Today, the Internet provides limitless opportunities for opening an online business. Browsing the web, doing shopping online & chatting - all these activities have long become part and parcel of company-customer interaction.
Being one of the largest e-commerce markets in the world, the EU provides a convenient platform for establishing an e-commerce company in Germany or other European jurisdictions.
Today, EU enterprises are increasingly going online in an attempt to increase their sales. The top four EU countries that have the largest number of e-commerce companies include Ireland, Denmark, Germany & Sweden. All this makes European states an attractive place to start an international e-commerce business.
Establishing an e-commerce company in Europe was made even easier after the EU adopted measures aimed at combating the so-called geoblocking. The idea behind is to develop a common digital market in the EU & provide incentives for engaging in transboundary e-commerce activities in the Eurozone.
So what is geo-blocking? Basically, it stands for limitations imposed on conducting e-commerce activities. The restrictions may involve citizenship, a country of residence or a geographic location where a legal entity is incorporated. Based on them, foreign individuals or companies from other member states may be prohibited from entering certain websites. Sometimes, access may be allowed but clients are unable to make a purchase or are required to use credit cards issued in a specific country.
E-Commerce & Franchising
Like with any business activity, entrepreneurs seek to expand their online businesses by establishing franchises oversees & concluding franchising agreements with interested parties.
When it comes to opening a franchise in Europe, some franchisors tend to place additional requirements on franchisees. In particular, they may impose limitations on the use of 3rd party platforms for the sale of their goods and services.
Registering franchises in the EU also requires taking into account problems associated with e-commerce franchises, such as:
- platform-specific restrictions
- franchisors’ controlling their franchisees’ websites
Usually, problems may appear after prolongation of agreements or changing of general conditions. Introducing an e-commerce element in the relations between franchisors & their franchisees can also create serious challenges. Franchisees’ willingness to agree to a new e-commerce channel may be affected by a number of factors, including the size of the franchise network & their trust in franchisors.
Social commerce is all about conduction of commercial activities through social networks. Joining blogs or discussion groups, sharing likes, exchanging opinions & performing certain actions - all these are considered part of social commerce. However, despite social networks’ immense popularity, few entrepreneurs have been able to achieve any notable success there. Because social network have their own specifics, entrepreneurs involved in social commerce must adapt themselves to a particular social network’s format (e.g. by offering their products & services through exchanging images & videos).
The latest legislative initiatives were meant to develop transborder trade in the EU & further promote e-commerce. And this, of course, provides a powerful incentive for entrepreneurs seeking to open an online company in Europe.
Need legal advice on setting up a business abroad? IQ Decision UK is the answer. We provide consultations on registering companies in England & other jurisdictions of your choice.