EUid for small and medium-sized enterprises: A practical guide

Europe-wide business offers new opportunities, especially for small and medium-sized enterprises (SMEs). However, cross-border company registration, compliance and administrative work often pose a challenge. The European Identification Number, or EUid (European Unique Identifier), offers a simple solution. The European Union's eIDAS reform, a digital project, aims to establish a digital wallet for all EU member states by 2026. In this article, we explain how SMEs can benefit from EUid and how to use it wisely. Here comes EUid - a practical guide for SMEs.

When will the EUid Wallet arrive?

The European Union adopted the regulation on the introduction of the European Digital Identity (EUid) on May 20, 2024. This regulation obliges all member states to provide their citizens with at least one digital wallet that meets the common specifications by 2026 at the latest. Source: European Commission

The EU's planned eIDAS 2.0 standard is intended to create a digital identity wallet that enables secure digital proof of identity and increases the acceptance of identification processes in all EU member states.

From 2026, both public and private service providers within the EU will be obliged to accept the EUid wallet for authentication purposes. This means that from this date, the EUid will be the standard for digital identification and authentication throughout the European Union.

Background: What is the EUID and what is the EUid and why is it important?

The terms "EUID" and "EUid" can be used in different contexts:

1. EUID (European Unique Identifier)This is a unique identifier for companies within the European Union. It enables companies to be clearly identified across national borders, which is particularly important for cross-border business and legal matters.
2. EUid (European digital identity)This is an initiative of the European Commission to introduce a Europe-wide recognized digital identity. This is intended to enable citizens and companies to prove their identity digitally and access various online services throughout the EU.

Importance of the European Digital Identity (EUid):

• Simplified access to servicesWith the EUid, users can access public and private services across the EU without having to use separate local identification methods.
• Data sovereigntyEUid gives users control over their personal data. They can decide what information they want to share and with whom.
• SecurityEUid ensures a high level of security and trust in digital transactions, reducing the risk of fraud and identity theft.
• Economic efficiencyCompanies can use the standardized digital identity to optimize their processes and make cross-border business more efficient.

Overall, the EUid is helping to strengthen the EU's digital single market and drive forward digitalization in Europe.

Definition and meaning of digital identity

Digital identity is a central concept in modern society that refers to the digital representation of a person, organization or entity. It encompasses all the information that a person or organization leaves behind in the digital space, such as personal data, online activities, transactions and interactions. Digital identity is of great importance, as it makes it possible to identify, authenticate and verify oneself in the digital space.

Digital identity is essential for companies and citizens to operate securely and efficiently in the digital space. It provides a basis for trust and security in online transactions and interactions. By using a digital identity, companies can optimize their processes and expand their reach, while citizens benefit from simplified access to digital services.

Why is the EUid particularly relevant for SMEs?

For SMEs, which often do not have the resources for extensive compliance checks, the EUID facilitates access to European markets. However, there are various challenges in implementing EUID, particularly in terms of technical, legal and social aspects that need to be overcome. It offers:

• Security for cross-border business relationships.
• Simple communication with European business partners and authorities.
• Lower administrative costs through standardized identification data.

Areas of application of the EUid for SMEs: When and where is it used?

1. Trade and exportAn SME exporting products to other European countries can be quickly and clearly identified by authorities and business partners with the EUid, simplifying import and export processes. Digital wallets, promoted by the European Commission, allow users to securely identify themselves and store and manage important documents via their cell phones.
2. Online tradingEUid enables online retailers to make their presence on European platforms secure and transparent, which strengthens the trust of international customers.
3. Ensuring complianceEUid offers a quick solution for tenders or contracts that require proof of company identity. The EUid simplifies validation in other countries without having to rely on country-specific commercial registers.
4. Partnerships with other SMEsCooperation between SMEs in the EU is more secure and transparent thanks to the EUid. One example is joint participation in EU projects, where there are often clear identification requirements.
5. Banks and financingWhen applying for loans or subsidies abroad, the EUid makes credit checks easier, as all the necessary identification information is immediately available.

What advantages does the EUid offer SMEs?

The EUid brings many practical advantages for SMEs, which often work with scarce resources:

• Efficiency and time savingsSMEs can present their identification data at EU level without additional bureaucratic processes. This saves time and resources.
• Confidence buildingAn SME that uses an EUid signals transparency and seriousness to potential partners. The EUid is an official means of identification that creates trust.
• Cost savingsStandardization eliminates fees for multiple registrations in different countries.
• Faster partner and customer acquisitionWith a central identification number, it is easier for SMEs to attract new customers and business partners, as potential partners can be sure that the company data is correct.
• Simplified collaboration on projectsIn joint EU projects, the EUid simplifies the allocation and verification of company data, which reduces administrative burdens.

Examples: How SMEs use the EUid in practice

1. Export-oriented manufacturersA German mechanical engineering company uses the EUid to build trust with a business partner in France. However, various challenges must be overcome in the practical application of the EUid, such as technical, legal and social aspects. Both companies can check each other via the EUid without having to access complicated translations or national registers.
2. IT and service companyAn SME that offers software solutions uses the EUid to prove its identity in public tenders within the EU. The EUid speeds up processing and the company does not have to provide proof of registration in several countries.
3. International consulting firmsAn SME that offers consulting services in the EU uses the EUid to increase its trustworthiness. This allows customers in other countries to easily verify the identity of the company, which is an important basis for consultancy business.

Functionality and security features of the digital identity wallet

The digital identity wallet, also known as the EUid wallet, is an innovative solution that allows you to manage your digital identity securely and efficiently. It works like a digital wallet in which all important documents and information can be stored. The wallet uses advanced security features such as encryption, biometrics and two-factor authentication to protect the data.

The EUid wallet offers a variety of functions, such as:

• Secure storage of personal data and documents
• Authentication and verification of identities
• Digital signature and encryption of documents
• Monitoring of transactions and activities

These security features ensure that users' data is always protected and that only authorized access is possible. The EUid wallet is an important step towards a secure and efficient digital identity that makes it possible to identify and authenticate oneself in the digital space. For companies, this means a considerable simplification in the management of identification data and increased security for digital transactions.

Step-by-step guide to using the EUid for SMEs

1. Registration in the national business registerThe EUID (note: not EUid) is automatically assigned when a company is founded or registered. The European digital identity plays a central role here, as it provides EU citizens with secure electronic identification and access to other functions.
2. Use in business communicationSMEs can use the EUID in business documents, invoices and contracts to ensure their identity even across national borders.
3. EUID for public tendersFor tenders within the EU, the EUid can be used as proof of company registration.
4. Use for online platformsOn platforms that operate across national borders (e.g. Amazon or eBay), the EUID can strengthen the trust of customers and partners.

How companies obtain their EUID and EUid number

The European Business Identification Number (EUID) is assigned automatically upon registration in the commercial register. Companies that are already registered have also been assigned an EUID, even if they have not yet used it. If the number is not known, it can be requested directly from the relevant commercial register or registration court. A separate application is not necessary.

Please do not confuse this with the EUid Wallet:

How does your company obtain the EUid:

1. Development of the EUid wallet: The EUid is provided as a digital wallet that enables companies to securely store and share their identity and relevant documents. Each EU Member State is obliged to provide such a wallet by 2026 at the latest.
2. Pilot projects and implementation: Since April 1, 2023, pilot projects have been carried out in several EU countries to test the functionality and security of EUid wallets. These projects are intended to ensure that the wallets meet the requirements of companies and can be used across borders.
3. Integration into company processes: As soon as the EUid wallets are available, companies can use them to prove their identity digitally, sign contracts electronically and communicate securely with authorities and business partners. This facilitates cross-border business processes within the EU in particular.

Current steps for companies:

• Obtaining information: Stay informed about EUid developments in your country. National authorities and trade associations will provide relevant information.
• Participation in pilot projects: If possible, take part in pilot projects to gain early experience with the EUid and provide feedback.
• Preparation of the IT infrastructure: Make sure that your IT systems are compatible with the requirements of the EUid wallet to ensure smooth integration.

Note: The introduction of the EUid is still in the implementation phase. It is therefore important to regularly follow official announcements and updates from national and European institutions in order to optimally prepare your company for the use of the EUid.

Implementing the European Digital Identity (EUid) in your IT infrastructure requires careful planning and implementation.

Here are the steps you should consider:

1. Understanding the EUid directivesFamiliarize yourself with the requirements and specifications of the EUid. The European Commission provides comprehensive information on this.
2. Analysis of the existing IT infrastructureCheck the extent to which your current IT landscape supports the integration of the EUid. Identify areas that need to be adapted or expanded.
3. Integration of the EUid walletThe EUid wallet is a digital wallet that enables citizens to prove their identity digitally. Make sure that your systems support the use of this wallet and provide appropriate interfaces.
4. Provision of interfaces by the EUThe European Union provides the central interface for the integration of the EUid. Authorities and large platforms are obliged to accept this standardized interface for digital proof of identity. This allows you to seamlessly integrate the EUid into your systems.
5. Implement security measuresAs the EUid processes sensitive personal data, it is essential to implement robust security protocols. This includes both technical and organizational measures to protect the data.
6. Employee trainingEnsure that your employees are trained in using the EUid and understand the new processes.
7. Test phase and feedbackCarry out a test phase in which the integration of the EUid into your systems is checked. Collect feedback and make adjustments if necessary.
8. Continuous updatingAs technical standards and legal requirements can change, you should regularly review and update your systems to ensure compliance with the EUid.

By carefully implementing these steps, you can successfully integrate the EUid into your IT infrastructure and benefit from the advantages of a digital identity that is recognized throughout Europe.

Conclusion

The EUid offers a clear opportunity for SMEs to position themselves securely and efficiently in the European market. From simplifying compliance to building trust and saving costs, the EUid is a valuable tool to help SMEs grow and expand across borders. Future developments such as the EU's planned eIDAS 2.0 standard, which aims to create a digital identity wallet for citizens, will further increase the acceptance and security of identification processes. Whether in trade, in the financial sector or in cooperation with other companies, the EUid makes day-to-day business easier and offers a competitive advantage.

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