Every Swiss business that isn’t yet selling to customers in other countries surely knows that exporting its goods will require the consideration of customs delays and fees.
Whether your company is selling from Switzerland to an EU member just next door, such as Germany, or to South America, it’s the same concept: as the goods are exported, and then imported into the destination country, customs fees and clearance will be required. This means three things: a cost, some bureaucracy to take care of, and a delay.
Shipping to the EU
The good news is that, when it comes to shipping to EU countries, the delays a Swiss business will face are not as significant as many might fear. Goods can generally be shipped from any EU country, and delivered to any other EU country the next day. For most small and medium businesses, the delay added by customs if you are shipping from Switzerland will be around one extra day. And larger businesses shipping more than, say, 50 packages a day are likely to set up in a way that avoids the delay entirely.
Similarly, the bureaucracy and paperwork isn’t as much trouble as many companies might assume. For e-commerce sellers, there is generally no requirement to create a legal entity in the EU country you are exporting to, so there’s no additional annual tax returns, for example, to worry about. In some cases Swiss companies may not even need to register for VAT in the EU.
When selling to Europe, import VAT is due - but there are several ways to manage this
And, for most small to medium e-commerce businesses, any other bureaucracy will normally be taken care of by your shipping provider. So while you are paying more to the company making the delivery for you, in exchange they will be looking after the paperwork required, and just sending you the bill.
Financial cost of exporting
While the delays and bureaucracy caused by the border are real but not necessarily too problematic, the third thing for Swiss companies to consider is the financial cost of exporting. Under current trade agreements most goods exported between Switzerland and the EU and vice-versa are free from tariffs, but it is important to remember that products made overseas (say, in China), imported to Switzerland and then exported to the EU, will attract charges based on their origin. And in every case there are some additional costs to the exporting company to consider.
More information on the rules of origin and proofs of origin
Options for Swiss companies exporting into the EU
Broadly, there are three options open to companies exporting into the EU. For a very small number of consignments - say a few each day - a small or start-up business can likely rely on the standard postal service. This is inexpensive and simple, but does leave the recipient liable to pay import VAT, so it’s not so seamless.
For those selling at a medium volume, the best solution is most likely paying a logistics service - this could be Swiss Post, or someone like UPS - to manage both the delivery and the export paperwork and fees. A so-called Delivery Duty Paid (DDP) logistics service is more expensive than regular shipment, but the carrier will handle the export and VAT aspects, so delivery to customer is seamless and does not require them to pay anything further. These services are designed for medium-sized exporters, and often have a minimum volume - for example, Swiss Post requires 1,000 consignments each year.
DDP versus DAP: the terminology explained
For businesses shipping at higher volumes, though, sending everything from within Switzerland via DDP services could become a bottleneck. This is where the third option comes in: for those shipping to the EU in large numbers, it may make sense to export stock in bulk to an agent based in a neighbouring EU country, and then contract that agent to fulfil EU orders from its EU base - with no delay, and no import fees to consider at the point of that dispatch to the customer. More information on the advantages and disadvantages of this system can be found here.
Key Points
- Selling across the border introduces a small delay.
- For many sellers, logistics services can handle the export process.
- At higher volumes, warehousing inside the EU becomes attractive.
About the author
Marco Di Pietro is Founder and CEO of Ideapura, a boutique consultancy specialising in e-commerce and RFID product tracking. He previously founded Temera Srl, which focuses on innovative technologies for the fashion and luxury industries, and worked as Director of Operations at Yoox and as a director at Prada Group.
