How to begin my distribution Business

jah718

Okay, so I have a product that I want to distribute to shops in Ireland. So, I am wondering what legal information I need. I assume I will need to form some kind of a company to do this or maybe become a sole trader. Do I also need to register a company name?

I am importing my product from China. What tax will I be liable for when importing this product and also will being a company lessen the tax?

Sorry for my ignorance, but I am new to this and not sure what I am doing!

Thanks

Lplated

Perhaps start by reading this thread -

http://www.boards.ie/vbulletin/showthread.php?t=2055297401

And following some of the links on it.

Second, use the 'search' function on the forum - you'd be surprised in how many different ways the questions you're wondering about come up on here.

Third - If Boards fails you [and it's most unlikely to], Google search is not a myth, it really does work.

Fourth - best of luck.

Celeron Media

I am importing my product from China. What tax will I be liable for when importing this product and also will being a company lessen the tax?

Yes you will have to pay import VAT and there is no discounts for companies.

I have a product that I want to distribute to shops in Ireland. So, I am wondering what legal information I need. I assume I will need to form some kind of a company to do this or maybe become a sole trader. Do I also need to register a company name?

Yes you will have to register the business and register for VAT, if you want to supply shops around the country.

Mrking

Hi,

I don't want to make a new topic because my question is the same almost as this.

I want to import a product from the EU to sell wholesale in Ireland. I have the funds and able to source the stock all ready etc. So I would be paying VAT to that country on the order.

Is it as straight forward as buying for we say from my supplier for €30 inc VAT... then selling to business' over here for €35 + VAT? or if i am a sole trader, do i need to just include the VAT in the price I am advertising. (Hope that makes sense)

My question is. Can I sell to business' by being a sole trader not registered for VAT? Maybe shops wouldn't buy from me because of this? And also, how would VAT work? I wouldn't be able to register for VAT because I wouldn't be earning over the threshold, or would I have to form a company to sell to business'?

Also, if I am selling B2B, I don't have to accept returns is that correct? (Obviously for damaged items to do I mean for "change of mind" etc.)

Any advice welcome, I need to learn a lot I understand but I am just trying to understand the basic's so when I read up about it it will be easier. Thanks

Mrking

jah718 wrote: »

Okay, so I have a product that I want to distribute to shops in Ireland. So, I am wondering what legal information I need. I assume I will need to form some kind of a company to do this or maybe become a sole trader. Do I also need to register a company name?

I am importing my product from China. What tax will I be liable for when importing this product and also will being a company lessen the tax?

Sorry for my ignorance, but I am new to this and not sure what I am doing!

Thanks

I am new to this also, but i know there is a Facebook site called " Dresses4heaven.com / shoes4heaven.com" or search it on Facebook... look at his page he is selling loads of shoes/dresses etc.... Anyway, he is doing exactly what your querying so maybe he might be able to help you?

He is selling shoes on his website for we say €100 , then someone buys them he will tell them it takes 2 weeks to get delivered, and going to aliexpress.com and buying them for €35. Then when they get delivered to him, he pays the custom charge (21% I think of the €35) and posts to his customers making + €60 profit!! He is doing brilliant!

VERY clever business idea and little risk involved. This may be along the lines of what you are looking for. (i.e when a shop places an order from you and pays you... THEN order yourself from your chinese supplier) This might be easier for you to get started as it may give you more cashflow to play with to try get your business of the ground.

There is also a site called www.dutycalculator.com (I think) which will let you know the customs charges.

Hope this helps.

beebaw

hi,

from my own experience with buying from china when you purchase from them they do not charge you Chinese vat as their product is being exported to a non-eu country. However when you bring the product in they will need to send you a commercial invoice for what you paid to them, this is standard practice and when the goods land in Dublin port your shipping agent will look for this commercial invoice and the duty and VAT will be calculated by a customs broker based on this commercial invoice. bear in mind all of this all costs money and u will need to build this into your sell price. Also a 20" container will cost approx €1500 to ship from china with €600 costs at this end. then you have your duty and vat.

Only when you have the duty and vat paid then your goods will be released to you.

If you are VAT registered you will be able to reclaim this vat back in a return but not the duty, duty is usually only a small value anyhow based on original cost.

if you are not vat registered you will probably find it hard to sell to companies as they like to be able to reclaim back the vat. There is a guideline on the value of turnover that is recommended to register for vat but you can still register for Vat if under this once it will benefit your business

RUDOLF289

jah718 wrote: »

Okay, so I have a product that I want to distribute to shops in Ireland. So, I am wondering what legal information I need. I assume I will need to form some kind of a company to do this or maybe become a sole trader. Do I also need to register a company name?

I am importing my product from China. What tax will I be liable for when importing this product and also will being a company lessen the tax?

Sorry for my ignorance, but I am new to this and not sure what I am doing!

Thanks

Quite a lot of questions.

Let's start by addressing the issue of setting up a limited company or being a sole trader.

It all depends on how much money you expect to turn over. If your turnover is significant, you would be well advised to set up a limited company. You best speak to an accountant and a solicitor to get professional advice.

In relation to VAT, if your turnover is in excess of € 75K per annum, you HAVE to register for VAT and run a VAT administration, collect VAT on your sales and file periodic VAT returns. If you do less than € 75K per annum you have the option of registering for VAT. However, if you are registered for VAT, the VAT that you pay on imports is a deductible input in your VAT return (i.e. you claim VAT paid on imports back). So, unless you want to add 23% to your cost price, it would make sense to register for VAT so you can claim the VAT back on your imports.

NB : You will also be liable for import duty - which is a non deductible input - which depends on the commodity you import. If you PM me with the details of your product I will have a look and see what the likely rate of duty is and advise how that is calculated.

In addition, if you import from China you need to register for EORI with Revenue. Please refer to attached document which gives you an outline on issues you are likely to encounter / need to address when you import.

One final point. If you import from China DO NOT leave the shipping arrangements to your supplier(s) but make arrangements yourself through an Irish based forwarder. If you search the term : China Import Service Fee on boards you will find a number of threads where people have been badly caught by leaving the shipping arrangements to their supplier.

Feel free to PM me or post again if you need any further assistance or clarification.

Cheers,
Rudolf289

RUDOLF289

Celeron Media wrote: »

Yes you will have to pay import VAT and there is no discounts for companies.



Yes you will have to register the business and register for VAT, if you want to supply shops around the country.

Just to clarify, if you are registered for VAT you are entitled to claim back the VAT paid on imports in your periodic VAT return.

Cheers,
Rudolf289

RUDOLF289

Mrking wrote: »

Hi,

I don't want to make a new topic because my question is the same almost as this.

I want to import a product from the EU to sell wholesale in Ireland. I have the funds and able to source the stock all ready etc. So I would be paying VAT to that country on the order.

Is it as straight forward as buying for we say from my supplier for €30 inc VAT... then selling to business' over here for €35 + VAT? or if i am a sole trader, do i need to just include the VAT in the price I am advertising. (Hope that makes sense)

My question is. Can I sell to business' by being a sole trader not registered for VAT? Maybe shops wouldn't buy from me because of this? And also, how would VAT work? I wouldn't be able to register for VAT because I wouldn't be earning over the threshold, or would I have to form a company to sell to business'?

Also, if I am selling B2B, I don't have to accept returns is that correct? (Obviously for damaged items to do I mean for "change of mind" etc.)

Any advice welcome, I need to learn a lot I understand but I am just trying to understand the basic's so when I read up about it it will be easier. Thanks

In response to your question ; If you are not registered for VAT, you will have to include the VAT you have paid as a cost. That - depending on the country you buy the product from - add aprox 20% to your cost price.

If you are registered for VAT, your supplier in the other EU member state can apply the zero rate for VAT. You account for your transactions (Intra EU acquisitions) in your VAT return. Essentially VAT on imports (either from outside the EU or Intra EU) are deductible inputs, so they should be cost neutral. Especially if you are selling to VAT registered business, the VAT that you charge is a deductible input to them, so all in all it makes sense to register for VAT even if you are unlikely to exceed the € 75K threshold.

A meeting with an accountant would help you clarify the issues.

Cheers,
Rudolf289

RUDOLF289

beebaw wrote: »

hi,

from my own experience with buying from china when you purchase from them they do not charge you Chinese vat as their product is being exported to a non-eu country. However when you bring the product in they will need to send you a commercial invoice for what you paid to them, this is standard practice and when the goods land in Dublin port your shipping agent will look for this commercial invoice and the duty and VAT will be calculated by a customs broker based on this commercial invoice. bear in mind all of this all costs money and u will need to build this into your sell price. Also a 20" container will cost approx €1500 to ship from china with €600 costs at this end. then you have your duty and vat.

Only when you have the duty and vat paid then your goods will be released to you.

If you are VAT registered you will be able to reclaim this vat back in a return but not the duty, duty is usually only a small value anyhow based on original cost.

if you are not vat registered you will probably find it hard to sell to companies as they like to be able to reclaim back the vat. There is a guideline on the value of turnover that is recommended to register for vat but you can still register for Vat if under this once it will benefit your business

Two points ;

1) Rates from the Far East are on a downward curve
2) Container load imports from outside the EU can generally be structured to allow you to defer the accounting of VAT to your periodic VAT return. In that case you do not have a cash outlay of 23% over the invoice value plus freight cost plus duty.

Please refer to the attached for information

Cheers,
Rudolf289