E-commerce outside the European Union
- Sandra Visser-Meijer
- 16 May 2023
- Edited 21 Nov 2022
- 5 min
- Managing and growing
Online shopping is becoming more common all over the world. And almost a quarter of the world’s population buys products from overseas. Lower prices, more options, or the unavailability of specific products in their own country draws customers to international shopping sites. This also presents great international opportunities for your online shop. When you start an e-commerce business outside the EU, you will encounter lots of different rules and laws.
Local requirements for online shops can vary significantly. You may have to meet specific rules with regard to website security or customer privacy protection. Inside the EU (in Dutch), most legislation has been harmonised. Outside the EU, different rules and obligations will generally apply from one country to the next. Provide a translation and explanation of your general terms and conditions on your website to avoid legal disputes, and research local rules on trial periods and returns. European consumers, for instance, are entitled to cancel their purchase within 14 working days without giving any reason. Consumers in California (United States)vhave a 30-day cooling-off period.
If you intend to export goods outside the EU (in Dutch), different product requirements may apply in the destination country. Check what this means for your product and remember to look closely at packaging and labelling too. Some countries have import bans, such as Saudi Arabia, which prohibits the import of pornographic material. Carriers and countries (in Dutch) may impose restrictions, which means you may not be able to export everything you would like.
Online shop and domain name
While you might decide to launch a new online shop overseas, you could also sell your products on marketplaces (in Dutch) such as Amazon or Alibaba. This lets you use the platform’s logistics, marketing, and payment services, and means you do not have to read up on local e-commerce legislation as much.
If you decide to run your own online shop, make sure that all your copy and product descriptions are translated properly to avoid misunderstandings and tell customers exactly what you are selling. If necessary, hire a professional translator. Adapt your online shop to your overseas customers as much as possible. They will only buy something if they like what you have on offer and feel they can trust your shop. An e-commerce trust mark is a great way to inspire confidence.
With an international .com domain name, you can be found by consumers the world over. If you want to focus more on Europe, you can consider using the .eu extension, while country-specific domain extensions like .ch for Switzerland or .us for the USA are a better bet if you want to target a specific country. Find out what works best in your target country or bring in a hosting provider to help you make the right choice. Entering foreign markets with a .nl extension makes little sense. Google will not find your website (in Dutch) as easily and will not show your shop in the search results.
Paying with iDEAL is common practice in the Netherlands, but other countries have their own favourite payment methods. Research what payment method your potential overseas customers prefer. Setting up a sound ordering and payment process is paramount and will save both you and your customers a lot of headaches.
PayPal is an easy and widely used payment method worldwide, but it can only be used by customers who have a credit card. There is no need to figure out and arrange everything yourself, as you can also choose to work with a payment provider, who will take care of all payment-related matters and will usually support multiple payment methods from different countries.
You want your customers to receive their orders undamaged and on time. Foreign shipments take longer to arrive and get lost more often than domestic shipments, so you could consider taking out transport insurance. Package and address your parcel properly to ensure that your customer receives it in perfect condition. Excellent service will get you even more satisfied customers. Here is how:
- Send your customers a track & trace email so they can track their order.
- Clearly explain how overseas customers can return their orders.
- Include a pre-filled return form.
- Provide a pre-paid self-adhesive return label. If necessary, you can deduct postage from the return amount afterwards, depending on your terms of delivery.
If you want to ship goods outside the EU, you have to submit an export declaration to Dutch customs. Each country has its own rules when it comes to customs and import duties. With the increase in global e-commerce, governments have tightened up checks on goods entering their countries.
To ship goods to a non-EU country, you need certain documents. If you use a postal company or courier company to ship your goods, they will provide you with customs declarations. Which form you need varies from one shipment to the next. It also depends in part on the weight and value of your parcel.
Import duties and VAT
You will usually want your customer to pay import duties, VAT, and other import taxes on their order, as it will save you a lot of admin work. Make sure to state this clearly on your site to properly inform your customers and prevent problems later on. Import tax rates vary from one product to the next and some countries have exemptions for shipments up to a certain value.
For more information, look at the Access2Markets tool developed by the European Commission. Postal and courier companies also provide advisory services. It is important to remember that parcel service companies will charge handling fees for customs clearance. Make sure to agree on the amount and whether you or the recipient will pay in advance.
When exporting goods to non-EU countries, you charge 0% VAT to your customer. This is regardless of whether they are a business owner or consumer. Your records must prove that you exported the product.
An example of VAT in Switzerland
Suppose you run an online shop that sells goods to Swiss consumers. Switzerland is not an EU country, so you export your goods and charge your Swiss customer 0% VAT. Your customer pays Swiss import VAT. Switzerland has two VAT rates for goods:
- a general rate of 7.7%
- a reduced rate of 2.5%
If you ship goods from the Netherlands via your online shop and are not registered for VAT in Switzerland, your Swiss customer will pay the import VAT. Switzerland levies import VAT if the VAT amount exceeds CHF 5 and the value of the goods exceeds a threshold amount linked to the VAT rate. Shipping costs do not count towards the value of the shipment.
|VAT rate||Shipment value||Import VAT|
|General rate: 7,7%||Higher than CHF 65||Yes|
|Reduced rate: 2,5%||Higher than CHF 200||Yes|
Switzerland considers goods shipments with a value less than CHF 65 or CHF 200 to be small shipments. Swiss customs do not charge import VAT on small shipments.
Do you need a Swiss VAT number?
You need a Swiss VAT number if:
- your online shop is based outside Switzerland, and
- your annual worldwide turnover exceeds CHF 100,000.
If the turnover of your small shipment online shop exceeds CHF 100,000 per year, you are required to register your online shop for Swiss VAT. This registration applies from the month following the month in which you exceed this threshold amount. For example, if you exceed the threshold amount in October, your online shop should be officially registered for Swiss VAT starting in November.
You are allowed to register at your own discretion before you exceed the threshold amount. This can be useful if you already expect that you will be reaching the limit soon. By anticipating, you can ensure that you meet your VAT obligations and that you are perfectly prepared for charging Swiss VAT.
If you do not have a business in Switzerland, you will need a Swiss tax representative to register for Swiss VAT. You have to register for VAT online.