Scalable business models and the state of European integration
I have heard that there is lot has been done to make the European market tightly integrated (universal regulations across European Union, etc).
So, I wonder if it is easier now to create a scalable business and scale it all over European market.
I address my question to entrepreneurs who have run their business in Europe: Does it really matter from what European country your business is, if you work all over the European Union?
Is there just language/translation issues when working on local European markets or anything else?
For example, what obstacles (except language) can a Spanish company face in France? Local laws and regulations? Payments and banks? Anything else?
Have you ever met an issue when, for example, German customers tried to buy from German companies only in a certain market segment?
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Aren't language issues enough? – Jeff O 13 years ago
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I am interested if any other issues exist. – Martin Lee 13 years ago
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What do you mean by "German customers tried to buy from German companies only in a certain market segment"?? – Yoav Aner 12 years ago
1 Answer
I would list the following (some of those you touched on already):
- Language
- Currency (not all EU countries use the Euro)
- Laws and Regulations (The EU creates directives which each member state implements, some times differently)
- Tax - anything from corporation tax, Value Added Tax, to social and health insurance. Each country has a different system and different set of tax laws.
- Banks and payments - this is actually improving gradually, but there are still obstacles, e.g. opening a bank account in a different country.
- Intellectual Property (a subset of Laws and Regulations I suppose, but important to startups), e.g. copyright "ownership" is treated differently to some extent, registration of trademarks and so on
- Public acceptance / psychology - customers might prefer products or services from their own or more 'friendly' countries
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THAT SAID most items are irrelevant. Bank account for example - a french company does not need a bank account in spain to do business there. Especially as long as it is EURO, euro transfers take the same time. – Net Tecture 12 years ago
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True, but there are plenty of reasons a company would want to open a local bank account, for example to make it easier making payments to suppliers and/or receiving payments from local clients etc. Even in terms of psychology/perception of doing business in the country. – Yoav Aner 12 years ago
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Ah, no. See, ever since IBAN transfers european euro transfers are the norm and not allowed to cost more or take longer. – Net Tecture 12 years ago
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Yes, I know. I said this is improving. Customers however might still not know about it and hence *feel* more comfortable paying into a local bank account. I'm pretty sure there are other reasons that makes it harder with some bureaucracy if you don't have a local account, or easier if you do... – Yoav Aner 12 years ago
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Yoav, you are completely right about EU "directives". I had a talk with a lawyer recently, and I understood the following: EU provides 'directives' which are enforced all around EU. Each EU country should harmonize its local regulations with the EU directives in the following way: the local regulations can be more strict than the EU directive, but can not be more relaxed than the EU directive. – Martin Lee 12 years ago
