Distributor, subsidiary or selling online: what each route into Europe really costs a US manufacturer

A US manufacturer looking at Europe has three routes: a local distributor, a company of your own, or selling straight to customers online. They differ in cost, in who carries which legal duty, and in which buyers they can reach.

Putting it simply: a distributor is the cheapest way in and the only practical one for hospitals, schools and municipalities, but you give up margin and some control over price. A subsidiary gives you control and market knowledge, but it means share capital, a notary, a VAT registration and payroll before your first order. Selling online works for consumer products with brand pull, but from day one you need VAT registrations, an EU-based responsible person and local-language service.

The three routes side by side

Route 1: a distributor or dealer

You do not need an EU entity to sell through a distributor. Quote DAP to its warehouse and the distributor, as the party established in the EU, lodges the customs declaration, pays the duty and import VAT and deducts that VAT in its return. We cover the mechanics in Incoterms, VAT and import: getting US goods to an EU distributor. Your setup cost is mostly samples, translated product data, conformity documents and the time spent finding the right partner.

The ongoing cost is the distributor's margin. We looked for a published industry survey or trade association figure on European distributor margins by category and, as of October 21, 2026, we could not find one we would cite. Margins are negotiated, usually expressed as a discount off your list price, and vary with how much work the distributor does: stock, installation, service, tender paperwork.

What distributors ask for in return is fairly consistent. Our industry pages list it under "What distributors expect": for furniture it is a clear place in their range, technical files in the local language, reliable lead times and a commercial package covering margin, installation and warranty; for building materials it is CE documentation, stock continuity and a margin structure that works through buying groups.

The hard part is the shortlist. A distributor that keeps winning public contracts in your category has buyers, logistics and tender experience in place. Award notices name those winners, which is why we wrote what a contract award tells you about a distributor, and why the 90-day sequence in our US playbook for entering the EU through distributors starts from them.

What this route does better: speed, low fixed cost and access to institutional buyers. What it does worse: you see the market through someone else, and your end price is partly theirs.

Route 2: your own subsidiary

Germany: GmbH or UG

A German GmbH needs share capital of at least €25,000 (§ 5(1) GmbHG). Before the company can apply for registration, at least a quarter of each share must be paid in, and cash payments must reach at least half the statutory minimum, so €12,500 (§ 7(2)). The articles must be notarized and signed by all shareholders; the law also allows notarization by video (§ 2(1) and (3)).

The UG (haftungsbeschränkt) is the same legal form with less capital: it can be founded with share capital below €25,000, in practice from €1, but the capital must be paid in full in cash before registration, and a quarter of each year's profit (after losses carried forward) goes into a legal reserve until it grows into a full GmbH (§ 5a). German partners may read a €1 company as thin, so weigh that.

The federal founders' portal lists the running costs: chamber (IHK) fees, tax adviser and accounting, annual financial statements and their publication, the Transparency Register, insurance and banking. Its figures date from 2015, so we do not repeat them; ask a German tax adviser for a current quote.

The Netherlands: BV

A Dutch BV can be set up with starting capital of €0.01, through a civil-law notary, in person or online; the notary registers the company and its directors in the KVK Business Register. Business.gov.nl puts the notary's fee at roughly €500 to €1,500 and bookkeeping at roughly €600 to €1,800 a year, and the KVK registration is a one-off €85.15. That is not a first-year total.

Ireland: an English-speaking option

An Irish private company limited by shares (LTD) lets you work in English under common law. Watch one rule: at least one director must be resident in an EEA state, unless the company holds a €25,000 bond in the prescribed form (Companies Act 2014, section 137). See our Ireland market page for how Irish public buyers purchase.

What every subsidiary adds

Whichever country you choose, the subsidiary becomes the importer and declarant, needs its own EORI number for customs, and must be identified for VAT where it makes taxable sales (Article 214 of the VAT Directive). It also becomes the EU economic operator responsible for your products under product-safety and CE rules (see the compliance checklist). A first hire adds local contracts, payroll and social security.

What this route does better: control of price, brand and customer data, and a first-hand view of the market. What it does worse: fixed costs that start before revenue.

Route 3: direct online sales

VAT: no small-seller threshold for a US company

The EU's €10,000 threshold for cross-border sales to consumers applies only to a supplier established in a single member state (Article 59c of the VAT Directive). A US seller cannot use it, so VAT is due in each customer's country from the first sale. The One Stop Shop lets you declare that VAT in a single quarterly return instead of registering everywhere: the non-Union scheme for services, the Union scheme for goods already inside the EU, and the import scheme (IOSS) for goods shipped from outside the EU in consignments worth no more than €150 (Article 369l). A seller not established in the EU must appoint an EU-established intermediary to use IOSS (Article 369m). On a marketplace, the platform is treated as the supplier for VAT on imported consignments up to €150 and on goods in the EU sold by a non-EU seller (Article 14a). Check your setup with an EU VAT adviser before you launch.

Customs: the €150 duty exemption is gone

Council Regulation (EU) 2026/382 deleted the customs duty relief for consignments worth up to €150, with effect from July 1, 2026. Until July 1, 2028, a flat duty of €3 per item applies instead to low-value consignments imported under IOSS and to postal consignments; the regulation says other operators pay the normal tariff. The Commission's Access2Markets notice describes the €3 duty as applying regardless of the VAT regime and adds that product identifiers become mandatory in these declarations from November 1, 2026. Because the two texts read differently, confirm the treatment of your shipments with your customs broker.

Product safety, fees and service

A consumer product may not be placed on the EU market unless an economic operator established in the EU is responsible for it (Article 16 of the General Product Safety Regulation). If you sell direct, that is a responsible person you appoint, not a distributor.

On Amazon.de the Professional plan costs €39 a month excluding VAT, the Individual plan €0.99 per item sold, and most referral fees fall between 8% and 15%. Add fulfillment, returns and customer service in the buyer's language.

What this route cannot reach

Hospitals, schools and municipalities do not check out from a web store. Above the EU thresholds they award contracts through procurement procedures and publish who won (Directive 2014/24/EU, Article 50); in many product categories the winner is a dealer or distributor, not the manufacturer. A web store does not get you onto those contracts.

What this route does better: full margin and direct contact with consumers. What it does worse: VAT, customs and product-safety duties land on you, and institutional buyers stay out of reach.

A decision guide

• Your buyers are hospitals, schools, municipalities or facilities managers: start with a distributor. Find one that already wins public contracts in your category, in one country first. Which market to choose first helps with the country.
• You sell a consumer product with brand pull: sell online, register for OSS or IOSS through an intermediary, and appoint an EU responsible person before the first listing.
• One country already brings steady revenue: consider a subsidiary there, often alongside the distributors you already have.

What this means for a US manufacturer

For most industrial and institutional products, the cheapest test of Europe is one distributor in one country. The tariff picture has also changed: see EU zero tariffs on US industrial goods and why 2026 is a good year to start. If you are weighing paid help from the US government, compare the options in US Commercial Service fees in 2026.

Cresques works on the shortlist step: you create a market (a country plus your CPV categories) and see which companies have won public contracts in that category, with the award history behind each name. The Free plan covers one market map; paid plans are on the pricing page, and more for US companies is on /for/us-manufacturers. Cresques does not help you bid for public contracts, and it does not set up companies or VAT registrations.

Disclosure: Cresques is our own product.