Most new sellers rush into Amazon and get stuck:
verification issues
VAT confusion
suspended accounts
This guide fixes that.
I’ll show you how to set up your business, banking, and taxes so registration is smooth and your account is built on solid ground.
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Step 1: Your Legal Foundation – Sole Trader or Limited Company?
Before you sell a single item, you need a legal structure.
This choice impacts your taxes, your liability, and your administrative workload.
For most sellers, it comes down to two paths.
Feature | Sole Trader (Einzelunternehmer) | Limited Company (e.g., GmbH, LTD) |
Legal Status | 👤 You and the business are one and the same. | 🏢 A separate legal "person" from you. |
Personal Liability | ❌ Unlimited. Your personal assets are at risk. | ✅ Limited. Your personal assets are protected. |
Setup Process | 🏎️ Simple, fast, and very low-cost. | 🏛️ Complex, requires a notary, and higher costs. |
Upfront Capital | ✅ None required. | 💰 Requires significant share capital. |
Admin Effort | 👍 Low. Bookkeeping is relatively straightforward. | 🤯 High. Stricter, more formal requirements. |
Best Suited For | 🚀 New sellers testing a business idea. | 🛡️ Established businesses that are scaling. |
The Sole Trader (Einzelunternehmer): The Fast Start
Sole Trader Registration Germany
This is the simplest way to begin.
As a sole trader, you and your business are the same legal entity.
Pros: It's fast and cheap to set up. In Germany, you just register a trade (Gewerbeanmeldung) at your local town hall for a small fee, usually €20 to €60. The admin is low, so it's perfect for getting started quickly.
Cons: There’s no legal separation between you and the business. This means you have unlimited liability. If your business has debts or gets sued, your personal assets are at risk. Your car, your savings, your home.
The Limited Company (GmbH, UG, LTD): The Scalable Shield
A limited company is a separate legal entity from you, the owner.
Think of it as its own "person."
Common Register Portal Germany
Pros: The main benefit is limited liability. Your personal assets are protected from business debts. It also looks more professional to suppliers and banks.
Cons: It's more complex and expensive to set up and maintain. A German GmbH, for example, requires a notary and a minimum share capital of €25,000 (€12,500 must be paid in). The bookkeeping requirements are also much higher.
My Recommendation for 90% of New Sellers
Start as a Sole Trader.
For most new sellers, the speed and low cost are more important than the risk.
Your first goal is simple.
Prove your business model. Generate cash flow. Do it with minimal upfront cost.
Once your business is consistently profitable, you can re-evaluate. Converting to a limited company is a standard process. It's a smart move once you have something to protect.
Start lean.
Validate your idea.
Scale your legal structure with your success.
Step 2: Your Financial Engine – Banking & Tax Registration
Your legal structure is chosen. Now you need to set up the systems to handle your money and taxes.
These are hard requirements to operate legally and sell on Amazon
Open a Separate Business Bank Account.
Wise
This is Non-Negotiable.
Do not use your personal bank account.
Mixing business and personal funds is the fastest way to create a nightmare.
Your bookkeeping will be a mess, and it's a huge red flag for the tax office.
Amazon also requires a valid business account to pay you.
You have two main options in Europe:
Traditional Banks: Think Sparkasse in Germany, Barclays in the UK, or BNP Paribas in France. They have a physical presence, but setup is slow and their online systems can be clunky for a digital business.
Modern FinTech Banks: Companies like Wise, N26, or Revolut are built for entrepreneurs. Setup is fast and completely online. More importantly, they are designed to handle multiple currencies with low fees. This is essential for selling across Europe.
For my money, a FinTech bank is the superior choice for an e-commerce business.
Secure Your Local Tax ID & VAT Number
Elster, Germany
After you register your business, your next call is to the tax authority.
You need a local tax ID and a VAT number to operate.
I'll use Germany as the primary example. 👇
In Germany, you apply to the Finanzamt (tax office) for two numbers:
Steuernummer (Tax Number): Your domestic ID for the German tax system.
Umsatzsteuer-Identifikationsnummer (USt-IdNr.): Your VAT Identification Number. This is the number Amazon requires during registration.
Here’s what to look for in other major EU countries:
France: You need a SIREN number and a Numéro de TVA intracommunautaire.
Spain: Your Número de Identificación Fiscal (NIF) covers both tax and VAT.
Italy: The Partita IVA is a single number for all tax and VAT.
UK: You need a Unique Taxpayer Reference (UTR) and a VAT Registration Number (VRN).
Whatever your country calls them, apply for your tax and VAT numbers immediately after you register your business.
Do not delay this step.
Step 3: Clearing the Identity Verification (KYC) Hurdle
Once you submit your details, Amazon begins its "Know Your Customer" (KYC) process.
This is a mandatory identity check. It can feel intimidating, but it's a simple checkpoint if you are prepared.
What is KYC and Why Does Amazon Do It?
KYC isn't just an Amazon rule.
It's a legal requirement under European anti-fraud regulations.
Amazon is a payment processor. They are legally required to verify the identity of everyone who sells on their platform.
They are just confirming you are who you say you are before they start sending you money.
It's the same check you'd face opening a bank account.
Submitting Your Documents Correctly
This is the most critical part.
The verification system is looking for a perfect match.
Any difference will cause a rejection.
Follow these rules exactly:
Match Everything 1:1: The name and address you enter must perfectly match your documents. No abbreviations. If your passport says "Strasse," don't write "Str."
Use High-Quality Scans: Use a flatbed scanner or a good scanner app. Create a clear, high-resolution image. No blurriness, no glare.
Show All Four Corners: The entire document must be visible. Do not crop anything.
Check Document Validity: Make sure your ID isn't expired. Make sure your utility bill or bank statement was issued in the last 90 days.
The Video Call Verification: What to Expect
After your documents are reviewed, you will likely need a short video call.
This is the final check.
The call is usually 5-10 minutes. An Amazon employee will ask you to hold your original ID document next to your face. They will compare your face to the photo on the ID.
That’s it.
Just be in a well-lit room and have the original physical document with you.
Troubleshooting Common Verification Delays
Sometimes the process stalls.
If you find yourself waiting, here is how to handle it:
Check Performance Notifications First: This is the ONLY official way the verification team communicates. Check it daily.
Do Not Open Multiple Support Cases: This will not speed things up. It creates confusion and slows the process down.
If You Must Open a Case, Be Professional: If you've been waiting a long time with no updates, open a single case. State your business name, the date you submitted, and politely ask for an update.
Stay Ahead of the Curve
Building your business foundation is the first critical step.
The next is mastering the day-to-day strategies that create real profit
—Andi