It has been three years since the UK voted to leave the European Union and the uncertainty around Brexit has left many UK business owners that either trade or operate in Europe with unwarranted desolation. Many are worried about the threat of decreasing investments, business confidence and opportunities. What’s more, UK freelance workers who travel within the EU zone for work may be affected by the complications that come with the end of free movement post Brexit.
Once the UK leaves the EU, we can expect British businesses and workers to be treated equal to that of others from outside Europe who don’t have access to the financially beneficial European markets. Leaving the EU will effectively exclude companies, including sole traders and freelancers, from unrestricted access to European investment, business opportunities, as well as the much appreciated freedom of movement – all privileges that they currently enjoy.
The Importance of accessing EU markets
Currently, businesses of all sizes including freelancers that are based in EU member states have access to the various EU markets including the very lucrative Single Market and by extension gain unrestricted access to a ‘home market’ of approximately 500 million consumers to trade with freely. This alone does well to emphasise the importance of maintaining business ties to the EU markets as not only will it significantly expand your customer base but it also enables you to operate within the Eurozone. Operating under the Eurozone means that you can bank in Euros and also benefit from the Single European Payments Area (SEPA), therefore making payments and trade deals with other EU based businesses free of charge and all the more seamless due to all EU member states adhering to similar banking processes.
Freelancers who currently operate in the EU also benefit from increased business confidence and investment. This is mainly down to stringent measures the European commission have put in place to match its objective of ensuring the free movement of products within the market and maintaining high safety and operational standards for consumers. The commission also requires business owners to adhere to a set of operational regulations that give them that added level of trustworthiness among potential investors from within the EU and outside the continent that can’t be afforded elsewhere.
Location independency: retaining access to the EU when you’re out
There are now a variety of ways in which entrepreneurs and freelancers can start their own businesses in European countries, which in turn should give them access to the EU Single Market. One popular option that comes to mind is the European Business SE (Societas Europea), which is the go-to solution for many international businesses. It’s a type of LLC company statute that enables you to run your own business in any European country with the use of a single set of rules and regulations. However, the process involved doesn’t come easy or cheap for that matter, as applicants are expected to abide by a strict set of requirements which include registering the company’s headquarters in a European country whilst also establishing and maintaining a presence in more than one country. As a business owner you’re also expected to having a minimum capital of €120,000 to be able to set up a European Business SE.
This however isn’t a tangible solution for all, especially for freelancers and microbusinesses who do not have a physical address or the specified amount of share capital, both of which are rather restrictive requirements for the latter types of businesses. Conversely, another possible solution for those of us who would like to gain or retain access to the EU markets is through the e-Residencyprogramme. This is an initiative backed by the Estonian government that can provide a unique and seamless solution for driven entrepreneurs with great ideas who don’t necessarily have the resources to start a business the traditional way by giving them the opportunity to become an ‘e-Resident’ of Estonia. This means they will automatically be given the legal requirement to incorporate and run a business within the nation and gain unprecedented access to the EU Single Market, without actually the need for them to be based in Estonia. This could potentially be seen as a cheaper and more seamless alternative to the European Business SE for freelancers and start-ups.
What’s more, the process of starting a business with this initiative is simple and straightforward, with it being completely digital, saving you from the painstaking bureaucracy that comes with other similar initiatives. By the same token LeapIN for instance, is another solution which works in conjunction with the e-Residency programme and gives freelancers and microbusiness owners the added benefit of an all-in-one solution for incorporation, taxation and identification. This allows you to focus on managing the business while it takes care of the dull and time-consuming admin that business owners otherwise have to deal with.
All of these solutions are viable options for many UK based freelancers, sole traders and microbusiness owners that are looking to remain within the EU and retain access to the Single Market. The benefits of trading within the EU are incredibly lucrative, and making sure you’re within means to do so to gain access to European investment and business opportunities is paramount. Whether you’re a UK microbusiness owner or freelancer whose trading rights are set to change after Brexit or if you’re looking to enter the European single market, the time to incorporate a business within the EU is now.
By: Allan Martinson, CEO of LeapIN