The United Kingdom is no longer part of the European Union, now that the Brexit process is largely behind us. The two economies are now officially separate, despite close geographical proximity and continued trade ties.
It’s that proximity and historical ties that continue to make the EU a natural first target for UK firms ready to expand internationally. Many enter the Irish market, but that’s not the only option: national markets like France, Germany and Italy offer considerable opportunities for British enterprises.
Experts have taken notice.
“We believe Europe to be the most attractive market for UK firms,” says Shmuel Chafets, cofounder of European venture capital firm Target Global.
If your company is preparing to do business in Ireland or on the Continent, here’s what you need to know about entering the European market after Brexit.
It’s a Massive Market, So Don’t Expand Too Fast
With an economy of nearly 16 trillion euros, the scale of opportunity in Europe is absolutely massive. It’s tempting to try to take it on all at once.
That could prove to be a mistake. Especially on your first foray into Europe, it’s important to take things slow, make mistakes at a small scale and work to improve as you scale. This will take more time but will ultimately be the right move for your business.
Brexit Changed the Rules of the Road for UK-EU Trade
It should come as no surprise that Brexit changed how UK companies do business in Europe. Brexit also changed the rules for UK businesses selling into the EU market.
Your first step as an exporter is to determine whether import-export rules apply to your business. If it’s based in England, Scotland, Wales or Northern Ireland and it moves goods permanently into the EU or the reverse, there is a good chance they do.
Business Travel Between the UK and EU Is No Longer Frictionless
The rule of thumb is to always bring your passport.
“If you are a national from a country outside the EU wishing to visit or travel within the EU, you will need a valid passport and possibly a visa,” official EU travel rules say.
UK nationals generally do not need visas to travel within the EU, but it’s a good idea to check with your destination country (and possibly the UK embassy there as well).
National VAT Rules Can Be Complicated
If you produce and sell products within certain EU countries, you may need to pay value-added taxes on them. This is a complicated matter that may require the advice of a local business consultant, as VAT is a critical source of revenue for host countries. On the bright side, business travelers may qualify for VAT refunds upon leaving destination countries.
Labor Laws (And Public Holidays) Vary From Country to Country As Well
If you wish to do business in other countries, you must abide by local labor laws and customs. First and foremost is minding hours worked and paid time off requirements; it is also important to observe local holidays (including those not observed in other parts of the world) and adjust your work schedules accordingly.
An Irresistible Opportunity
With a population of about 450 million and growing, the European Union is significantly larger than the United States and Canada combined and more than one-third the size of China. Its inhabitants have far more purchasing power on average, as well.
These facts alone make the EU an appealing opportunity for British firms, but there’s much more to the story. Indeed, we’ve only scratched the surface of why it makes sense for your first overseas venture to involve the EU. If you’re not convinced, you need only talk to some of the successful entrepreneurs who’ve done the same in the difficult but rewarding post-Brexit landscape.