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How does Brexit impact your company?

How does Brexit impact your company? image

Brexit is approaching and this has consequences for a large part of the world. Depending on if it’s a no-deal or deal-brexit will turn countless economic, social and bureaucratic issues upside down. The business community at home and abroad will also get a big blow, but entrepreneurs can prepare themselves to a lesser extent with what is to come.

Endless procrastination, dissatisfied Britons and news organizations that are working overtime. The announced departure of Great Britain from the European Union is a huge circus. Brexit will definitely happen on 1 February and Europe must say goodbye to long (trade) political cooperation. From that date, a transitional period in EU legislation will remain in force until the end of 2020.

Deal or no deal

The withdrawal agreement is leading in this case. Parliaments of both parties sit down and try to achieve a decent settlement. If this succeeds, a deal, the impact of a Brexit will not have immediate consequences for (working) the Netherlands. In the event that the British and European Parliament cannot come to an agreement with no withdrawal (no deal), then all agreements expire and the United Kingdom is seen as any other country outside the EU with corresponding rules. And that can have major consequences for Dutch companies.

The United Kingdom is one of the most important trading partners of the Netherlands and vice versa. After all, we are neighboring countries and the relationship between the two countries has been excellent to date. Nevertheless, the competitive position of companies in the Netherlands is affected more than older people, because the Netherlands is much more international in comparison. It is therefore possible to say that the Netherlands is most likely to be hit harder by a hard Brexit and other EU member states.

If you have a business, trade with the UK is essential, a lot will change sooner or later. The four freedoms, free movement of goods, capital, people and services will no longer apply in the case of a Brexit deal. Agreements are made with regard to access from the UK market, but these are agreements that are similar to non-EU countries, such as the United States of China. Complicated trade agreements resulting in economic loss. Do not forget that the trade agreements with for example China of the US have existed for some time and that the Netherlands is familiar with these agreements. Stable trade agreements that once existed and change acutely is a situation of a completely different order. Loss is then inevitable.

Preparations for your company

What is this all mentioned for your company? One of the most important changes will be the transaction costs of the merchandise between the two countries. This can be said with reasonable certainty. This prognosis also applies to VAT rates and import duties. Products can become 10-30% more expensive and this makes trading with Great Britain a lot more expensive and therefore less attractive. What you also have to take into account is the creditworthiness of your customers. Just like you, your customers will be hit hard by the increased rates and levies and will most likely achieve less sales. What can you do to prepare yourself for the impact that the Brexit brings?

  • Monitor the creditworthiness of your most important business relationships
  • Check which permits, authorizations and registrations are required during the trading process and which apply to your company.
  • Determine and calculate the impact of the increased VAT rates and import duties that are very likely to arrive.
  • Verification of diplomas and licenses is still valid if Brexit is an absolute fact (and it will be). Some diplomas of certificates are not valid outside the EU and this can have the necessary consequences for you, your company or your staff.
  • Be aware of the exchange rate
  • Request a European customs issued (EORI number). This number will ensure that you can import and export products to countries that are not members of the EU.

Positive points

The disappearance of the United Kingdom seems to be almost catastrophic for the many entrepreneurs in the Netherlands, but there are also positive points for Brexit. A considerable number of British companies have turned their back on the country and have moved (sometimes out of necessity) to mainland European cities. The Netherlands is one of the favorites.

Rotterdam and Amsterdam in particular as office locations are very popular, as evidenced by the choice of, among others, the London-based European Medicine Agency (EMA), media company Bloomberg and TV producer Discovery. Some international media even dare to go so far as to say that Amsterdam is becoming the new financial heart of Europe. Yet it is Rotterdam that attracted most British companies in mid-2019 in the run-up to the Brexit. Various head offices, distribution centers and marketing and sales offices have made the crossing and are now located in Rotterdam, such as multinational GE Healthcare.

It is no great surprise that the Randstad is preferred. There are good train connections, Schiphol Airport (and even Eindhoven Airport) is easy to reach and offers multiple and direct flights to London every day and a bustling (capital) city is recognizable and generates a certain degree of confidence. This is favorable for Dutch business. It gives the cities an even more international character and it creates more jobs for the Dutch, because not all employees from the United Kingdom will move with them.

Like the many British companies, are you considering switching to a new office in any city? Are you tired of your office space, do you want to sit taller or rather a little smaller? WehaveAnyspace is happy to help you find the office in which you feel comfortable. Click here for the most beautiful offices in Rotterdam. Prefer a space in Amsterdam? View our selection here.