A UK company can still sell B2B services into the EU under the reverse charge. Goods, consumer sales, EU stock, regulated activities and public contracts usually need an EU company or at least EU registrations and representatives. UK companies cannot redomicile out, so the business moves by transfer or a new holding. Run the EU company from the EU: one managed from the UK can become UK-resident.
What changed for British businesses
Before 2021 a British company could sell anywhere in the EU as if it were at home. Since Brexit it is an outsider: goods cross a customs border, services may need local registration, and some customers and regulators expect an EU counterparty.
Many UK businesses still manage without an EU company. A consultancy invoicing EU businesses simply applies the reverse charge, and the customer handles the VAT. A software company selling to consumers can register for the EU's non-Union OSS from London. The pressure starts with physical goods, EU stock, regulated services and public contracts.
Because UK law does not allow a company to move its registered office abroad, the solution is a new EU company: a Dutch B.V. for trading and logistics, or a Luxembourg company for financial services, funds and holdings.
What a UK company can still do in the EU, and what it cannot
| Activity | UK company alone | EU company helps |
|---|---|---|
| B2B services | Yes, reverse charge | For EU contracts and banking |
| Goods to EU customers | Import VAT, customs, EORI for each shipment | Importer of record, Article 23, stock in the EU |
| Digital and B2C services | Non-Union OSS VAT registration | Simpler, EU invoicing |
| Regulated activities | No EU passport | Required for the licence |
| EU public contracts and some customers | Often excluded | Required |
| Consumer products | EU responsible person needed | The EU company can be it |
Brexit did not close the EU market to British companies. It made them pay for every crossing.
UK rules that follow the EU company
- Central management and control. An EU company whose board decides in the UK can be UK tax resident.
- UK CFC rules. Low-taxed controlled companies, below 75% of the UK corporate tax, can be taxed in the UK; Dutch and Luxembourg rates are well above.
- Dividends. Generally 0% withholding from the Netherlands and Luxembourg to UK parents, and exempt in the UK.
- Transfer pricing. Services, IP and goods between the UK and EU companies priced at arm's length.
- Founders moving. No UK exit tax on shares, but gains realised within five years of leaving can be taxed on return.
Running the EU company properly
The EU company should not be a mailbox. If its directors take decisions in London, HM Revenue & Customs can argue that it is centrally managed and controlled from the UK and therefore UK-resident. Appoint at least one EU-resident director, hold board meetings in the EU and keep the records there.
Founders who move to the EU themselves often find it easiest: the EU company then sits where they live. The UK has no exit tax on shares, but gains realised within five years of leaving can be taxed when the founder returns.
A UK homeware brand opens a Dutch B.V., imports stock to a Dutch warehouse under an Article 23 licence, sells across the EU with OSS and names the B.V. as its EU responsible person. The UK company keeps the brand and supplies the B.V. at arm's length prices.
Do you need an EU company?
The result updates with each answer.
Do you need an EU company after Brexit?
Five questions. You get the EU set-up and the UK points to watch.
Often fine from the UK.
An EU entity pays for itself.
Transfer the business instead.
Or it may be UK-resident.
UK founders and EU companies: frequent questions
Does a UK company need an EU company after Brexit?
Not always. UK companies can sell B2B services with the customer reverse-charging VAT. Goods, consumer sales, EU stock, regulated activities and EU public contracts usually need an EU entity or at least EU VAT registrations and representatives.
Can a UK company move to the Netherlands or Luxembourg?
UK law does not let a company redomicile out, so the business moves by setting up an EU company and transferring contracts, IP or shares, or by putting an EU company under a new holding.
Will the EU company be taxed in the UK?
If it is centrally managed and controlled from the UK, it can be UK-resident for tax. UK CFC rules can also apply to low-taxed controlled companies, below 75% of the UK tax that would be due.
Are dividends from a Dutch or Luxembourg company to a UK parent taxed?
Usually not: both countries generally exempt dividends to UK parent companies under domestic rules and the treaties, and the UK exempts most foreign dividends received by companies.
What changed for founders moving from the UK in 2025?
The UK abolished the non-dom regime in April 2025 and introduced a four-year foreign income and gains exemption for new arrivals after ten years abroad. Founders leaving the UK should watch the five-year temporary non-residence rule.