Setting up abroad

14 December, 2017

Regardless of how Brexit impacts our trading relationship with overseas markets, it may make setting up a branch or subsidiary outside the UK a more pressing issue for your business.  Our quick guide below points you to some of the things you will need to consider in order to make the move as smooth and painless as possible. 

 

What type of business can I have there?

 

Understanding the type of business you can set up in your chosen location, or even before you settle on your destination, will be important.  Places which offer structures broadly similar to our limited liability companies are often desirable because it allows you potentially to limit your exposure if something goes wrong abroad (for example the business becomes insolvent).  You will want to know how long it takes to set up your ideal structure, as well as how much it may cost and what formalities are involved.  Despite the degree of harmonisation with the EU over laws relating to trade, the business structures even within Europe do still vary quite considerably.  Outside of the EU, rules restricting foreign ownership may come into play too.

 

Immigration and Employment Laws

 

Hiring the right staff, and getting the necessary flexibility in your workforce, will be a top priority.  You will need to know what visas and other immigration requirements will apply.  And whilst the UK’s employment laws might seem heavily protectionist compared to the US for example, labour laws in France are generally regarded as stricter than here – although the country is on a path to becoming business user-friendly, with recent reforms reflecting a much-welcomed ‘direction of travel’. You will need to understand what will be expected in terms of inclusion (gender, age, sexuality etc.), minimum wage, pensions, union representation and more.

 

Premises

 

You will need to give yourself sufficient time to set up shop – literally or metaphorically depending on the type of business and business premises you require.  This can be one of your biggest outlays if you have to spend money kitting out your factory, shop or office for example so you will need to be certain about your position as regards security of tenure for example.  A welcome surprise: property law in many countries is more flexible and occupier-friendly than in the UK, where landlords tend to hold sway.

Protecting your IP

 

Even businesses which don’t consider they have particularly valuable intellectual property will have a brand and trade secrets to protect.  Research how you can do this so you don’t put these assets at risk and understand how you can protect any inventions, know-how etc which may come out of your new venture to make sure ownership lies with you.

 

Trading Laws and the Regulatory Environment

 

Will you need to make any adjustments to your products or service offering to comply with local laws?  Do you understand and can you get the appropriate insurance to cover product liability?  Is your offering regulated abroad?  Licensing can be complex and time consuming so advance planning will be crucial.

 

If you have an existing partner or network already set up in your chosen jurisdiction make sure you fully understand the implications if you need to terminate that relationship – both legally and potentially reputationally.

 

Tariffs and Taxes

 

Tariffs and taxes are issues pervasive to almost every other aspect of setting up a business and will undoubtedly be one of it not the main factor influencing your decision as to which country to set up in, as well as what structure your new venture will take.  Input from accountants and tax advisers with knowledge of your desired destination will be key.

 

What other options are there?

 

Before incurring the time and expense of setting up a permanent base abroad have you explored other options like tying-up with a local partner or through a joint venture?  Have you thought about appointing an agent or setting up a distributor/network? 

 

Future-proofing

 

Just because your current set up means you could benefit in the short term from establishing a presence outside of the UK, are you certain that technological developments (e.g. robotics, AI) won’t make this redundant or at least of reduced importance in the near future?  Can you do more on line?  What about 3D printing?  It’s worth taking the time to look at all the whole of your business model before taking any major decision.

 

We have an international team working at Cripps, covering many overseas markets – including a partner who is dually qualified in England and France and a partner who specialises in the Spanish market, as a member of Marcalliance, a global network of independent legal experts, we are also ideally placed to help you expand your business internationally.

 

For further information, please contact Olivier Morel at olivier.morel@crippspg.co.uk  or +44 (0)1892 506 003.