Licence for carriage of goods in the EU

Obtaining a license for freight transportation in Europe is a process that allows a company to legally work as a freight carrier in the territory of the European Union and EEA countries.

Each country has its own rules and requirements for obtaining licence for carriage of goods, including a number of legal, tax and administrative issues. Obtaining a license by a company requires attention and an accurate approach when filling out the documents and performing all the procedures.

The legislation of European countries requires the transportation company to employ minimum one certified employee (transport manager) who is of good repute and occupationally competent to control the company's activities and freight transport. It is also reuquired that the company has a certain amount of money on its account. Apon meeting the above requirements, it is necessary to prepare and submit documents for obtaining a transportation license. One should submit a filled application, qualification certificates, driver's licenses, employment contracts and much more.

Our client planned providing freight services with its own truck with a carrying capacity of up to 20 tons. Thus, obtaining a licence for carriage of goods was a necessary element to start the company's operational activities.

The ultimate goal is to receive a license for freight transportation in Europe

The client set us the task of registering a company in a European country , in order to obtain a license for it as soon as possible and start a business of transporting goods with its own freight transport.

What requirements must be met to start a business of a licensed freight carrier in the EU

• Register a company in Europe;
• Get a license for carriage of goods;
• Register vehicles (trucks) for the company;
• Employ a proffesional person responsible for cargo transportation. The employee must competent and undergo special courses;
• Register for VAT number;
• Obtain an EORI number (required by any European company that transports goods between different countries in the EU).

How we solved the case of obtaining a European license for freight transportation

Taking into account and analyzing all the client's requirements, we recommended registering the company and obtaining a license in Estonia.

Read more about company formation in Estonia.

And here is why.

Arguments in favor of registering a company in Estonia to obtain a license for freight transportation

In recent years, entrepreneurs have increasingly chosen Estonia to do business. This is due to the fact that business owners get rid of the headache associated with company administration, bookkeeping, reporting, etc.

An important component when choosing a jurisdiction is the remote registration procedure. Registering a transportation company in Estonia eliminates the need to be distracted from actually doing business. You can register a company for carriage of goods in Estonia with the help of an E-residency card, which can be obtained with our assistance. Alternatively you can set up a company using a POA.

An Estonian company does not need to officially employ a director and pay a salary, which has a positive effect on the speed of registration and ease of administration.

A special tax system is one of the main advantages in favor of this jurisdiction. Corporate income tax is 0% (tax is paid only distribution of dividends). Therefore, the profits received from the business activity can be reinvested in the business without paying corporate taxes.

Estonian legislation stipulates that an application for a Community license is required when carrying goods for remuneration is carried out by a motor vehicle or road train, the mass of which exceeds 3,500 kilograms and the speed of which exceeds 40 kilometers per hour.

Obtaining VAT and EORI

VAT and EORI numbers are received within 1-2 working days.

The VAT number will allow the company to apply the VAT Reverse Charge mechanism to conduct b2b sales .

An EORI number is required for transportation within the EU.

The speed of launching a new business model

Obtaining an E-residency card takes 1 month.

Registering a company in Estonia using E-residency takes several working days.

Obtaining a Community license for carriage of goods by motor vehicles in Estonia takes from 2 to 9 weeks, depending on how quickly the client can arrange all what is necessary to submit an application.

Requirements for obtaining a license for cargo transportation in Estonia

• Have a registered company in Estonia;
• Show proof of 9,000 EUR on the company's bank account for the first motor vehicle and 5,000 EUR for each next vehicle;
• The company should employ at least 1 transportation manager with professional competence. This means that it is necessary to hire an employee who is competent and of good reputation to occupy such a position. The transportation manager must show proof of competence - usually he can complete a relevant course in any EU country;
• Within six months upon obtaining the license, the carrier must have at least one vehicle for cargo transportation. In our case, the client already had a motor vehicle.

If the company owns a truck (not rents it), the cash balance requirement is waived.

The procedure of obtaining a license for cargo transportation in Estonia

1. Register a company in Estonia and obtain VAT and EORI numbers;
2. Bring a motor vehicle to Estonia and register it with the Estonian Transpor tAdministration in the name of the Estonian company;
3. Employ a transport manager (if you do not have suitable candidates, we will help with the search);
4. Prepare and submit an application for obtaining a license;
5. Pay the government duty.

What is required to obtain a license for cargo transportation in Europe:

• Completed application;
• Name, surname and identification code of the director of the company or, in the absence of such a code, date of birth and contact details (phone number and e-mail address);
• A document confirming the appointment of the transport manager (employment contract and consent of the employee);
• A document confirming the professional competence of a transport manager (certificate of completed courses).

Why you should contact Taxters for obtaining a freight transportation license in the EU

• We know all the requirements, procedures and documents needed to obtain a carriage of goods license in Estonia and other popular jurisdictions (e.g. Lithuania);
• At the very beginning, we advise on the selection of jurisdiction and organizational and legal form of the company, ownership structure and other financial and corporate aspects;
• With more than twelve years of experience, we help clients successfully enter the foreign market to scale their business;
• We help optimize the tax burden and ensure compliance with the country's tax rules;
• We are well versed in the company registration procedure and are familiar with the requirements for obtaining licenses for cargo transportation, so we quickly prepare the necessary documentation, ensure interaction with the relevant authorities and speed up the process as much as possible;
• We do not solve problems, but prevent them from happening.

Click on the "Quick consultation" button and our team will be happy to help and answer all your questions.

Sources

• Road Transport Act
• Regulation (EC) No 1071/2009 of the European Parliament and of the Council of 21 October 2009 establishing common rules concerning the conditions to be complied with to pursue the occupation of road transport operator and repealing Council Directive 96/26/EC (Text with EEA relevance)
• Regulation (EC) No 1072/2009 of the European Parliament and of the Council of 21 October 2009 on common rules for access to the international road haulage market (recast) (Text with EEA relevance)

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Information is also available in Ukrainian and  Russian.

Author: Valeriia Nevinchana, July 2023.