Many companies are setting up additional companies in the EU or moving their headquarters to an EU country in a bid to minimise the negative fall-out they expect Brexit to have on their businesses. Anna Tobin looks at who is going where
The number of companies leaving the UK because of Brexit is growing and with no deal now a distinct possibility, more are expected to follow.
Last week, Japanese electronics’ manufacturer Panasonic announced that it’s moving its European HQ from the UK to The Netherlands. This move is reportedly designed to limit tax issues linked to Brexit. Panasonic Europe’s chief executive Laurent Abadie told the Nikkei Asian Review that if the UK lowers corporation tax after Brexit in a bid to attract business, the UK could be viewed as a tax haven. While tax havens are designed to be attractive to business, companies operating within one risk being hit with much larger tax bills in their home country; this fear, as well as freedom of movement of staff and goods, is what is thought to be largely responsible for Panasonic Europe’s move to Amsterdam.
Japanese retailer Muji is also rumoured to be moving its European HQ from the UK to Germany, and Japanese banks Nomura and Daiwa are already setting up EU operations in Germany.
At the start of the summer, the EY (formerly known as Ernst & Young) Financial Services Brexit Tracker revealed that, as of June 2018, 34%, or 75 out of 222 of the companies they monitored, had “publicly confirmed, or stated their intentions, to move some of their operations and/or staff from the UK to Europe. This is a 2% point rise since March, building on the 1% point rise the previous quarter (December 2017).”
Insurance and reinsurance market Lloyds of London announced in May that it had received regulatory approval from the National Bank of Belgium to establish an insurance company in Brussels. The company said in a statement: “This milestone moves us closer to our objective of being fully operational in Brussels by 1 January 2019 to ensure we can continue to work closely with our EU27 partners post-Brexit.”
It’s not just large multinationals that are relocating or branching out into the EU either as a result of Brexit. SMEs, particularly those that trade within the EU, are making plans to create European outposts and warehouses to minimise Brexit red tape and stock delays at borders. Online giftware retailer Rex London is setting up a Dutch base and The Grown Up Chocolate Company is considering relocating its business to Slovakia, for example.