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On 1 January 2021, the UK left the European Union, completing Brexit. The future trade relations between the EU and the United Kingdom were defined on 24/12/2020 in a 1,000-page plus Trade and Cooperation Agreement. But what does this mean for companies? The expectations of German and British companies in the period of Brexit and Covid-19 are described in the German-British Business Outlook 2021. More than 50 percent of companies included in the survey expected a fall in their turnover in compared to the prior year and 33 percent wanted to move their business from the UK to Germany or another EU country by 2025. 

A “hard” Brexit was avoided, but what are the implications of the trade agreement?

Given that the Trade and Cooperation Agreement does not represent a final and fixed arrangement, the threat of high customs tariffs, or non-tariff barriers to trade continues to exist. The situation under the trade agreement is therefore in no way comparable to the situation when the UK was a member state of the EU. Products will become more expensive and trade more complicated. Meanwhile, Scotland is making efforts to re-join the EU. To what extent companies will be affected by the new arrangements in the Trade Agreement can be seen in the section Brexit Decoded .

Managing Brexit: 7 topics that companies in both Germany and the UK need to look at

Brexit requires companies to make a large number of complex adjustments.
The 7 topics are:

  • Strategic: Customers and products
  • Customs and foreign trade: Provision of goods and services
  • Tax and legal: Regulatory framework
  • Financial: Currencies and liquidity planning
  • Balance sheet: Methods and analyses
  • Transaction-based: Business planning and structure
  • Business travel and secondments: Visas and social security

We have brought together the principal approaches to a solution and can offer a variety of consultancy activities for the different relevant problem areas.

The opportunities of Brexit

Brexit does not only entail risks for German companies; there will also be new opportunities. There is a window of opportunity to re-evaluate your approach to business with the United Kingdom from the ground up in terms of cooperative partners, investment targets and market access. For example, there are new opportunities for cooperation with British companies in third countries. British companies have already invested strongly in the continent of Africa, giving them a leading role there. In this case, Great Britain is a long way ahead of the German economy, which has a rather low-key role on this continent.

Other areas where cooperation and collaboration would be attractive to German companies include the excellent research and development facilities in the United Kingdom itself. To name just two of these: they include the internationally respected universities and other institutions, and the much more readily available venture capital for risk financing. Finally, London will continue to extend and grow its position as a world-leading financial and trading centre.