Bridging the Brexit gap
As our nearest neighbour prepares to finally leave the EU, having the right strategy for doing business in the UK has never been more important.
Our fortunes may not be as closely linked as they used to be, but Irish companies still sold more than one and a quarter billion euros worth of merchandise into the UK in August (compared to €4.85 billion for the whole of the EU).
There are many useful sources of information on trading in the UK. The British Irish Chamber of Commerce is a good starting point, as is the UK Department for International Trade in the British Embassy in Dublin. Support is also available from state agencies such as Bord Bia, InterTrade Ireland, Local Enterprise Offices and Enterprise Ireland as well as the Irish Exporters Association and the Irish International Business Network.
Which set-up is best?
Once you have decided to take the plunge, you need to decide on the best way of operating in the UK. For a small enterprise it might be prudent to start by appointing a sales agent or a distributor – signing up customers can be a time consuming process if you are still developing your business at home and this approach will allow you to test the market before employing a direct sales resource on the ground.
Partnerships are another option, particularly if you are struggling to find an agent. Finding the right partner requires plenty of due diligence (including checking customer references as well as credit history), but they can help you build sales while keeping your costs down.
An established company might be better served establishing a UK-registered company or acquiring an established company, which might help you avoid any future trading restrictions.
Do your research
The legal systems in Ireland and the UK have many similarities, but it is important to familiarise yourself with variations in commercial law. It would also make sense to have contracts reviewed by a lawyer with a good understanding of UK commercial law and to engage a local legal representative to deal with UK contract work.
There will be some sectors where regulations remain largely unchanged after Brexit, but you have to prepare for the possibility that the UK will introduce new regulations for some types of business that may be very different to what you are used to at home.
Any Irish company looking to set up a new operation in the UK would need to be aware that profits made in the UK would be taxed at the local rate rather than the rate paid by the company in Ireland. Tax treatment may be different for a business trading through an agent than a UK-registered company.
Protect your bottom line
If you are going to buy and sell in both euro and sterling, currency hedging will help mitigate the impact of volatility between the two currencies. It may also make sense to start small by targeting a region of the UK rather than the whole market.
Regardless of the approach you take to expanding your enterprise you will need to know how this part of your business is performing financially. A cloud-based accounting solution such as Big Red Cloud will give you an up-to-date view of income and expenditure.
