Why Expand Your Business to Europe?
Expanding your business to Europe can be a smart decision for many businesses, particularly with the EU’s brilliant cross-border cooperation, free movement and a common currency used across the majority of its member states. This means trading within the EU is effortless, and as many countries in Europe also speak English, business communication is a breeze.
However, as with any expansion, certain difficulties can arise. There can be a lot to remember when tackling a global expansion to Europe, not to mention the different legislation and tax considerations.
Differing EU Employment Law
Whilst there is some commonality between the EU’s member states, every EU country has its own employment and legislative differences. EU employment law protects the right of employees in EU, member states, including conditions of employment, data protection and collective redundancy. Whilst these laws apply to the whole of the EU, they will operate differently between EU countries because of how they were implemented at a national level.
For European countries outside of the EU, employment laws and legislation can differ even more greatly, therefore, one set of laws cannot be assumed from one country to another and need to be carefully adhered to.
Differing Tax Rules
With Italy’s regional products taxes (IRAP), the Netherlands’ 30% ruling, and France’s annual personal income tax deductions, it can be a real difficulty to maintain compliance across different European countries. That’s why FMP Global is here to help. We have the in-country experience you need to make your payroll and HR management easy.
Since the UK left the EU on 31st January 2020 there have been various changes announced regarding the implications of employment law.
While the UK was part of the EU, payroll managers enjoyed the use of the EU’s payment-integration initiative SEPA. This made it easy to pay salaries, tax, and social security contributions from the UK, for employees across Europe. It looks like this arrangement will continue until at least 31st December 2020, however it is yet to be announced whether this will be continued. If not, company owners may need to open foreign bank accounts in order to pay employees working in the EU.
Visas & Work Permits
After Brexit arrangements have been finalised, it might be that British employees working in the EU will require more visas and work permits to do so. Currently, EU citizens have the right to move to any country to live, work, and/or study, however, individuals from outside the EU must apply for the relevant permits. It is likely that this will be the case for British citizens now.
Details correct at time of publication. You should not rely on these details without first seeking professional international advice.