Brexit as a new opportunity for German companies

[German version]

Competition with Great Britain has spurred Germany to introduce past innovations in corporate law, and the Brexit may do the same.

In 2008, Germany introduced the Unternehmergesellschaft haftungsbeschränkt (UG) which dispensed with the requirement that entrepreneurs post starting capital or “Stammkapital” to found a company. This was partly in response to flight to the UK. German businesses were founding limited liability companies under British law to escape German capital requirements. Such companies enjoyed all the protections of the European Union.

Marion Halft, wikimedia

Marion Halft, wikimedia

With the Brexit, there may be new reasons to found German affiliates in the United Kingdom. It is clear that much will have to change when the UK leaves the EU Single Market and Customs Union. Prime Minister Theresa May has also signaled that her government may opt to take the UK down a route of deregulation and low corporate taxation to retain global competitiveness.

Some German companies are therefore founding business entities in the U.K. not only as a shield against potentially adverse outcomes to Brexit but also to provide a basis to take advantage of possible competitive changes within the jurisdiction as its relationship with the EU changes.  This includes potential advantages of trade agreements between the U.K. and other global trading partners.

U.K. corporate entities can be founded without incurring the expense of a global law firm. Services like Link Legal Solutions Ltd. offer off the shelf limited company registrations in England and Wales, including providing a UK postal address and all necessary documentation.

Registering a limited company in the UK can be done online in as little as 30 minutes for very little cost.  Brexit may encourage a new kind of immigration of German companies to the UK—although for very different reasons than those which inspired the U.G.