Brexit and subsidiaries: is it too early to set up EU branches?

13 Sep 2016

Bishop Fleming’s head of tax, Andrew Browne, warns of the dangers for UK companies planning to set up EU subsidiaries following the vote for Brexit with potential tax implications and uncertainty about the future relationship with the EU until the negotiations get underway

The UK’s decision to leave the EU raises uncertainties for those UK companies who want continued access to the single market. Companies that are heavily reliant on exports to the EU, for example, will no doubt be formulating contingency plans to ensure continuity of access to the single market so that they can carry on trading freely and under broadly similar rules as at present.

The process of leaving the EU will not start until the UK triggers Article 50 of the EU Treaty, which provides a two-year timescale for negotiations. The UK could seek to rejoin the European Free Trade Area (EFTA) and remain in the European Economic Area (EEA) in order to benefit from the single market.

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