Why should Chinese citizens contact Regulated United Europe when starting a business in Europe?

For foreign investors looking to start an entrepreneurial activity in a country of the European Union, it is essential to have a clear understanding of the regulatory environment, corporate administration specifics, tax regimes and compliance requirements. For Chinese citizens entering the European market for the first time, correctly structuring the business model, ensuring compliance with local rules and minimising legal risks is paramount. European states apply strict standards when it comes to verifying the sources of funds, the transparency of ownership structures, tax reporting and fulfilling obligations in the field of anti-money laundering and counter-terrorist financing. Therefore, a lack of local expertise can result in delays to company registration, banks refusing to open accounts and difficulties in obtaining licences or permits. It is especially important for companies from China to properly build their operational model in the EU, as European regulators pay increased attention to cross-border structures connected with third countries. Enhanced checks on beneficiaries, analysis of business reputation, confirmation of the source of capital and verification of the ownership chain are essential elements of any project, whether it involves trade, e-commerce, fintech platforms, investment structures or startups related to digital assets. In addition to legal requirements, future entrepreneurs need to consider European accounting standards, the specifics of local contract law, hiring employees and the tax residency of the company and its founders.

While the European business environment offers significant opportunities for growth, it requires professional support from the outset. A properly built corporate structure allows for tax optimisation, operational stability and minimisation of future claims from regulators. For Chinese entrepreneurs accustomed to a different legal system, adapting the business model to the requirements of a specific jurisdiction — be it the Czech Republic, Lithuania, Estonia, Malta or Cyprus — is especially important. Differences in corporate law, document processing times, KYC rules, banking and fiscal policy require an individual approach to be taken for each project. The final part relies on the practical side of the matter. Regulated United Europe supports Chinese clients with company registration, crypto-business licensing, compliance, taxation, structuring cross-border operations and opening bank or payment accounts. The company ensures that projects are adapted to local legislation and that a sustainable business infrastructure is created in the EU. Thanks to its experience of working with Chinese entrepreneurs and its knowledge of European regulatory specifics, the company is a reliable partner for investors looking to enter the European market with minimal risk and maximum efficiency.

At the very beginning of launching a business in the EU, a Chinese entrepreneur will encounter

Starting activities in the European Union requires adapting the business model to a regulatory environment that differs significantly from Asian business standards. The correct choice of corporate structure is particularly important at the start, as the legal form of the company determines the taxation procedure, level of liability, reporting requirements and possible licensing restrictions. European regulators require confirmation of real economic presence, such as an office, personnel, local contracts and other business activities, which serve as proof of substance and form the basis for tax residency and trust from financial institutions. One of the most sensitive stages is opening a current account with a bank or fintech institution. European institutions conduct thorough checks on the origin of funds, business reputation, ownership structure and planned operations. Any discrepancy between the declared activity and the actual business model will result in refusal. Without access to banking instruments, it is impossible to organise payments to and from suppliers and clients properly, or to conduct export–import operations or accept e-commerce payments.

An important element at the outset is registering for VAT in those states where the place of taxation arises. Errors in determining tax jurisdiction can result in fines, the need to recalculate operations, account suspensions and claims from tax authorities. The European system for monitoring the payment of indirect taxes is technically complex and, for Chinese entrepreneurs working in the EU for the first time, it often poses operational risks. Strict requirements also apply to the AML/KYC sphere. European regulators verify the origin of capital, the ownership structure, the identity of all parties involved, and adherence to sanctions regimes. Companies that have not built a proper internal control system may face operational restrictions, banking refusals and an inability to obtain licences in regulated sectors.

Proper execution of employment relations in accordance with national laws is required when forming a personnel structure, including rules on working time, social contributions, the procedure for signing contracts, and the status of foreign employees. Founders and key specialists also need to obtain residence and work permits, which is connected with migration quotas, income source checks, and business plan requirements. Intellectual property protection adds an additional layer of complexity. Chinese companies bringing a product to the European market must register trademarks, distributor agreements, software rights and commercial designations in advance. Absence of brand protection opens the way for dishonest competitors and creates obstacles to further expansion.

Taken together, all these factors create an environment in which strategic decisions must be made with regard to legal, operational and tax consequences. EU regulations imply a high level of transparency, establishing a link between a company’s activities and the jurisdiction in which it operates. They also imply the need to comply with numerous procedures that may not be obvious to Chinese entrepreneurs without professional local support.

Under these conditions, consulting support is invaluable in helping businesses adapt to European standards, reduce regulatory risks and ensure project stability. Regulated United Europe provides comprehensive assistance at all stages, including choosing a jurisdiction, establishing a local presence, opening a bank account, VAT structuring, ensuring compliance, obtaining licences, and dealing with migration matters. This allows Chinese entrepreneurs to enter the EU market with confidence and launch scalable projects with minimal operational obstacles.

Independent launch vs launch through Regulated United Europe

The hidden costs of the ‘do-it-yourself’ approach for Chinese entrepreneurs in Europe

For many Chinese entrepreneurs entering the European market for the first time, the initial desire to minimise expenses and refuse professional support often results in hidden costs that far exceed the savings on consultancy. The European legal environment is strictly formalised, and any deviation from regulatory requirements leads to repeated procedures, additional payments and delays to business launches. One of the first consequences is having to pay state fees multiple times due to redoing incorporation documents, amending the articles of association or correcting applications that do not meet the requirements of the registry authorities or tax office. Another cost is the rent for office, warehouse or other premises, paid in the absence of operational activity. Most European banks conduct enhanced due diligence, which can lead to delays of several months in opening an account. During this time, the company is forced to extend the lease, pay utilities and maintain infrastructure, all without being able to operate fully. To ensure minimal cash flow, entrepreneurs often resort to alternative payment solutions with excessive commissions and limited functionality, which increases operating costs further.

Errors in tax administration create additional financial risks. Late VAT registration or untimely submission of reports can result in fines and interest charges. EU tax authorities strictly monitor whether transactions are taxed in the correct place, so mistakes in primary documents, an absence of a VAT number or incorrect preparation of issued invoices can result in a transaction being impossible to execute, a contract being terminated or incoming payments from counterparties being blocked. The loss of business partners is a direct consequence of such situations. European clients refuse to cooperate with companies that cannot provide the correct documentation or ensure timely settlement. Unplanned trips to Europe and the need to pay for interpreter services to interact with banks, notaries or regulators are an additional source of costs. For entrepreneurs who are unfamiliar with the local legal system, it is often necessary to participate in person in the process, as many authorities require explanations, supporting documents and in-person attendance. Any mistake during the communication stage will trigger the need for additional visits, increasing expenses and significantly delaying the launch of the business.

Reputational risks are no less significant. Payment blocks, delays to bank transfers, chargebacks and payment systems refusing to work with the company create a negative backdrop to all subsequent operations. For European partners, the stability and reliability of the payment infrastructure is a key criterion when choosing a counterparty, so banking problems can undermine trust from the outset and prevent entrepreneurs from accessing high-margin markets. These factors make launching a business independently in the EU extremely costly, particularly for inexperienced Chinese companies lacking the language skills and understanding of local legal norms required to work with European regulators. This is why professional support is not just an additional budget line, but a tool for saving resources, time and reputation. As part of the project, Regulated United Europe provides Chinese clients with comprehensive document preparation, interaction with banks and state authorities, tax structuring, and control over compliance with regulatory requirements. This significantly reduces both direct and hidden costs associated with setting up.

Typical problem scenarios and how they look in practice

Below, we analyse mistakes made by our Chinese clients without disclosing any personal data.

Scenario 1: Company registration in a ‘convenient’ country without considering substance. The result is a refusal to open an account, followed by an attempt to open one in another country and inconsistency between the stated business activities and the actual business activities. Months are spent and two sets of incorporation services are paid for, but the business has not started. The solution through an agent involves adjusting the corporate structure, providing proof of an office and director, opening an account and updating the contracts.

Scenario 2: Online trading across the EU without VAT registration or OSS. Result: accumulated tax risks; at the same time, the PSP increases reserves/withholdings and chargebacks grow. The solution through an agent is urgent VAT/OSS registration, recalculation of invoices, updating prices and negotiating with the PSP to release withholdings after submitting a compliance package.

Scenario 3: A distribution contract under ‘universal’ English law. The result is that, in the country of sale, some of the provisions are found to be inconsistent with mandatory rules, resulting in a dispute and suspension of supplies. The solution through an agent is a new version of the contract under local law, an agreement with the distributor and a relaunch of supplies.

Scenario 4: A trademark application is filed after marketing has started. Result: conflict with an earlier application by a third party. Solution through an agent: analysis of classes; negotiations; choice of alternative designation; accelerated re-filing; and fixation of IP rights.

Scenario 5: The UBO file and source of funds are unprepared. The result is three consecutive refusals from banks/EMIs; the project is ‘on fire’ and contracts with European partners are under threat. The solution through an agent involves collecting evidence of the origin of funds, legalising documents and submitting them to the relevant payment institutions while correctly positioning the risk profile.

Financial costs: the comparative cost of mistakes made by a European company during the first 6–12 months.

What a Chinese entrepreneur may overlook when setting up a business in Europe

Entering the European Union market, a Chinese entrepreneur often finds that the European regulatory model is not only built around formal requirements, but also around many hidden parameters that are not obvious at the project planning stage. One of the key factors is the criteria used by banks, which vary significantly across jurisdictions and industries. Financial institutions evaluate not only the ownership structure, but also country and sanctions risk. They determine the level of trust based on the origin of the beneficiary, the nature of the operations and the business model. Even a correctly prepared document package does not guarantee an account will be opened if the bank believes the client does not meet its internal risk policies. This can lead to delays, the need to search for alternative providers and additional costs.

European regulators’ requirement for proven economic substance is of major importance. Many Chinese entrepreneurs do not realise that real operational activity is required for tax residency, VAT registration and opening a bank account: a director or manager must be present in the country of incorporation, there must be a physical office, local phone numbers, contracts with suppliers, commercial documentation and business activity corresponding to the declared model. The absence of substance is perceived as a sign of a high-risk structure and can quickly result in refusals from financial institutions and tax authorities.

The legal specifics of operating in European consumer markets can also be an unexpected factor. The EU has strict consumer protection rules, including obligations regarding returns, warranties, geo-pricing and the prohibition of customer discrimination based on country of residence. Incorrect return policies, poor customer support or product information that fails to meet EU standards can result in complaints, fines and suspension of seller accounts. These issues are particularly pertinent to e-commerce, marketplace businesses, and B2C product sales.

At the team-building stage, entrepreneurs encounter mandatory funds and social contributions when hiring employees. European labour law provides strong worker protection in the form of mandatory insurance contributions, strict occupational safety rules, reporting to social funds and minimum standards for working conditions. Non-compliance can result in labour inspections, fines and increased regulatory scrutiny.

Data protection becomes critically important. The GDPR regulates the collection, storage and processing of personal information, including the use of cookies, marketing tools and user data. Even minor violations, such as formal non-compliance with cookie banners, can result in claims, leading to additional expenses and adjustments to internal processes.

Importers and manufacturers also require special attention. European legislation includes an extended responsibility for product safety and compliance with load, chemical, and environmental standards (WEEE, RoHS), as well as product registration, recycling fees, labelling, and reporting for packaging materials. Failure to comply can result in sales bans, product withdrawal and fines.

Intellectual property creates another set of risks. Incorrectly selecting classes during trademark registration, having a name that is too similar to an existing brand, and not protecting your domain or advertising assets can lead to disputes, conflicts, blocked advertising campaigns, and loss of the ability to promote your product in the EU. A mistake at this stage often necessitates a complete rebrand.

The tax sphere also contains many hidden risks. Entrepreneurs often underestimate the risk of establishing a permanent presence, the impact of controlled foreign company (CFC) regulations, or transfer pricing requirements. Incorrectly assessing these factors can lead to additional tax assessments, tax investigations and the need to retroactively adjust the corporate structure.

These elements form a complex set of risks of which Chinese entrepreneurs are often unaware in advance. The European regulatory system requires a high level of detail, and failing to consider even one of these aspects can lead to significant legal, tax and operational risks. In these circumstances, support from a professional consulting firm can prevent mistakes and ensure successful business adaptation in the European market.

When is a legal agent necessary?

It is critical in situations where launching or scaling a business in the European Union requires a comprehensive approach across several regulatory dimensions at once. The highest risks arise in projects whose business model covers multiple EU countries simultaneously, as differences in tax regimes, accounting requirements, data protection rules, licensing and consumer law make uniform compliance impossible without specialised legal guidance. European regulators view cross-border business models as highly complex, which automatically increases scrutiny from banks, customs authorities, tax authorities, and supervisory bodies.

An additional layer of complexity arises when founders or beneficiaries are non-EU residents. Foreign status automatically increases the volume of documents required for KYC/AML, complicates access to banking services and raises questions about the origin of capital, ownership structure and the company’s real economic presence in Europe. Without a legal intermediary, processes such as opening a bank account, registering a company, submitting documents to tax authorities, or interacting with licensing bodies can take months.

When the business is connected to sensitive categories of goods or services, such as cryptocurrencies, fintech, medical devices, cosmetics, children’s products, dual-use goods, cross-border logistics or large-scale e-commerce, legal support is not just recommended, it is essential for operational security. These sectors are subject to heightened regulatory supervision and require special permits, certifications, internal policies and regular reporting.

A legal agent can significantly speed up access to payment solutions. EU payment providers and banks apply enhanced checks to clients from third countries, so the success of onboarding depends directly on correctly prepared documents, a well-substantiated business model, proven substance and a legally sound corporate structure. Having a professional representative reduces communication costs, prevents service refusals and provides access to higher-quality financial providers.

Legal support also plays an equally important role in synchronising key business processes, such as tax planning, contractual frameworks, brand protection and trademark use. Mistakes in one area can create risks in another, such as triggering permanent establishment status, attracting tax claims, incurring fines for copyright violations or advertising blocks, or breaching consumer rules.

If founders or employees are planning to relocate to Europe, a legal agent is the most effective way of solving migration issues, such as document preparation, choosing the right residence permit programme, providing support at local institutions, coordinating employer actions, processing family applications and developing a long-term immigration strategy. Errors in this process can result in refusals, delays and the need to resubmit applications.

Overall, a legal agent is necessary wherever the business intersects with regulation, cross-border capital movement, European labour and tax law, complex categories of goods and services, or the need for stable interaction with banks and government authorities. Professional support reduces the risk of mistakes, ensures transparency of the corporate model and accelerates entry into the European market, making the involvement of a specialised consultant a key element of a successful project.

Why should Chinese citizens contact Regulated United Europe?

Chinese entrepreneurs planning to enter the European Union market must synchronise numerous regulatory, operational and tax requirements from the outset. The European environment is built on the principles of transparency, documentary evidence and strict control of capital flows. Therefore, any inaccuracy in the business structure or document package can lead to delays at banks, refusals from payment providers, mistakes in tax registration or issues with product certification. For entrepreneurs working within the European legal system for the first time, ensuring consistency between the corporate structure, banking model, contractual framework, tax registration and intellectual property protection is especially important.

A successful business launch in the EU requires choosing the right jurisdiction and legal form suited to the specific business model, whether that is trade, manufacturing, e-commerce, IT platforms or fintech. Each country has its own requirements regarding share capital, the composition of the board of directors, a physical presence and reporting. At the company formation stage, entrepreneurs must prepare accurate incorporation documents and an up-to-date UBO file with proof of the source of funds and the ownership chain. They must also establish a model that is acceptable to banks and fintech providers. Without this preparation, the business is highly likely to face banking refusals or repeated checks.

Taxation is another critical area. Errors in VAT registration, choosing the wrong option between local VAT registration and the One-Stop Shop (OSS), failing to keep a tax calendar, or misaligning the operational model with VAT rules can result in fines, account blocks and delays to refunds. Additionally, entrepreneurs must prepare the contractual framework under the chosen governing law, ensure the accuracy of user agreements and e-commerce documentation, and safeguard trademarks and brands from conflicts within the European intellectual property system.

Special attention should be paid to product safety obligations, logistics, import procedures and environmental responsibility. EPR categories, recycling fees, packaging requirements, WEEE and RoHS reporting, and importer liability are mandatory for many product groups. Failure to comply with these obligations can result in goods being blocked at customs, fines, or bans on distribution in the European market.

Once a project has encountered refusals, delays or payment blocks, corrective action is required, including analysing the initial structure, repackaging the case according to banking criteria, restoring documentation, adjusting the tax logic and establishing an operational framework that meets regulatory requirements.

This is precisely the stage at which professional support becomes essential. Finally, it is important to note that the Regulated United Europe team provides clients from China with comprehensive support, including synchronising corporate structures, onboarding banks, registering for taxes, advising on contract law and brand protection, and fulfilling importer obligations. This creates a sustainable roadmap for launching a business in the EU and helps to restore projects that faced obstacles during independent entry.

We are ready to discuss your business model, target countries and payment flow in order to provide you with a clear plan containing step-by-step timelines and the names of the people responsible – with no surprises and transparent pricing.