Why should British entrepreneurs set up a company in the EU after Brexit?
A historical decision in the EU was taken on 23rd of June 2016. More than a half of the British voters express their wish during a referendum held on that day to leave the European Union. The desire of Britain to gain more independence in controlling its immigration flows and regain control over its economy was the main reason for Brexit.
Significant impact on the economical and political life of the country would certainly occur after the event. In this article, we observe the reason why from small to large-scale British entrepreneurs should consider moving in the EU after Brexit.
Access to the EU market
Lose access to the EU single market which currently comprises more than 500 million customers is one of the major concerns about Brexit and the impact on UK’s economy. According to the Lisbon treaty, after the Brexit process starts UK will have 2 years to negotiate and secure a new trade deal with the EU. One of the topics in the future negotiations will include trade and customs restrictions, passport control procedures etc. Since the outcome of the negotiations could not be predicted, businesses and entrepreneurs who would like to have unrestricted access to the single EU market should think of setting up a company in EU.
Integrated corporate legislation
With EU law in place which provides adequate and clear protection of shareholders and employees as well as reduced bureaucratic burden on businesses. After Brexit, UK companies may lose not only preceding benefits, but also find themselves in an administrative uncertainty.
London is famous as one of the world’s largest financial hubs comprised a number of companies committed in banking, insurance and other financial operations. Bear in mind that UK will withdraw from the EU, financial institutions having licenses in Britain may no longer be permitted to operate in the EU. Considering setting up business entities in the EU will benefit British entrepreneurs who are engaged in targeting EU markets and financial activities.
Freedom to choose a low tax jurisdiction
Setting up a company includes a number of factors, such as location, availability of skilled workers, public infrastructure, monetary and fiscal policies and property regulations. One of the essential points is the corporate taxation to businesses. Within the European Union, a number of countries offer low tax rates, attractive environment for start-ups, strategic locations and free economic zones. Example of the above mentioned you could find in Bulgaria where not only the tax rate is low (10%) but qualified and inexpensive workforce is available, low real estate prices and perfect location for trading within EU and even outside. These are few of many advantages that an entrepreneur could find within the European Union.
We could not predict the long-term consequences of Brexit but we see that UK based businesses are willing to avoid unpleasant surprises and move some or all of their operations to the EU. Our specialist will be glad to provide you with advice on where and how to set up a company in the EU.