All eyes are on the UK this month as Brexit looks like it’s finally going to happen on January 31. What does this mean for business and for startups in Belgium and the UK? Should we be worried? We discussed the potential fallout with Start it @KBC managing director Anna Thomlinson, who happens to be British, and Pieter Moeremans, co-founder of Plannr.eu, a software company that facilitates the process of relocation for expats and businesses.
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A common theme: uncertainty
The biggest problem with Brexit? Until it actually happens, nobody really knows what it’s going to look like. As Anna says, “For most founders there’s enough uncertainty in trying to run a business, without not knowing whether you are going to expand to the market next door.” Both companies going to and coming from the UK are facing changes in everything from taxes to HR. For Belgian startups that want to expand to the UK, Anna says “there’s a good chance that trying to employ people in the UK will be different than how it is now,” particularly if you’re looking to send a Belgian team member across the channel. New shipping costs and import taxes are also looking likely.
For tech the biggest issue on the horizon is HR-related. Companies on either side of the new border fear heaps of visa paperwork. Pieter adds, “For international talent it will be increasingly difficult to come to the UK compared to before Brexit.” On the positive side, it looks like the UK government is already making efforts for startups to come to the UK by streamlining procedures.
To scale or not to scale?
That is the question! One major worry about Brexit is the potential challenges for scaling. Pieter says, “London is just the biggest startup hub [in the region], so it just pops up on your radar for any European startup.” With most industry-specific decisions up in the air, companies just don’t have enough information to decide whether to take the leap. As Anna says, “It’s a considerable concern if you’re a startup looking at the market next door to you looking to scale up, you thought the UK would be on the horizon, you put that in your investment plan and now what do you do with it?”
The UK is seen as a kind of gateway to the US, as companies based there are already operating in English. Anna says that while some startups are considering skipping the UK to go straight to the US, she doesn’t think it’s the right thing to do. “The UK is the fifth biggest market in the world, it’s not going to stop being right up at the top even after Brexit.” Having worked for an American sales company in the UK, Anna knows from experience how similar the British and American sales cultures are. “you are training yourself for how to do your sales and your business. It’s like levelling up.” And as Pieter points out, there’s still a lower threshold to go to the UK even after Brexit compared to the US: “think about the time zones and the paperwork as well.”
How to prepare: partner up
Since Brexit is such a big grey area, it’s hard to assess the impact it will have. As a service provider, Pieter would rather be safe than sorry when it comes to preparation. However: “In Belgium we are very risk-averse, so we tend to overreact when it comes to preparing for these kinds of risks. I would definitely say even if the worst happens a lot of people are prepared, but the worst will probably not happen.”
Start it @KBC is addressing all these Brexit challenges by partnering up with BLCC (Belgian-Luxembourg Chamber of Commerce in Great Britain) and KBC London. These two organisations are gathering all the hard information out there about changes coming up to pass on to businesses. Anna says, “It’s about preparation and knowing that those organisations exist, not avoiding it just because you don’t know.” Since the UK remains an important market that can take a company to the next level, she says “make sure that market is still on your timeline.” BLCC has all sorts of different advisory services, from HR to taxes, so they can answer “pretty much all the questions that a startup would be asking themselves when they’re starting to relocate.” Meanwhile, KBC London has a network of Belgians already in the UK to learn the ropes from. “If you make the move after Brexit and go and chat to them, you’ve got a whole network already established.”
With things changing so quickly, Pieter says “online information on Brexit quickly becomes obsolete.” That’s why it’s important to check in with these Start it @KBC partners as well as the UK government. Plannr.eu also has support for post Brexit moves to the UK in the works. “Definitely after Brexit take a look at our platform, I think it will be helpful for you,” he says.