Hi folks I have a legal challenge that maybe some of you can help me answer.
We (The Hum) have been invited to do some training work with an EU agency in Helsinki. I’m trying to work out the best legal entity to use.
Currently we have a New Zealand business. Most of our work is in Europe, but our tax residency is in NZ. All the places we work have double tax treaties with NZ, so all of work is treated as an NZ export, and we pay income tax once, at home.
For this EU job, we need a European legal entity, which is registered in the European Commission’s procurement database.
So first question: does anyone already have a legal entity, registered with the EC, that they’d be happy for me to use as a subcontractor? I’m happy to pay a fee.
Second question: can anyone offer advice about setting up a fresh legal entity in Europe, or the EC registration process?
We are looking at setting up an Estonian company, but mostly because they have good marketing, not necessarily because it is the best option!
I think you might be in luck. If I remember correctly, Edgeryders are in that database. Isn’t that right @alberto? If that’s the case, I would be more than happy to do the admin work to have you use Edgeryders for this gig.
As you may know, this is the route that Edgeryders have opted for. It’s not perfect, but as far as I know there are no better options in Europe for non-residents to start a company. We also have some connections to lawyers and relevant services, but Alberto knows more about that.
If the boring questions are not of a sensitive nature and if you would like to ask them here, please feel free to do so, as my boring answers can then be fact checked by more eyeballs and since others having the same questions might find the answers useful.
Otherwise, shoot me an email, a PM, or chat. Up to you.
Ok we can have boring questions here, and you can give me private answers if necessary.
They want an EU bank account to go with the entity. I can haz?
Taxes. The deal will be in the range of €5-10k plus VAT. I guess Edgeryders will need to pay some kind of income tax before passing on the rest to me, to then dutifully pay more tax on in NZ. Do you know what % rate I can expect?
Is there a sweet invoicing & accounting system set up or is it more ad hoc?
That’s the tax, yes. However, there is usually a fee to cover our overhead. I propose we make an exception in this case. When Edgeryders members run projects (even a single talk or seminar can be an isolated project) we have a 20% overhead that stays in ER to cover costs and new investment. A comparable situation would have been when Nadia and I gave a talk this summer, we accounted for this when calculating our speaker fee.
In this case, I don’t think we should go by the 20% rule, since its mostly about helping you get out of a tight spot of not having the EU machinery set up for yourself yet. You are also not asking for any more of resources than my time, you are not in the habit of using ER resources, you won’t be selling anything that ER has had a hand in building, and I’m happy the help a friend out of a tight spot. I see this as a one-off, which would have been different if the plan had been to use ER from the get-go. We could do a smaller percentage, but for a small one-off that would be a petty amount.
Unless there are principled objections to this among my fellow directors, I’ll let the money pass straight through to you this time. If we were to do this more often, we’d need to work something out.
I was thinking, this could develop into a topic of its own in the Collaboration category. After all, if it helps once it might help again, and all the plumbing is already in place. Maybe @richdecibels could contribute “in kind”, in the form of an instructable on how to do what he is doing now with the Edgeryders plumbing. Of course, no rush.
I’m also thinking that it might, in the long run, be useful to have an alliance (or assembly, in microsolidarity-speak) of entities in different regions and countries. Members of any congregation in the assembly can use the billing and banking infrastructure of any other congregation, but still pay overhead to their own home-congregation.
Perhaps there could be an annual tallying, and if one assembly is contributing much more infrastructure than the others, it could be compensated.
The same applies to the invoice from New Zealand to Edgeryders OÜ: include no VAT but do include Edgeryders’ VAT ID and the words “reverse charge”. Reasonably complete information on VAT when invoicing Edgeryders OÜ is available here.
