British businesses that export goods or services to the Continent are reportedly being encouraged by UK government trade advisers to set up separate companies inside the EU in order to get around extra charges, paperwork and taxes resulting from Brexit.
Maybe time to set up a European subsidiary? Or use us to bill?
Setting up shop in the Continent will come with some challenges but also with considerable advantages. For instance, the corporate tax rates on profits in Germany, France or Belgium is higher than the UK corporate tax rate. It is true that this is an important fact. Equally important though, is the fact that many EU businesses turn down UK-based proposals for several reasons:
- Fear of delays and/ or complications in the delivery of services, where these services are being offered by individuals travelling to/ from the UK.
- Unwillingness to go through the procedures of securing work permits for UK nationals.
- Bitterness towards the UK and the UK businesses. Whilst this is not a rational argument, we must not overlook the fact that emotions play a decisive role in human behaviour and decision-making.
For the above reasons and eventually more, it makes sense to set up an EU subsidiary.
Although the Covid-19 situation will not last forever and is not a consequence of Brexit, it does make things more difficult when it comes to attend meetings or travel for any business reason in general. This is one more reason to make a deciding step towards forming an EU subsidiary.
Meanwhile, you can always count on Access Financial to bill your clients in the Continent, wherever possible. We would be delighted to assist as and when you need us.