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3 Nov 2000, UK
Dear Dr. Ecommerce,
My German Company is considering expanding into other European Countries, overseas and in particular the United kingdom and other common law countries.
My company intends to develop an internet service for the supply of goods and services throughout Europe.
I read the Directive on E-commerce of the European Parliament and of the Council of June 2000, and I found an article on the internet that claims that Brussels Regulation on Jurisdiction and the Rome II Convention on contracts undermine the E-commerce Directive. That article also says that there is a possibility of a new Brussels legislation which would put UK internet traders under the jurisdiction of 15 states, since the law of the country in which goods are bought would apply.
My questions are:
1) Where should my company set up its internet service for the supply of goods and services?
2) What law will regulate the provision of my service?
3) Where will tax be paid?
4) Are there any limits on the services I can provide, including professional services?
5) Can my company supply excised goods (alcohol and tobacco) via the internet?
I am really looking forward to hearing from you as soon as possible.
Thanks in advance,
Sandra
Dear Sandra:
As you note, there is a debate going on in Brussels right now regarding the issue of liability. Specifically, if there is a dispute between a consumer and an e-business, should it be heard in the court, and according to the laws of, the consumer's country or the vendor's country? It's hard to say how the debate will come end. In any event, I think alternative dispute resolution (ADR) services, in other words out-of-court mediation services, will be where most disputes are resolved. After all, it's hardly worth going to any court over a dispute that is worth, for example, 100 Euro.
It's worth noting that European directives are not laws in themselves. Rather they are instructions to member states. Member states must implement these instructions into their own laws within a given time-frame - usually 18 months after a directive is published in the "Official Journal of the European Communities". Ultimately, however, you are subject to your own laws and possibly your customers' laws.
Hence, you should take into account all kinds of issues when deciding where to set up your office, such as quality and cost of labour, logistics for shipping, business climate, language, legal set-up, etc. As your new office will also be subject to tax laws and willl have to pay taxes in the country it is established, it is worth looking into this issue when hunting for a location.
You will have to check local laws in the country you are established regarding any limits on services. Take a look at http://www.drecommerce.com/answers/000159.html for your question on alcohol and cigarettes.
Good luck,
Dr. Ecommerce