An EU company for Chinese exporters is being sold hard at the moment, usually as one answer to customs, VAT, product safety and packaging together. It is not one answer. It is four separate regimes with four different rules about where the responsible party has to sit, and an Estonian company sits correctly in two of them, partly in a third, and not at all in the fourth. This page lays out the whole stack, marks the boundaries, and says plainly where you will need somebody who is not us.
What changed on 1 July 2026: EUR 3 per item, not per parcel
Council Regulation (EU) 2026/382, published in the Official Journal on 8 June 2026, abolished the EUR 150 customs duty relief with effect from 1 July 2026. In its place there is a flat EUR 3 charge per item on consignments up to EUR 150 sold by distance sale from a third country.
The word that costs money is item, not parcel. An item means goods sharing a tariff classification, a description and an origin. A parcel containing four different products carries four charges, so EUR 12, not EUR 3. If your basket is a handful of cheap accessories bundled together, the arithmetic is far worse than the headline reads, and it gets worse in proportion to how cheap the goods are. Sellers of low-value multi-item baskets took the heaviest hit of anyone.
The per-item reading is the single most useful number on this page. EUR 3 applies to each distinct tariff classification, description and origin in the consignment, not to the consignment. An EUR 18 four-item parcel now carries EUR 12 before anything else. Model your actual basket composition, not an average parcel value.
The regime is transitional. It runs from 1 July 2026 to 1 July 2028, after which normal tariff classification applies through the EU Customs Data Hub. Separately, Product Identifiers become mandatory on 1 November 2026, having been voluntary since 1 July 2026. A handling fee is also due to apply by 1 November 2026, with the level set by a Commission delegated act. We are not going to quote you a figure: the number circulating widely traces to the original Commission proposal rather than to an adopted act, and we could not confirm the act as adopted.
Liability matters more than the amount. The charge sits with the declarant — the seller, the importer, the IOSS holder, the user of the special arrangements, or their indirect representative. Consumers pay only in residual cases. The party the EU wants to identify and reach is on the seller side, and that is the structural reason the direct-parcel model broke rather than merely got more expensive.
The freight numbers, and what they do and do not prove
The commercial reaction was immediate and it has not reversed. China to Europe e-commerce air cargo demand fell 24% in July 2026 month on month, to 112,000 tonnes. Freighter capacity on the lane dropped about 10% within days of 1 July and was 28 to 30% below June levels by August, with no recovery. The cuts were named and specific:
- Air China Cargo withdrew 25 weekly flights on the Europe lane
- China Central Airlines cut from 30 weekly flights to 20
- SF Express cut from 20 to 10
- Year on year e-commerce air cargo growth to Europe flatlined entirely, against plus 23% globally over two years
What that proves is that parcel economics changed structurally rather than seasonally. What it does not prove is where the volume went. The precedents are the United States in August 2025 and Brazil in August 2024, and in both cases partial recovery came within roughly twelve months, but it came through relocated inventory, not through restored parcel flows. Europe repeating that pattern is a reasonable inference and we will call it an inference. You will also see a figure quoted for the share of one large platform's European sales now running through local warehouses. It comes from a stated target in a January 2025 article, not from a measurement, and no business case should rest on it.
What an EU legal person actually gets you
Strip out the marketing and an EU company does four concrete things for a non-EU seller.
- An EORI number. Mandatory for customs, issued in Estonia by the Tax and Customs Board, and valid across the EU once you hold it
- The ability to import on your own account. You are the declarant and the importer, rather than depending on a customer, a forwarder acting as indirect representative, or a marketplace to be it for you
- OSS. Distance sales from EU stock to consumers in other member states go into a single return instead of a registration in every destination country
- A single accountable EU legal person that regulators, marketplaces and customers can identify, write to and hold responsible
Two limits on that list, and both are load-bearing. OSS does not remove a local VAT registration where you hold stock. If your goods sit in a German or Polish warehouse you are making local supplies there and you need a local VAT number there, whatever your Estonian company does. And Estonia's registration threshold is EUR 40,000 for established persons but nil for non-established persons, so a foreign seller registering directly registers from the first euro. Estonian VAT has been 24% since 1 July 2025.
One more option belongs in the list and one disclosure with it. IOSS covers consignments up to EUR 150, and a non-EU seller needs an EU-established intermediary to use it. If your model depends on IOSS, find an intermediary. We do not act as one, because the intermediary carries joint and several liability for the seller's import VAT and that is not something an accounting firm should sell casually.
GPSR: the Responsible Person can sit in any member state
This is the part where an Estonian company is not a compromise. Regulation (EU) 2023/988, the General Product Safety Regulation, has applied since 13 December 2024. Article 16 requires an economic operator established in the Union to be responsible for any product sold to EU consumers, and that operator's name, postal address and electronic address must appear on the product, the packaging, the parcel, the accompanying documents and the marketplace listing.
Article 16 says established in the Union. It does not name a member state. One EU entity can therefore be the Responsible Person for all 27 markets, and an Estonian company qualifies exactly as well as a German or a Dutch one. Enforcement is commercial rather than theoretical: since December 2024 Amazon suppresses EU listings without a Responsible Person established in the Union, the Buy Box disappears when the four required fields are not filled, and reinstatement follows within hours once valid details are saved.
Packaging EPR: an Estonian company cannot be your German representative
Here the answer runs the other way, and a provider telling you otherwise is either wrong or selling. PPWR, Regulation (EU) 2025/40, applies from 12 August 2026. Article 45(3) requires an authorised representative for extended producer responsibility in each member state where you sell and are not established.
Germany is the clearest case. The regulator ZSVR states that a foreign company without a German branch selling packaged goods to German end users must appoint an authorised representative from 12 August 2026, and that there is no exemption from the obligation. The German representative must have a registered office or branch in Germany, must be independent of the producer, must have a written agreement in German signed with qualified electronic or handwritten signatures, and must be separately registered in LUCID under their own credentials.
One representative per member state, and there is no EU-wide single window for packaging EPR. An Estonian company cannot act as your German, French or Italian packaging representative, and neither can we. What we can do is coordinate and introduce you to local representatives. Indicative market cost is EUR 150 to EUR 1,000 per country per year, with volume-based scheme fees on top. German fines reach EUR 100,000 for registration breaches and EUR 200,000 for failures to join a system; France reaches EUR 30,000 per non-registration episode plus daily penalties.
PPWR Article 45(4) also requires in-scope platforms to hold your registration number for the consumer's member state before permitting the sale. So this is not a compliance item you can defer quietly. It becomes a listing blocker in the same way GPSR did.
The 2028 deemed importer rule: a reason to build early, not something on sale today
The EU customs reform was agreed by Council and Parliament on 26 March 2026. It treats platforms and distance sellers as the importer, carrying the customs formalities and the payment. The dates matter: the handling fee by 1 November 2026, then the Customs Data Hub live for e-commerce and the deemed importer rule operative on 1 July 2028, voluntary access for other traders in 2031, and mandatory for all customs formalities on 1 March 2034. A new EU Customs Authority will sit in Lille. Penalties for systematic non-compliance reach 6% of annual import value, with access restrictions on top.
Legal commentary reads the reform as pushing non-EU sellers either to establish a real EU presence or to appoint an EU-based representative holding AEO or equivalent trusted trader status, explicitly in order to discourage shell entities. AEO is not a form. It requires demonstrated customs competence, solvency and record-keeping systems, assessed by a national customs authority. That is a 2028 date, and nobody can sell you the 2028 answer today. What it is good for is a reason to have the entity, the filing history and the records already in place, because a company with two years of clean returns behind it will be in a very different position from one incorporated in the month the rule starts.
What an Estonian company costs, and the import VAT deferment trap
Estonian formation costs are public. The state fee is EUR 265. Through e-Residency, with a legal address and contact person, the first year runs around EUR 585. Through a notary it starts from about EUR 1,320. On corporate tax, Estonia charges 0% on retained and reinvested profit and 22% on distribution, levied as 22/78 of the net distribution. The 2026 rate is 22%: the planned rise to 24% was dropped in September 2025, and the 2% security tax on profits was repealed on 19 June 2025 before it took effect. A great deal of published guidance still says 24%, so check the date on anything you read.
Now the trap, because it is the one that hurts cash flow in year one. Estonia does allow import VAT to be deferred under VAT Act § 38(2-1): the import VAT is declared in box 4-1 of the KMD and deducted as input VAT in the same return, so the net cash effect is zero. You apply through the LUBA system in e-MTA and get a decision within 30 days. But all three conditions have to hold together:
- VAT-registered for at least the preceding 12 consecutive months
- No late VAT returns in the preceding 12 months
- No tax arrears
A newly incorporated company cannot satisfy the first condition in its first year. Budget for paying 24% at the border and reclaiming it through the monthly return. It is a timing cost rather than a real one, but it is still working capital you have to find, and it is the item most often left out of a quote. The alternative is customs warehousing or temporary admission, under which goods do not trigger import VAT until they are released for free circulation, with unlimited storage duration. That route requires EU establishment, demonstrated proper conduct and a guarantee.
The objections you are going to raise, and which of them are right
You have been quoted by three agencies already, so here are the answers we would give if you were sitting in the office.
- We cannot open an Allegro or a Cdiscount local store with an Estonian company. Correct. Only a Polish entity opens an Allegro local store and receives that traffic priority, and the French local marketplaces favour French sellers. If a local storefront is the point, incorporate locally
- Our stock is in Germany or Poland, so we need VAT there anyway. Correct. An Estonian company does not remove a German VAT registration
- The German packaging representative has to be German. Correct, as set out above
- Estonian banking for a Chinese-owned, China-directed company is hard. True. China is not on Estonia's e-Residency restricted list, so the application itself is open, but banking is decided separately by each provider's own risk assessment, and a Chinese beneficial owner with no EU substance is a difficult file
- Nobody in our industry uses Estonia. Largely true. e-Residency's own origin statistics are led by Ukraine, Germany and Spain, and China does not appear in them at all
- The 0% on retained profit does not help us, we reinvest anyway. Fair. If you were always going to reinvest, the tax design is a convenience rather than the reason to do this
There is a geography point worth having straight too. Tallinn is about 1,545 km by road from Berlin, roughly 18 hours. The 1,042 km figure you will find online is the great-circle distance and no lorry drives it. Warsaw is about 1,100 km, Riga about 310 km, Helsinki 85 km plus a two-hour ferry. Muuga has natural depth to 18 metres, a 600,000 TEU container terminal and a rail connection, but Port of Tallinn runs at roughly 40% of that container capacity and is a feeder port rather than a deep-sea gateway. An Asian box calls at Rotterdam, Hamburg, Antwerp or Gdansk and is fed to Tallinn on a smaller vessel. Estonia is a good distribution base for the Nordics and the Baltics and a poor one for Germany, France and Spain.
So the defensible structure is narrow and specific. Use an Estonian company as the legal and fiscal home: the EU legal person that holds the EORI, imports on its own account, files OSS, acts as GPSR Responsible Person and keeps clean, cheap books with 0% on retained profit. Put the warehouse wherever the logistics actually make sense. Do not use it as a substitute for a local storefront, a local warehouse or local banking, because it is not one.
One boundary on our side, stated plainly. We are Estonian accountants. We do the Estonian side: the company, its books, its VAT and OSS returns, the import VAT position, the annual report, and the records a customs officer or a market surveillance authority would ask to see. A question of German, French or Polish law needs a specialist in that country, and we will say so rather than guess. If a provider offers to solve all 27 member states from one office, ask which article of PPWR they think permits that.
Frequently asked questions
Do I need an EU company to sell into the EU from China?
Not for every model, but an EU legal person is what lets you hold an EORI, import on your own account, file OSS and act as GPSR Responsible Person. It does not replace a local VAT registration where you hold stock, and it cannot hold a packaging EPR representative role outside its own country.
How much is the new EU customs charge per parcel?
It is EUR 3 per item, not per parcel, on consignments up to EUR 150 sold by distance sale from a third country. An item means goods sharing a tariff classification, description and origin, so a four-product parcel carries EUR 12. The regime runs from 1 July 2026 to 1 July 2028.
Can an Estonian company be my GPSR Responsible Person?
Yes. Article 16 of Regulation (EU) 2023/988 requires an economic operator established in the Union without naming a member state, so one EU entity can act for all 27 markets and Estonia qualifies as well as Germany or the Netherlands.
Can an Estonian company handle German packaging EPR?
No. PPWR Article 45(3) requires an authorised representative in each member state where you sell and are not established, and the German representative must have a registered office or branch in Germany and be separately registered in LUCID. We coordinate and introduce local representatives rather than hold the role.
Does an Estonian company remove the need for German VAT registration?
No. OSS reports distance sales from EU stock in a single return, but it does not remove a local VAT number where you hold stock. Goods in a German warehouse mean German supplies and a German VAT registration whatever your Estonian company does.
Can a new Estonian company defer import VAT?
Not in its first year. VAT Act § 38(2-1) requires VAT registration for the preceding 12 consecutive months, no late VAT returns in that period and no tax arrears. Budget for paying 24% at the border and reclaiming it monthly, or use customs warehousing.
TagsEU company for Chinese exporterssell to EU from China companyEU entity for Chinese sellerEUR 3 per item customs charge
General information, not tax advice
This article reflects Estonian law as it stands on the date shown. Rules change and individual circumstances differ - confirm your own position with us before acting.