BREXIT

SNAPSHOT
HOW PREPARED IS
YOUR COMPETITION?
Introduction and survey demographics
04

Will there be a Brexit deal?

05

Business outlook
05

How prepared are other companies?

06

Which readiness actions are firms taking?

08
Which macro factors are keeping business
leaders up at night?
10

Conclusion
11

QuickStart: to Brexit
12

About us
14
 I ntroduction

The global business community has been in a holding pattern since the
United Kingdom voted to leave the European Union on 23 June 2016.
The 29 March 2019 ‘divorce’ deadline is now looming and at the time of
publishing this report, no deal between the UK and the EU has been agreed.

TMF Group has taken a market snapshot
in order to understand current levels of
sentiment in the global business community,
and what approaches companies are taking
to ensure they’re as Brexit-ready as they can
be.
We also wanted to explore which macro
factors present the biggest risk to business
right now. Is Brexit the largest dark cloud
looming on the horizon, or is it the ‘Trump
effect’ or the issue of climate change that’s
keeping senior executives awake at night?
One of the most surprising results from
our research is the fact that nearly four in
five companies (77%) are continuing with
‘business as usual’ and waiting for the details
of Brexit to be known before finalising their
response plan. This is despite the fact that
three quarters (74%) believe Brexit will have
an impact on their business.
Amid the ongoing uncertainty, readiness
assessments can be carried out and many
aspects of these put into action now, such
as:
• establishing entities in other countries
• mapping and auditing supply chains and
employee contracts
• developing robust Brexit contingency plans.
While the ultimate Brexit outcome remains
unclear, what is very clear to us – and our
7,000+ business services professionals in
more than 80 jurisdictions worldwide – is
the opportunity companies have to prepare.
With careful planning, companies can
become more organised and agile than their
competitors in advance of Brexit.

Survey demographics 35% 39%

6%
Over the first two weeks of October 2018,
TMF Group conducted a 13-question, global 14%
survey. Most (80%) survey respondents are 6%
C-level, senior and manager level executives
based in Europe - excluding the UK (39%),
followed by within the UK (35%) and Asia
(14%). 6% of those who completed the survey
are based in Africa and 6% in North America.

4
Will there be a Brexit deal? Business outlook

Currently the UK appears to be no closer to There has, of course, been widespread

agreeing the terms of its exit from the EU concern about how the UK’s exit from the EU
and opinion remains divided as to whether will affect company outlooks.
a Brexit deal will be reached. There’s also
uncertainty over whether UK Prime Minister Three quarters (74%) of survey respondents
Theresa May will stay at the helm of the expect Brexit to have an impact on their
negotiations. business. Of those, four in five believe the
impact will be negative. Only 25% think
Just under half (44%) of those surveyed Brexit will have no impact.
believe a withdrawal agreement will be
reached. 38% say there will be no deal,
expecting a ‘hard Brexit’ and ‘WTO option’
to eventuate. In this scenario, the UK
would automatically revert to World Trade 60% 15% 25%
Organisation trade rules with the EU.

In answer to the question of whether Negative Positive Neutral

Theresa May will still be in her position on
29 March 2019, opinions are split with 36%
of respondents saying no, while 32% say yes
and another 32% are undecided.

The feeling is that the UK Conservatives

will still be in power come Brexit day (61%),
with 23% believing the Labour party will be
in government instead. 13% indicated the
Liberal Democrats.

5
 How prepared are other companies?

With ongoing uncertainty around what a final Brexit deal will look like, it’s unsurprising to
find that companies do not feel they have sufficient understanding of the impact Brexit might
have on their business.

On a scale of 0 to 100 (where 0 is no understanding) most respondents indicated a

knowledge level of 53.

0 100

53

15% feel better prepared for Brexit than
their competitors, while 85% believe they
are equally or less prepared than the
competition.
What’s concerning is the number of
respondents who revealed they have not
taken Brexit readiness actions. Nearly four
in five companies (77%) are choosing to
continue ‘business as usual’ or wait for
the details of Brexit before finalising their
response plan.
Just 11% of companies have established
an internal Brexit committee to follow
developments and have constructive
dialogue with key decision makers. An
incredibly low 7% have sought the help of
external experts in order to prepare. And
5% are relying on just one person within
their organisation to keep abreast of Brexit
developments and what they mean for the
business.

6
 are continuing with
business as usual
42%

are waiting for the details of Brexit

to finalise a response plan
35%

have established an
internal Brexit committee How prepared
11%
are other
companies?

7%
have sought external
expertise in order to prepare

5%
have designated one person
to focus on Brexit internally
7
 W hich readiness actions are f irms ta k in g ?

When asked which specific actions companies had undertaken to prepare for Brexit, almost
one in four (24%) had established entities in other countries.

Ireland and the Netherlands ranked as the most attractive of five key European jurisdictions
for setting up new entities.

1 2 3 4 5

The
Ireland Luxembourg Malta Jersey
Netherlands

The other most common readiness actions taken by companies are:

• steps to ensure they continue to meet accounting and tax requirements in the UK and EU
(23%), and
• audits of all international contracts to ensure their legality post-Brexit (18%). The same
percentage of respondents say they have developed contingency plans.

However, two in five respondents (39%) admitted their company has undertaken none of the
14 specific readiness actions provided in the survey, despite the fact these are proactive
steps that can, for the most part, be addressed now.

8
Which of the below actions has your company undertaken to
prepare for Brexit?

0 % - We have moved more employees to the UK

1 % - We have changed the domiciliation of shareholders

4 % - We have changed the location of our headquarters

4 % - We have obtained Authorised Economic Operator Status to

ensure we are recognised as a ‘trusted trader’ in both the UK and
EU post-Brexit

7 % - We have mapped and audited supply chains to ensure

continued operations post-Brexit

8 % - We have altered the hiring location of new employees

1 1 % - We have taken extra steps to ensure our Intellectual

Proper ty remains protected

1 1 % - We have audited our employees’ work locations,

immigration statuses and employment contracts

1 1 % - We have moved more employees to EU countries

1 8 % - W e h a v e e n s u r e d a d e q u a t e c a s h f l o w f o r V AT a n d
inventory

1 8 % - We have audited all international contracts to ensure

their legality post-Brexit

1 8 % - We have developed contingency plans

2 3 % - We have taken steps to ensure we continue to meet

accounting and tax requirements in the UK and EU

2 4 % - We have established new entities in other countries

39% - None of the above

 Which macro factors are keeping
business leaders up at night?

Brexit is, of course, not the only macroenvironmental factor currently affecting global
business. But it is seen as the current number one threat by respondents, with the instability
caused by nationalist governments and US President Donald Trump among the top five
largest causes for concern.

Which of the following macro factors presents the biggest risk to your
business?

Instability caused Donald

Global trade
Brexit by nationalist
tariff war Trump
governments

37% 22% 16% 15%

14% 5% 2%

Global Anti-plastic Rising tensions

warming movement in the South
China Sea
10
Conclusion

Our findings show that an overwhelming number of companies are continuing to take a ‘wait
and see’ approach to Brexit, despite it being a number one concern and one that most of
them expect to affect their operations in some way.

There is a serious question mark over whether trading will continue uninterrupted between
the UK and EU after Brexit, and it’s a question that crosses all industries and internal
departments.

• Will you be able to continue to sell your products and services as you do today?
• What is the impact on your partners, supply chains and clients?
• What are the true impacts of Brexit and what is just myth?
• Will your business still be legally compliant?
• What additional costs can you foresee and prepare for?
• Will you be able to continue to pay your staff uninterrupted?
• How can you update your board on the impact of Brexit on your business?

Brexit readiness assessments are essential for businesses operating across borders,
and with less than six months to go, now is the time to action them. Working with trusted
external experts on these assessments helps companies to stay up-to-date with the latest
developments and identify any risks to their usual operations. They further help companies to
understand what they can do to mitigate these risks, and to get a handle on the timeframes
involved.

Being on the front foot with your Brexit contingency planning allows you to get ahead of the
competition and be well placed when post-Brexit business opportunities arise.
 When it comes to preparing for
Brexit, we can give you a QuickStart

Our comprehensive ‘QuickStart: to Brexit’ services are aimed at helping businesses figure
out what Brexit means for them. We can help you to continue operating as painlessly as
possible, while realising your opportunities to thrive post March 29 2018.

Our international expansion experts are well versed in helping firms select, establish and
operate in new countries, whether that be in the UK, across the EU-27 or further afield. We
can further help you modify your business where you are today.

01 Training: Training session on the latest Brexit developments from those in-the-know
and who have relationships with those setting the policies, debunking the myths and
uncovering the areas that require your attention.

02 Brexit Working Sessions: Seasoned experts facilitate a working session with

you to assess your company’s readiness for Brexit and help determine how to best
continue to operate across the UK and EU-27.

03 Rapid Brexit Execution: Based on a readiness

assessment and output from the working sessions,
we are able to offer a range of services to enable
you to rapidly prepare for life after Brexit.

04 Guidance and Support: Receive full access to

TMF Group’s exclusive, multi-language help desk
and the ability to ask 7,000 experts in over 80
jurisdictions the questions you need answers to as
Brexit and its implications develop.

12
Key factors to consider in any Brexit plan

Trade People Structure

• What would Brexit • How will legal and • Will Brexit affect
mean for your ability HR responsibilities the legality of your
to sell services or change? UBO and ownership
products in the EU or structure?
• How dependent are
UK market?
your operations on • Will you require
• How will you remain the free movement of entities in both the
compliant with local EU citizens? UK and EU?
rules and regulations
• Will the passporting • What additional
post-Brexit?
of professional compliance
• What would Brexit qualifications complexities should
mean for your continue as before? you prepare for?
contracting?
• What do you need in • Does Brexit affect
• How will VAT and order to continue to your directorships?
GST obligations be able to pay your
change? employees?

Find out more about our

‘QuickStart: to Brexit’ and
download the brochure at
www.tmf-group.com/Brexit
About TMF Group

TMF Group helps its clients operate internationally and ‘belong’

wherever they are in the world. We do this by making sure they are
properly set up to do business in any country and compliant with
local and international regulations.

Our work includes helping companies of all sizes with business

services such as HR and payroll, accounting and tax, corporate
secretarial, global governance, administration and fiduciary
services for capital markets activities, private equity and real
estate investments. We also offer consultancy services to extend
your capabilities and help companies deal with the complexities
caused by growth and expansion.

In today’s environment, increasing business complexity means

that a one size approach doesn’t fit all - and the penalties
for getting it wrong are getting heavier. Operating in over 80
jurisdictions, we provide our 15,000 clients with on-the-ground
compliance and administration services so they can venture
further. We keep things running seamlessly, giving them the
peace of mind to focus on the bigger picture.

Our people localise the global world to help businesses succeed,

which in turn helps communities to prosper. We firmly believe
that the only way to be truly ‘global’ is to put local first, which is
what our team of 7,000 in-country experts do for businesses of all
sizes, every day.

Get in touch to see what we can do for you.

contact@tmf-group.com

tmf-group.com
Whilst we have taken reasonable steps to provide accurate and up to date information in this publication, we do not give any warranties or
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© November 2018 TMF Group B.V.