Crowe: Trading Worldwide: Adapt to survive
Organisational restructuring brings opportunities and challenges and Brexit is no different.
However, when the Brexit deal was signed on 1 January 2021 businesses worldwide were battling the challenges of national lockdowns and restrictions amid the COVID-19 pandemic. The challenges of the past year have demonstrated that organisations and their people can adapt, think outside the box, work together and keep moving forwards during very difficult market conditions.
The nature of a global pandemic means the challenge and the suffering is universal – all countries – all people – all organisations. It is a test of resilience and purpose.
We live on a relatively small island and trading internationally is something we have done successfully for centuries. It is also something we need to keep on doing.
While some businesses have sadly fallen victim to the pandemic, many more have found a way to survive and even prosper. Whether your business is new or established, take a good look at the challenges ahead, review learning points shared by others, minimise unnecessary risks and loss-making operations and take positive steps to seize opportunities Look worldwide and consider the possibilities.
Trading internationally requires attention to legal requirements around licensing, labelling, customs declarations, imports, exports, data and recruitment as well as negotiating different taxation regulations. The EU is now part of the wider picture.
Don’t let the increased paperwork make you forget the basics….
Check how product names work in your target country or countries. Does the name have an unhelpful meaning in the local language; can it be pronounced by locals; is the colour of your packaging appropriate for the culture of the target country?
Not every organisation wants to look worldwide. For those looking to trade on new terms with our neighbours in the EU, there is a significant degree of consistency. The 27 current countries are still one economic bloc and 19 of them have the euro as their common currency.
It is also important not to lose sight of the people who work in your business. You know you have to invest in the people to keep the business working, but have you considered the impact of Brexit on your EU employees? The previously open border with the EU is now closed.
Under the transition terms, assuming EU employees lived in the UK at 31 December 2020, they can continue to work in the UK without a work visa until 30 June 2021. They can only continue to work in the UK after that date if they apply successfully under the two-tier EU Settlement Scheme (EUSS). Applications can take several months to be decided. EU nationals who want to stay in the UK and have not yet applied need to do so as soon as possible.
Although employers have an interest in this procedure, they cannot apply on behalf of their people. Applications under the EUSS must be made by the relevant EU national.
Importantly the UK government stated that up to 30 June 2021 it will be discriminatory to ask an employee whether they have made an application, or enquire as to the outcome of any application, under the EUSS.
On 1 July 2021 any EU national who has not been successful in their EUSS application, or who has not applied at all, will be in the UK illegally.
In recent months, here at Crowe, we have seen businesses step up to face the challenge. We have been helping clients comply with the new regulations and requirements as well as helping them manage their global, mobile workforce.
Charles Darwin’s well-known quote applies: “It is not the strongest of the species that survives, nor the most intelligent… It is the one that is most adaptable to change.”
For advice and guidance on international trade issues, including VAT and Customs, please contact Chris Mould, Partner at Crowe in Cheltenham on 01242 234421 or by email to [email protected]
