Whether you already have a UK business or whether you were thinking of starting up in Britain, you may be feeling a bit wobbly after last week’s Brexit results. But don’t panic. All is not lost. While Britain starts slowly packing its bags and waving a forlorn farewell to the EU, there may be some opportunities in other countries for entrepreneurs who prefer to stay in the EU.
Republic of Ireland
Ireland may be a small country but the so-called Celtic Tiger economy is fuelled by foreign investment, low corporate tax and a liberal approach to trade. As well as being English-speaking and with its close proximity to the UK, the Republic of Ireland has the advantage of still being in the EU and using Euros as its currency.
Ireland is also perfectly positioned as a trade bridge between Europe and the United States and has a particularly beneficial tax environment on all trading income. Ireland’s government has streamlined its regulatory infrastructure into a single body - the Irish Financial Services Regulatory Authority. The overall regime is relatively relaxed and there are no general restrictions to foreign ownership. The good news is that capital and dividends can be freely repatriated and as Ireland has bilateral tax treaties with many countries, foreign investors find Ireland the perfect place to set up a business.
The Irish authorities, in coordination with the EU, also offer a broad range of incentives for international investors, including capital grants towards the cost of land, buildings, plant and equipment, employment and training grants to promote job creation and research and development grants.
Although many entrepreneurs have been put off by France in the past due to its bureaucratic reputation, the recent leaps and bounds the country has made in helping startups has made “la belle France” even more attractive to entrepreneurs looking for a business home.
The company formation system has been streamlined and it’s now possible to set up a company within a matter of a few weeks. Its ties with other EU countries are strong and being surrounded by Spain, Germany, Switzerland, Belgium, Italy and Luxembourg makes it an incredibly easy trading location for the rest of Europe. There is also the advantage of the French 15% reduced tax rate and easy VAT registration (much easier than Ireland).
France is also one of the world leaders in assisting tech startups and encouraging innovative and fresh business opportunities. There are startup communities springing up all over the country, especially in Paris where huge hubs dedicated to helping entrepreneurs get their ideas off the ground are attracting investors from all over the globe.
Staying Put in the UK
So what about those who need to keep their business in the UK or for those that still need to set up a company in the UK? First of all, the British government has not triggered ‘Article 50’ – the EU get-out system - so no official Brexit process has started. When it does start, it will take at least 2 years of negotiations and implementation during which time the UK will remain part of the EU. So there’s nothing to worry about in the short to middle-term.
Also, Chancellor George Osborne has pledged to cut corporation tax to encourage businesses to continue investing in the UK following the referendum vote. He said he would reduce the rate to below 15% - more than 5% lower than its current 20% rate which would give the UK the lowest corporation tax of any major economy.
So for those that were thinking of opening a company in the UK, that’s still a very viable option. The UK will need to attract more businesses to sustain its growth and claw back some of that lost business that occurred when the shock announcement took hold. So there could be some good incentives in the pipeline for foreign investment. Of course the economy is going to take a hit from the Brexit decision (George Osbourne has already stated austerity measures will need to be taken) and sterling has taken a sharp dive, but the UK is still an economic super power. The new leaders will just need to work very hard on negotiating the UK’s new trade agreement with the rest of the world to keep that super power cape in place.
But as one of our foreign clients, who already owns a company in the UK, said: “With the UK leaving the EU I want to make sure my business operations in the EU are not interrupted. I see this as an opportunity to begin expanding and increasing my business in the EU.”
In the face of adversity, there are always opportunities for those savvy entrepreneurs who work the system to their advantage.
For more information on how to open a company in Ireland, France or 30 other countries worldwide, and for help with registered addresses, VAT services and tax advice, call us on 0033 (0) 1 53 57 49 10 (France) or 0044 (0) 203 445 0916 (UK) or email us and we’ll be happy to help find the right solution for you and your business.
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