SIN-TRADE LTD

Contact us:

Phone:

+48 784 987 998

E-mail:

office@sin-trade.pl

Introduction

The BREXIT is finalized. However the negotiations are still going and either of the parties wants to back up. This is nothing new as everyone wants to get the most from the deal. Another thing is that European Union does not want to show that you can leave the club but you can have all the benefits.

As I mentioned in previous post, the UK businesses are confused on the possible outcome of the negotiations. It can be said that reality looks a little bit different that the promises that were made.

There are of course signals that some countries would like to enter into Free Trade Agreement with UK (at them moment we have got agreements to keep ongoing Trade Agreements). However the process of negotiations is long (can take few years). The risk that I see in this at the moment is that British Government could rush into such an agreement. This could lead to lower protection of UK businesses and goods. The reason for such rush would be keeping the promise to businesses and people that trade and economy would not be affected by leaving EU.

However if UK politicians would go slowly and negotiate the deals in proper manner (few years), the problem of UK businesses would be the present time, till the new agreements. Since EU is the signatory of all international deals UK will have none. This means that sells of UK goods could be subject to import taxes and custom duties. That would mean that those goods would be more expensive that the competition, which could reduce demand for them.

I believe that best solution for this is to move part of the business into EU country. This would grand the products 'EU Made' badge and the business will be benefiting from the EU international trade agreements.

'Can I move my business?'

This is one of the questions that most businesses ask. The answer is yes, you can move your business no matter how big it is. This can be done by micro, small, medium and big enterprises. There is no restriction on that. Although it the complicity will depend on the area of business and size of the businesses.

Personally I am an enemy of moving whole business. I think that HQ should be in home country, with also part of the production. The most sensible thing is to move part of the production that would be responsible for EU and International trade production or providing services.

When the company is thinking about opening a branch (manufacturing, R+D, SSC etc.) it has to consider costs of doing business, workforce and taxes. Every step has to be calculated and researched. In previous posts I presented countries that opening a branch would be most sufficient idea.

The interesting part is that opening a small production facility is also possible and getting incentives is also visible.

Another thing is that costs of employment are lower and transportation costs within EU would also go down. Those factors will lead to possible lowering the price, hence making it more competitive towards its substitutes.

Opening a production/service facility in the EU country will also grant access to Union market on EU rules (free movement of goods and services). This would make sales more easily and less costly. This is also a good reason why businesses from outside EU should open manufacturing facilities is EU – to make sales easier.

By doing this the company can increase its profits by selling more products.

Conclusion

Business of any size can expand internationally (opening a manufacturing site), this is not only the domain of huge corporations. Sometime the smaller companies can do it faster and cheaper with the same benefits as the big ones.

The reason why UK entrepreneurs should think about such move is to protect their sales on EU market. As if the product will be assembled in any of EU countries it will be treated ans 'EU Made'.

By doing this move British entrepreneurs can protect themselves from BREXIT outcomes until British government would negotiate new deals. It is worth to remember that first two years will be hardest for UK companies.

Stworzono w kreatorze www WebWave CMS