The UK’s vote to leave the EU poses a threat to the European business community, according to new research conducted for RSM, the 6th largest audit, tax and consulting network, by the European Business Awards. The research asked almost 700 of Europe’s successful business leaders their views on Brexit. 41% think that the UK is now a less attractive investment destination and 54% believe Brexit poses a threat, compared to 39% who see it as an opportunity.
A few months ahead of the government’s plan to invoke article 50, 14% of European businesses are already feeling the effects of Brexit, with twice as many (32%) expecting to be affected once the separation is complete.
European businesses are most concerned about increases to their cost base. Of those European businesses who will be affected by the vote to leave the EU, 58% expect the cost of doing business to rise and 50% expect a hit on their bottom line. Moreover, these businesses are concerned about the effect the Brexit vote will have on their suppliers, with 42% expecting it to have a negative impact in the years to come.
As Theresa May prepares to publish her Brexit plans, European firms with UK operations are calling on the two sides to come to an agreement on the single market. Continued access to the single market is the number one priority for European firms with operations in the UK, followed by tax incentives and free movement of labour.
Anand Selvarajan, Regional Leader for Europe, RSM International, commented: “The UK’s decision to leave the EU is not just a challenge for British businesses but for companies across Europe, uncertain about what Brexit means for their international ambitions. It is vital, in this period of uncertainty, that businesses focus and prepare for the future based on the emerging facts and are not paralysed by the countless doomsday theories out there. Trade will continue and businesses need to be agile in responding to the evolving political and economic landscape.”
European businesses are more despondent when it comes to the impact on the UK. 58% believe Brexit poses a threat to UK businesses with 41% of European businesses saying the UK is now a less attractive destination for investment, compared to 35% who do not.
Indeed 25% of respondents who intended to invest in the UK reported that the decision is now under review, with 9% saying they have been approached by organisations looking to attract investment into other EU states following the UK’s decision to leave.
Adrian Tripp, CEO, European Business Awards said: “Surveys conducted both before and after the referendum show us the continuing belief of many European businesses that Brexit has made the UK a less attractive place to do business. To stop this becoming a self-fulfilling prophecy the UK Government needs to get an agreement in place with the EU as soon as possible.”
Source: RSM International