amount of sales on Amazon by marketplace sellers);
- there are more than 3 million active sellers on Amazon;
- out of the active sellers, 280,000 made more than 100,000 $ in sales in a year.
How to start a company in Liechtenstein
When incorporating a company for the purpose of starting an e-commerce business, investors should choose an appropriate type of company. While partnerships may have lower initial start-up costs, investors are advised to choose a corporation, either the private or the public limited liability company. This type of legal entity allows them to keep their assets separate from those of the company, which may not always be the case with all of the individuals who form a partnership.
Most investors will choose to set up a company in Liechtenstein, as opposed to a partnership or a sole trader when selling via an Amazon Liechtenstein store particularly because this business form will allow them the highest level of protection against liability. Sellers who wish to know more about the local business forms can reach out to our attorneys in Liechtenstein. Below, we present the five main steps needed to open a limited liability company in Liechtenstein, the GmbH:
- choose the company name: when registering a new company, it must have a unique name that is not already in use by a registered legal entity; a prior verification can be performed with the Commercial Register Division;
- decide on the company particulars: company founders also need to select a registered office for the company that needs to be based in Liechtenstein;
- draw up the documents: the formation documents for a GmbH are the Articles of Association, the Declaration of formation as well as the Declaration of acceptance for the director’s and the managing director’s signatures;
- open a bank account: a corporate bank account is opened and the minimum share capital is deposited; the proof of capital payment is required together with all of the other documents;
- register: an application for registration is filed with the Liechtenstein Commercial Register; if all of the documents are in order, the company’s license can be issued in one week.
One of our lawyers in Liechtenstein can give you complete information about the existing business types and their particularities. We can help you with a set of legal services, useful during the incorporation phase of the company.
Contact our law firm in Liechtenstein for detailed information about how to set up a business in the Principality.