Business Brexit Checklist
A few businesses are already setting up subsidiaries in the UK and the EU to deal with many of the issues arising from Brexit. Geraldine Fabre, Partner and head of the French desk at Sherrards explains her top tips to bear in mind in the event of a ‘no deal’ Brexit:
- Mergers and acquisitions – if you can manage the risk of currency volatility, then at law, the events of “Brexit” is unlikely to have a major impact on the regulations relating to UK share/sale purchase transactions unless they are affected by competition regulation.
- Employment – Unless special arrangements are put int place by the UK, employing and recruiting new EU nationals in the UK ill require work and residence permits. Each European country (UK included) is currently setting out their own set of rules.
- Shorter contracts- Your business model should allow enough margin to absorb currency fluctuation which will also have an adverse effect on your ongoing contracts if they cannot be terminated on short(er) notice.
- Transfer of EU data to the UK – It is not expected that the EU will confirm on short notice that the UK legislation is “adequate” to allow the transfer without additional protections of personal data to the UK from say a French or German company. Until then, business will need to use EC Standard Model Clauses. However, these clauses do not cover all circumstances.
- Intellectual property rights (IPR) and parallel imports – IPR will need to be registered both in the UK and in the EU. As well as this, UK businesses will no longer benefit from the EU doctrine of exhaustion, which prohibits IPR holders from their permission. This will give more opportunities to EU businesses to block parallel imports in Europe from their UK competitors. Consider also changing your “.eu” domain name now.
- Cross borer traders – Suppliers are advised to set up companies in the UK to ensure the continuity of the production and reselling chain and keep their market share in the UK. If you buy components from local suppliers, have you thought about conducting an audit of where they source their materials?
- EU regulations- Review your contracts to address issues such like a reference to Italian/ EU law as the applicable law to the contract, or a EU court (say Paris court) being competent to hear a dispute, or where the territory of your contracts states, “the EU”, or where contract refers to a EU regulation. For example: is your business subject to the EU’s eCommerce Directive? Or, what steps might you need to take to comply with separate UK and EU regulators in the future?
- Distributors’/ resellers’ insurance documents and trade/VAT/import papers should be in place and in this context, consider some of these questions and consider training staff:
– Are you familiar with terms such like: INCOTERMS, or being registered with an EORI number, being an Authorised Economic Operator, processing a customs and Safety and Security Declaration, the temporary tariff schedule for imports to the UK?
Do you know which country would be best suited to support your supply chain to EU customers/ suppliers?
– Do you have access to bank guarantees required by Fiscal Representatives?
– If you are a business that is stockpiling, have you checked with your insurer or insurance adviser on whether you are still fully insured?
Your business does not have to deal with Brexit alone. Contact Geraldine Fabre, as well as your tax advisors who should be able to assist.
This article is presented to you by Geraldine Fabre, Partner, Head of French Group