Brexit: Time for European businesses who export to the UK to start a UK subsidiary?

24th April 2017

Last year the UK imported £350 billion of goods and services from businesses in fellow EU member states. Although a lot of talk in the run-up to Brexit is currently about what UK business should do to protect their interests post-Brexit, these European businesses should, similarly, be hedging their exposure to the expected changes. Germany, Norway and Netherlands, in particular, sell the highest volumes into UK.

If Brexit imposes future physical, time and monetary barriers to the free trade of goods and services between the UK and EU, then the easiest way to avoid these is to start a subsidiary in the UK and produce the goods or services within this UK subsidiary. Future sales will then be unencumbered UK-2-UK. Industries in which the UK already has a competitive advantage, such as technology, financial services, pharmaceuticals and the arts, will be particularly suited to having a UK production location.

As the UK currently ranks as one of the most preferred locations globally to base a business, due to its political stability, low taxes and business friendly regulation, overseas groups should not fear such a re-structure.

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