Hundreds of European businesses are setting up UK companies in order to mitigate the effects of Brexit, ensuring that they will continue to trade on an equal footing.
Companies with no presence in the UK are looking at setting up operations in the country so that they can mitigate the potential risks of Brexit, in the event that Britain leaves the single market and the customs union.
Alexander Altmann, partner and head of the German desk at Blick Rothenberg, said:
“This is an insurance policy against Brexit. European owned groups already trading internationally often serve customers in the UK with their own staff, but had not necessarily established a permanent entity here due to the simple access provided by the single market and customs union rules. Brexit has led them to reconsider their position and establish more formal structures, and we are seeing more and more companies asking for help in setting up in the UK.”
Altmann warned that the construction industry may be one of the hardest hit industries if Britain leaves the customs union, with labour and material supplies from the EU essential for the construction industry.
“This could potentially lead to increased prices for building materials and staff shortages,” Altmann said.
“The case for German investments in the UK makes sense as Britain is Germany’s largest European export market. German companies, for example, are looking at the UK’s business culture, employment laws and tax rates and see a simple environment in which to operate with a local entity.
“In the long run there could even be added benefit from trade deals the UK may negotiate with the US and other countries, which might have preferential terms compared to what the EU has with these countries. Having an entity in the UK puts them in a position where they could have access to these preferential trade agreements.”
In the same way as European companies are securing their position in the UK, British businesses are also setting up companies in the EU.
Altmann noticed: “At the same time, we are seeing a number of enquiries from established British companies with a large customer base in the EU who are setting up in European countries. Germany seems to be one of the preferred locations due to its central position in Europe and stable political environment.”