Car dealership rules in EU for non-EU companies

|Attorney|Czech Bar Association Reg. No. 14551

Published:3/27/2026Updated:6/30/2026

If you are a non-EU car dealership company considering entry into the European market, you face a complex web of regulations, licensing requirements, and compliance obligations that vary significantly across member states. This article will provide you with specific answers about authorization requirements, VAT implications, competition law restrictions, and the practical steps needed to establish and operate a legal car distribution business in the EU.

Key takeaways

No Single License: There is no "EU Dealership License." You need local establishment and trade registration in each country.

Regulatory Minefield: You are subject to strict Competition Law, Consumer Law, and Data Law.

Dealer Protections: In markets like Germany, Austria, and Italy, dealers have strong statutory protections against termination.

Tax Risks: VAT rules for used vs. new cars and imports are complex. One mistake in the "Margin Scheme" application can destroy profit margins retroactively.

2026 Reality: You must navigate the 2025 CO2 reduction targets, prepare for Euro 7, and handle the EU Data Act rights for connected cars.

ARROWS law firm

245 007 740 consultation@arws.cz

Conclusion

Establishing car dealership operations in the European Union as a non-EU company requires navigating a genuinely complex legal landscape. From authorization requirements varying by member state to VAT obligations, competition law constraints, and the new realities of the Data Act and Green Deal, success depends on detailed understanding.

The solicitors at ARROWS Law Firm have extensive experience assisting non-EU automotive companies with European market entry. Our Prague-based international team combines deep knowledge of EU regulations with practical understanding of individual member state requirements.

We understand that attempting to manage these obligations independently creates exposure to expensive errors. Let the ARROWS Law Firm team handle the specialized legal work, ensuring your dealership operations receive protection from experienced specialists.

FAQ – Frequently asked legal questions

1. Can I establish a single dealership that serves multiple EU member states?

You can sell cross-border via "distance sales" (online), but this triggers VAT registration in the destination country once you cross the OSS threshold. However, if you want a physical showroom or test-drive facility, you generally need a local establishment in that country.

2. What capital requirements exist?

EU law has no fixed minimum. Czech s.r.o. requires very little capital, while a German GmbH requires €25,000. Practical requirements from banks and manufacturers for working capital are much higher.

3. Can I sell imported used vehicles?

Yes, but they must pass Individual Vehicle Approval (IVA) if they lack an EU CoC. You must pay Import VAT and Duty, and you generally cannot use the Margin Scheme on the first sale.

4. What about greenwashing?

Under the 2026 rules (Empowering Consumers for the Green Transition), you cannot claim a car is "CO2 Neutral" based solely on carbon offsetting. Claims must be specific, verifiable, and cover the lifecycle.

5. How long is the mandatory warranty?

Legally 2 years for new cars. For used cars, it can often be reduced to 1 year by agreement, but the burden of proof is on you for the first 12 months in many jurisdictions.

6. Do I need to share car data?

Yes, under the EU Data Act (applicable from late 2025/2026), you must provide the user (driver) with access to data generated by the vehicle and share it with third parties upon their request.

ARROWS law firm

245 007 740 consultation@arws.cz

About the author

JUDr. Jakub Dohnal, Ph.D., LL.M.

Associate, managing partner

LinkedIn|Czech Bar Association Reg. No. 14551

Jakub Dohnal is a founding member of our law firm and our entire consulting group. He is primarily involved in real estate development and advising on the complex setup of commercial projects.

dohnal@arws.cz 245 007 742

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Disclaimer:

The information contained in this article is for general informational purposes only and serves as a basic guide to the issue as of 2026. Although we strive for maximum accuracy, laws and their interpretation evolve over time. We are ARROWS Law Firm, a member of the Czech Bar Association (our supervisory authority), and for the maximum security of our clients, we are insured for professional liability with a limit of CZK 400,000,000. To verify the current wording of the regulations and their application to your specific situation, it is necessary to contact ARROWS Law Firm directly (consultation@arws.cz). We are not liable for any damages arising from the independent use of the information in this article without prior individual legal consultation.