EU Trade after Brexit
Leaving the EU will make exporting substantially more expensive, time consuming and difficult. However, the good news is you can effectively and legally remain in the EU – even after Brexit. And no worries, these solutions are probably easier, faster to implement and more affordable than you might think.
What changes post-Brexit?
If you export goods to any of the 27 EU countries or their 80 partner trading nations the following will change:
Status: The UK will become a Third Country. Even if the UK and EU manage to agree on a trade deal by the end of 2020 we can expect a minimal agreement with many trade barriers. In case of a no-deal we will have to trade with the EU on World Trade Organisation (WTO) terms. These are the most basic terms of trade as we have them, for instance, with many Asian or African countries.
Tariffs & Customs Duties: In case of a no-deal tariffs will have to be paid on (almost) all products and duties have to be paid on selected products such as alcohol or tobacco. In case of a deal we can expect tariffs to be lifted and/or lowered on a number of goods - to what extend we will have to see.
Import VAT: Businesses need to pay import VAT in the country to which they export. This can be claimed back – from the foreign tax authorities and most likely in a foreign language.
Customs declarations: Extensive forms will have to be filled in for every export, no matter how big or small. For some goods comprehensive documentation has to be provided additionally (e.g. certificates of the origin of your goods and their component parts/ingredients).
Delivery times: Another aspect to consider are backlogs at the customs. This will cause substantial problems for freight traffic that depends on fast deliveries, e.g. fresh produce or just-in-time goods.
Administration: The amount of paperwork involved to get goods to the EU or its partner trading nations is most likely to increase massively. For instance, for the documentation of goods manufacturing and safety processes.
The solution: Bypassing trade barriers
The strategy of bypassing trade barriers to protected markets is not new. The problem: It was only affordable for multinational corporations. BUT this has changed; today even micro businesses with their limited resources can easily afford services to establish and run their own company in Europe from the UK. This means with only little disruption to your everyday business you can continue trading with the EU from your UK headquarters.
Export via your EU company
So, where do you start? Simply look for service providers who can establish and host a legal entity (i.e. a EU limited company) for you. Choose a place of business in a country where English is widely spoken and offers a high degree of economic stability and legal security. Good examples would the Netherlands and Germany, as they offer many advantages, particularly for UK businesses. Both countries have an excellent infrastructure and it is comparatively economical and easy to get there.
Take care to pick the right partners
When looking for your service partners make sure they can provide as much as possible out of one hand. In addition to providing EU company formation and business premises (e.g. a virtual office) they should also have a network of local associates such as lawyers, accountants, service or sales people, etc. If you trade goods it would be a great advantage if your partners also offer logistics and e-commerce fulfilment for goods distribution. Ascertain that all written and spoken day-to-day communication is handled in English and that you can always get advice on your foreign operation when you need it.
For more information on trading from and to Europe please get in touch.
Trade with Europe Ltd provides one-stop solutions for UK businesses to export and grow European markets. Circumvent trade barriers and manage your EU trade from the UK with only minimal disruption to your everyday business.