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The political scene is always changing. The biggest change in the last few years was Brexit. The U.K.’s withdrawal from the European Union officially ended on 31. January 2020. This historical event doesn’t just affect people in the UK. Brexit also affects foreign investors who want to expand their businesses. Expanding a business internationally is a huge and risky feat. It can be a huge success or a failure. For this reason, before you decide to expand your business to the UK, you need to do very thoughtful research about the country. Also, after you finally decide to expand your business, you have a relocation to prepare with transparent international movers. You will have to travel many times to the UK before you open your business there. Therefore, here is what you need to know about expanding your USA-based business to UK after Brexit.
What should you know about expanding your USA-based business to UK after Brexit?
The UK always had one of the strongest economies in the world and today is no exception. It might not hold first place, but it still going strong with the fifth-largest economy in the world and the second-largest in Europe. Therefore, the UK is a popular place to expand your business. While you can expand any business to the UK, the biggest chance for success has tech startups. Other business owners said the same things about why the UK is a great country for business such as funding, taxes, government support, and relatively easy business management. These are very good reasons to expand your business and relocate your office to the UK with international removals. While the situation for USA-based businesses is good after Brexit, you should still pay attention to the following:
- Supply chains
- Importing costs
What Brexit means to a USA-based business?
Brexit brought both new opportunities and challenges to the USA businesses. Most benefits are connected with the fact that the UK doesn’t have free access to the EU market. A good example is banks. UK banks now must have an office in every EU country to work after Brexit while they used to have free access before without a physical presence. However, US financial businesses already had offices or physical presence in EU countries. Therefore, US businesses can take the opportunity of earning new clients that used to work with UK businesses. For this reason, you can also take this opportunity to expand your business to the UK first and after a while to the EU as well. Additionally, you will have to open an office there. You can move some of your office items with international movers USA to UK or get a new one in the UK.
What is the biggest change?
Well, the biggest change that Brexit brought is modifications of supply chains. Before Brexit, UK and EU were seen and considered as the same market. This means that US companies used the UK as a gateway for the EU market. Nowadays, UK and EU are separate markets with different rules for trading. Therefore, US companies now must deal with customs delays and a few additional costs like fees and taxes. Also, USA companies must now establish physical offices in EU countries in which they distribute their goods. However, this change doesn’t affect all US companies. The terms are the same for US companies that only export their goods to the UK. For this reason, if you are planning only to work inside UK borders, you won’t have to worry about new rules. Instead, you should focus on moving furniture overseas for your new office space.
How is the situation with exporting goods after Brexit?
If you want to expand your business to the UK and export your goods to the EU, you might face an unpleasant surprise. You now have to face new import and export regulations that are different for UK and EU. As a USA-based company, you will have to follow both regulations. This means you will have to pay additional fees and taxes for exporting your goods to the EU market. Luckily, there is a way to avoid these expensive fees. UK has established eight freeports which gives you an opportunity to export to the EU for cheaper costs. However, changes still happen and you must monitor what is happening in the business world. Nothing is for sure right now, but expanding your business to the UK can bring you a lot of new opportunities and profits.
What is happening with the employment situation?
Before Brexit, people from other EU countries could work in the UK without a visa. However, now the situation with visas has changed. This affects both people who worked in the UK before and after Brexit. If your employees don’t have UK passports but worked in the UK before 31. January 2021., they will need to have settled or pre-settled status. The settled status means that your employee lived in the UK for more than five years which gives your employee a right to work and live in the UK. However, if they lived in the UK for less than five years, they must apply for pre-settled status and gain settled status after 5 years. However, it will be very hard to hire people outside of the UK after Brexit as they must meet certain requirements. This will lead to limited employment options and a bigger cost to hire people.
Brexit means changes in the U.K.- U.S. relationship
Trade between UK and USA brings a lot of money for both countries. Many people believe that Brexit will bring an easier expansion of US businesses to the UK and better conditions. For this reason, you can also think about expanding your USA-based business to UK after Brexit. The UK government is working hard right now to make new agreements with the USA. With everything that is going around the world right now, nothing is still completely sure. But, Brexit also brought many advantages to US companies such as lower costs of importing. Therefore, you should first see if it’s worth expanding your business to the UK and what the regulations are right now.