5 Ways The UK Has Changed For Entrepreneurs Since The Brexit Vote

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As leaving the European Union is unprecedented, we have only forecasts to go on for the UK's future. So far, here's what changed:

As things heat up in Westminster and we enter the last four months before Brexit day, there seems to be more urgency on both sides of the leave/remain divide across the UK. As more industry experts come out in support of a ‘People’s Vote’, such as the group Tech 4 Britain, there are many more who still insist that Brexit provides a unique opportunity for business growth.

But does anybody know what the outcome of leaving will be? As leaving the European Union is so unprecedented, we have only forecasts to go on for the future. Throughout the past two years of uncertainty since the referendum, the British economy has seen some stumbles, but what has really changed for founders looking to start their company in the UK?

#1 Volatile GBP

The day Vote Leave won, the British pound suffered a record drop and has struggled to return to pre-referendum levels. Following the Salzburg EU Summit, the pound took another fall while Prime Minister Theresa May addressed the nation.

The reduced value of the pound has shown some opportunity for exporters to the EU as it edges closer to the euro. It’s also been a great opportunity for foreign investors, such as a number of American movie firms who chose the UK as their primary filming location for some of the year’s biggest blockbusters.

A devalued pound has not been so great for UK importers and foreign workers in the UK. This means a higher risk for non-UK citizens, like those on the Tier 1 Entrepreneur Visa UK. However, there are many notable British entrepreneurs who believe that the British entrepreneurial spirit will drive Britain through the struggles of Brexit.

#2 Uncertain Immigration System

Since the referendum, the government have been fairly secretive about what the immigration system would look like post-Brexit. Home Secretary Sajid Javid said earlier this year that Britain would be keeping the same system it offers for non-EU migrants and extending it to all from the EU.

Using a ‘genuine entrepreneur test’ during Tier 1 interviews, for example, ensures that the candidate has a fully credible business idea. However, the vast reduction of opportunities for European entrepreneurs could see Britain lose its place as a prime destination for international founders.

With the loss of freedom of movement, entrepreneurs coming to Britain will need to show a genuine business idea and provide £200,000 to fund it. The Tier 2 Work Visa route also has a £30,000 minimum salary requirement and is only for those being sponsored by an employer. The thousands of EU citizens working self-employed in the UK would no longer be eligible to enter without this huge cash injection. For those with the resources, however, Britain is still a great place to start a business and still has formidable international reach.

#3 New Visa Route

The home secretary has revealed a new visa route which will be implemented in early 2019. The ‘Startup Visa’ will replace the current Graduate Entrepreneur Visa but will not require a degree, allowing people of all educational backgrounds to apply.

While this route will still most likely have a large investment expectation, it shows a positive sign that the government is still considering ways to make the UK as attractive as possible for international startups.

#4 Economic Outcomes

Since the referendum, it is reported that funding for British businesses from the European Investment Fund has all but collapsed. The government asserted that they would implement a replacement scheme but have yet to follow through.

In addition, the latest Brexit deal has led to reports predicting a dismal economic future for the UK from such independent bodies as the National Institute for Economic and Social Research (NIESR) and the Centre for Economic Performance (CEP).

The NIESR’s research shows that the UK could be as much as £100 billion poorer within the next 10 years, while the CEP’s results show British households hit by up to £2,000 per year within the next 12 years. In the face of these doomsday predictions, the risk to entrepreneurs may seem too high to chance. However, as Jonathan Reed has said, ‘if you tie an entrepreneur’s hand behind their back, they’re still going to go out and fight’.

#5 What Change?

In spite of the last two years, the government’s Small Business Survey 2016 showed that the smaller a business, the less concerned it was about the impact of Brexit. For early-stage startups, Brexit could be the last concern on the way to success. The survey shows that with more employees and a more export-focused business, Brexit grows as an issue.

New business founders may want to consider this situation before planning their businesses any further and identify how they could work this to their advantage.
While Brexit continues to rock the British Isles, it’s clear that the government haven’t given up on entrepreneurs yet. They will be looking to international innovators to drive a post-Brexit economy and prove to the world that Britain can still be a world-leader in business.

 

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