There is no doubt that the result of the June 2016 referendum will have a significant impact on the UK’s trade and relationships with the European Union and the rest of the world. However, the attitude of most companies and indeed the government is very much ‘business as usual’.
The key strengths that make the UK an attractive base for overseas expansion remain largely unchanged. The UK's economy is continuing to grow and numerous countries outside of the EU have come out and shown enthusiasm for free trade with the UK. Whilst there is continuing uncertainty surrounding what the future relationship will be with the EU, negotiations are still ongoing, and the UK is not due to leave the EU until 29th March 2019.
Currently, EU laws continue to apply to the UK and there is legislation being passed which will transfer EU law into UK law. What this means is that there will not be a drastic regulatory change when the UK leaves the EU, so there will be minimal disruption to the regulatory landscape in the UK. The UK will continue to be a very close partner to the EU.
The same point applies to Visa and immigration rules, which again remain unchanged at present, and so the “wait and see” approach still applies. EU citizens still have the automatic right to live and work in the UK and the schemes in place for entrepreneur and investor visas remain. However, despite Brexit it seems likely that the UK government will continue to adopt a comparatively liberal policy towards immigration so as not to deter businesses from investing in the UK.
Benefits of Doing Business in the UK
Low Tax Environment
The UK has one of the most competitive tax environments in the world, being the lowest in the G7 with a corporation tax rate of 19%. This will fall to 17% for the financial year beginning 1 April 2020. This is much lower than the European average of 24%.
Major Trading Nation
The UK is well recognised as a major trading nation and is consistently ranked as the world’s fifth largest economy. With a population of just over 65 million people, it is also a large lucrative market in its own right. This also gives the UK the second largest labour force in the EU.
The UK has one of the most stable political environments to do business in. The World Bank Group ranks the UK 7th (ahead of France, Ireland and Germany) in terms of ease of doing business with criteria such as: starting a business, paying taxes; trading across borders and getting credit.
Generous Tax Schemes
The UK Government offers generous tax incentives such as R&D and creative tax credits and entrepreneurs’ relief.
Efficient Set Up
Setting up a company in the UK is easy, taking an average of 5 days compared to the European average of 10 days, according to the World Bank.
The UK offers a world-class transport network and straddles the Asian-American time zone. This means that the UK’s office hours cover 99% of the world’s GDP. A UK base will be the vehicle for collaboration with Europe, whilst enabling you to take advantage of the generous tax scheme.
Regardless of the changes that Brexit might bring, these issues are complex and professional advice should be sought as soon as possible. Ecovis work with a number of partners who can assist you at the planning stage.