Manufacturers setting up overseas operations

Published by Rodney Sutton on 17 December 2020

Share this article

Manufacturers fearing a no deal Brexit are stepping up plans that include establishing overseas companies.

Manufacturing businesses with material EU sales are taking active no deal preparations by placing their European operations in a European-located incorporated company. The move will help insulate the business from trading complications caused by border hold-ups and from exchange rate fluctuations in the likely event of a no deal outcome.

Choosing a suitable EU location for the newly incorporated company is far from straightforward. Manufacturing businesses need to consider a location that is suitable based on the concentration of their activity weighed against the bureaucracy and costs of incorporation. Some countries have very slow and laborious procedures in setting up a business, whilst others can be extremely costly.

Choosing physical premises from where to store and distribute stock will be an operational matter, but the cost and time of negotiating and signing a lease, guided by local legal counsel, will need to be factored in. So too will the cost and compliance of recruiting staff, particularly if flexibility in employment contracts is desired.

The stress and time in establishing European locations on UK management teams should also not be under-estimated, given the further complications of COVID restrictions and the economic stresses that have resulted – now is not the time for to take your eye off the ball on UK operations!

We recommend businesses review and build a strong and robust management structure in the UK that brings agility to a rapidly changing economic and regulatory landscape yet allowing local businesses to operate without day-to-day owner and strategic management oversight. Strong management reporting, resilient IT infrastructure and an incentivised, supportive and committed lower management function is critical.

For further information and guidance on setting up overseas operations, please contact me here

Share this article

Email Rodney

    • yes I have read the privacy notice and am happy for Kreston Reeves to use my information

    View teamSubscribe

    Subscribe to our newsletters

    Our complimentary newsletters and event invitations are designed to provide you with regular updates, insight and guidance.

      • Business, finance and tax issuesPersonal finance, tax, legal and wealth management issuesInternational business issuesCharity and not-for-profit issues

      • Academies and educationAgricultureFinancial servicesLife sciencesManufacturingProfessional practicesProperty and constructionTechnology

      • yes I agree I have read and accept the privacy policy and am happy for Kreston Reeves email communications I have selected above

      You can unsubscribe from our email communications at any time by emailing [email protected] or by clicking the 'unsubscribe' link found on all our email newsletters and event invitations.