Where to hold stock in Europe: the Netherlands, Germany, France or Spain?

Once you have decided to hold stock inside the EU, the next question is where. It gets answered badly more often than almost any other question in cross-border e-commerce, usually with "wherever the warehouse quote was cheapest".

The per-order rate is the smallest of the differences. What separates these countries is when you pay import VAT, whether you need a representative, and how many customers sit within a domestic delivery of your stock.

This article compares four candidates on those points, and then hands the rate question to the live rate card rather than to a sentence someone wrote once.

What actually differs between countries? #

1. Reach. How many customers are within a domestic or one-day parcel of your stock. This is the largest effect and the one people underweight.
2. Import VAT timing. Whether you pay VAT at the border and reclaim it later, or report and deduct it on the same return. It is a cash-flow question, not a cost question — but on a big bulk shipment it is a large cash-flow question.
3. Fiscal representation. Whether a business established outside the EU needs a local representative, and what they charge, including any deposit or bank guarantee.
4. Registration lead time. Days to a few weeks for an EU business; several weeks or more for a non-EU business appointing a representative.
5. Running cost. Filing frequency, bookkeeping, and the local rate for warehousing or fulfilment.

Note what is not on that list: the VAT rate itself. You charge the rate of the country your customer is in, not the country your stock is in, so a low domestic rate somewhere buys you nothing on consumer sales.

Why holding stock creates a registration at all, and why OSS does not remove it, is in VAT when you store stock in another EU country.

The four countries side by side #

The Netherlands — the cash-flow answer

The Dutch differentiator is the Article 23 licence. It lets you reverse-charge import VAT to your periodic Dutch VAT return instead of paying it at the border and reclaiming it months later.

On a bulk shipment worth tens of thousands that is a large amount of working capital you do not have to lend to the tax authority. It is the single most-cited reason to route EU imports through Rotterdam.

A business established outside the EU generally cannot hold the licence directly and works through a fiscal representative who does. Expect a deposit or bank guarantee alongside their fee.

What the Netherlands does not give you is a large domestic market. It is a hub, and it is an excellent one; it is not Germany.

Germany — the market answer

The largest consumer market in the EU, and the one where a domestic parcel matters most simply because you send the most of them.

If most of your EU revenue is German, holding stock anywhere else means every German order is an intra-EU parcel rather than a domestic one — a transit day and a rate difference, on every order.

The trade-off is administrative. German registration and filing are known for being slower and more exacting than the Dutch equivalent, and the import VAT deferral is less straightforward to use in practice.

A common answer is both: import through the Netherlands, hold your German stock in Germany. That is two registrations, and it only makes sense at real volume.

France — automatic deferral, big market

Since 1 January 2022 import VAT in France is reverse-charged automatically on the French VAT return. There is no licence to apply for; it applies to anyone with a French VAT number.

That removes the main reason to prefer the Netherlands on cash flow, and France has a considerably larger domestic market than the Netherlands does.

The reasons people still hesitate are practical rather than fiscal: French administration is exacting, and returns handling in France is often quoted higher than in the Netherlands or Poland.

If France is your first or second EU market, it is a strong choice and an underused one.

Spain — right for Iberia, wrong as a hub

Spain has a deferment scheme, generally tied to monthly VAT filing, and warehousing and labour are cheaper than in the northern countries.

It is the right answer if Spain and Portugal are your market. It is the wrong answer as a European hub: the road leg to Germany, the Netherlands or Scandinavia costs days and money on every order.

The same logic applies in reverse to Poland, which is cheaper still and further from western customers.

What does a domestic parcel cost from each? #

This is the part that goes stale in every article like this one, so it is not written here. The table below is generated from the live rate card.

A country missing from that table has no domestic service today. That is a measurement rather than an omission, and it can change without this article being rewritten.

Read it alongside the fixed costs above rather than instead of them. A cheaper domestic label in one country does not make up for a registration you cannot administer.

How do you choose? #

1. 1

   Start from where your orders already go

   Split one real month of EU orders by destination country. In most shops one country is 40% or more of the total, and that country is your candidate.

2. 2

   Check whether it has a domestic service today

   Use the table above. A country with no domestic service is not a candidate however good the tax position looks.

3. 3

   Ask what deferring import VAT is worth to you

   Take the VAT on one bulk shipment and ask how long you can afford to have it out of your account. If the answer is "not long", weight the Netherlands or France heavily.

4. 4

   Get a quote for a fiscal representative in your top two

   This is the fixed cost that decides the break-even, and it varies more between providers than between countries. Ask about the deposit separately from the fee.

5. 5

   Run the break-even on that country alone

   Fixed cost per month divided by the saving per parcel. The method, with a chart, is in the break-even article.

6. 6

   Start with your best sellers, not your catalogue

   One bulk shipment of the items that move, in one country. You will learn more in a month of running it than in another week of comparing tables.

The break-even method, including how the €3 per product type on imports moves it, is in IOSS versus holding stock in the EU. Once you have picked a country, the country-specific route — customs, VAT, packaging law, what customers expect — is in how to ship to Germany without a German warehouse and its French and Benelux counterparts.

What this decision does not solve #

• ✕It does not remove the local VAT registration. Every one of these countries creates one the moment your stock arrives.
• ✕It does not help a wide catalogue. If your orders pull from hundreds of SKUs, one location will split orders rather than consolidate them.
• ✕It does not decide your fulfilment model. A warehouse, a small 3PL and a person with a spare room all sit in the same country.
• ✕It does not fix a product that is too large, heavy or regulated to hold anywhere but a proper warehouse.
• ✓It does decide two things that compound on every order: the transit time to your biggest market, and when you part with your import VAT.

Which fulfilment providers operate in each of these countries, and what they publish about minimums, is in EU fulfilment without minimum orders compared.

The cheapest warehouse in Europe is worth nothing if it is two days from the customers you actually have.