Brexit and its Economic Consequences – Business Relocation to Cyprus as an alternative solution

Britain’s vote to leave the EU on the 23 of June 2016 has led to serious consequences – dramatic fall in sterling; jobs cuts; collapsed investment deals – and the British economy has entered to a period of uncertainty.

Due to the economic impacts of Brexit many companies are considering to leave the country and to move their headquarters to other jurisdictions within the EU.

According to Bloomberg (26/09/2016):

The U.K.’s vote to leave the European Union has left more than three-quarters of chief executive officers saying they would consider moving their headquarters or operations outside Britain, according to a survey of 100 business leaders by the accountancy firm KPMG.

“CEOs are reacting to the prevailing uncertainty with contingency planning,” KPMG U.K. Chairman Simon Collins said in the statement. “Over half believe the U.K.’s ability to do business will be disrupted once we Brexit and therefore, for many CEOs, it is important that they plan different scenarios to hedge against future disruption.”

Pound Depreciation

While the pound has fallen by 13 percent against the dollar since the vote, some of the direst pre-referendum predictions have failed to come true, particularly about the economic outlook. Still, May has yet to trigger a formal exit, saying only she won’t begin the two-year process this year.

“Policy makers should be really concerned about a leaching of British business abroad and should engage with business early to understand what assurances they can offer and closely monitor any shifts overseas,” Collins said.

The survey reported on executives’ intentions anonymously. In public, CEOs of U.K. companies have been more circumspect about their intentions as the conditions of Brexit remain unclear.

Among the handful of U.K.-based companies that openly raised the possibility of a move is mobile carrier Vodafone Group Plc, which said in the aftermath of the referendum that it couldn’t guarantee that it would keep its headquarters in the U.K. if the negotiations produced an unfavourable outcome.

Low-cost airline EasyJet Plc said it was seeking an operating certificate in another EU country in order to ensure unfettered access to the bloc after Brexit. Insurer Lloyd’s of London Ltd. may have to move some of its operations out of the U.K. if it loses access to the single market, Chairman John Nelson has said.

Foreign Banks

Non-U.K. banks that have significant operations in London have been more outspoken about the possibility of moving, with executives of JPMorgan Chase & Co. and UBS Group AG warning that they might have to relocate thousands of jobs.

KPMG interviewed 100 U.K. CEOs of companies with annual sales of at least 100 million pounds ($130 million) and at least 500 employees. The survey was carried out over four weeks from mid-July.

Shanda Consult can assist companies with issues concerning business relocation to Cyprus,  setting-up customized infrastructure, as well as with customized re-structuring the company from the legal and tax point of view and to develop value-adding solutions using Cyprus as business headquarter.

Why Cyprus?

Cyprus is an international trade centre since more than 2000 years. During more than 2000 years, a culture of sensitively incentive concepts has been developed in order to optimize the island’s attractiveness for international business.

Today, being member of the EU since 2004, Cyprus is an international business and finance centre with extraordinarily advantageous tax incentives. The general corporate tax rate is one of the lowest in the EU, 12,5 %, the effective taxation of income from intellectual property is 2,5%.

Apart from the competitive tax framework, Cyprus has many more advantages to be considered. Because of its political stability, high standards of education and living, advantageous geographical location, law crime rate and warm climate Cyprus is an ideal place to live and to conduct business. English is widely spoken and considered as business language. You may read more about the advantages of Cyprus here.

Through our corporate business centre, Euroserv Business Centre which was designed to accommodate international companies we can offer full-fledged modern offices and workstations with full office service to any interested company.

Euroserv Business Centre is an exclusive and modern business centre in the office building Methonis Tower, located prestigiously on the main axis of Nicosia, on Makarios Avenue in the heart of Nicosia, which is considered to be the best business area in Nicosia.

Due to its excellent location the main authorities, regulatory bodies, governmental administration offices such as the Registrar of Companies and banks such as the International Business Unit of Hellenic Bank, can be reached within 10 minutes.

EuroServ Business Centre is also in walking distance to the Hilton Hotel and many other hotels. You simply can’t find a better and easier location in Nicosia!

We can assist you with the complete setting up and maintenance of your business office in Cyprus, including the needed staff.

For a personalized consultation for your business relocation and other business needs in Cyprus, please do not hesitate to contact us.

 

Source: Bloomberg

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