What the Result of the Withdrawal Agreement Vote means for the UK
It comes as no surprise that the British Parliament has voted against the Brexit withdrawal agreement that British Prime Minister, Theresa May, presented last November. The agreement was criticised by many mainly because of its lack of solid trade agreements as well as a ‘backstop’ which was designed as a ‘safety net’ in order to avoid a ‘Hard Brexit’. Yet, without an agreement, a number of options have been put on the table as uncertainty for the future of Brexit remains high.
Although the UK’s official departure from the EU was set for the 29 th March 2019, many are convinced that, due to recent events, the date may be postponed to July. With a no confidence vote being held tomorrow and the EU reluctant to approve another agreement, the holding of another referendum as well as a general election are all options for the future of Brexit.
The Effects of a No Deal Brexit on UK Businesses
The biggest possibility and equally great fear of many is that the UK will leave the UK without a deal, meaning that EU membership will abruptly end on the 29 th March 2019. Concerns of a no deal Brexit range from what would happen to EU citizens leaving in the UK and vice versa, to concerns of trade agreements with no transition period in place. Whilst car manufacturers raise questions surrounding delayed production related to parts and increased expenses, pharmaceutical companies are concerned about moving medicinal goods across borders as well as remaining connected to EU research and databases. Meanwhile, the aviation market is looking into concerns surrounding recognition of licenses as well as transport accessibility in such a no deal scenario.
Additionally, the abrupt change in trade regulations, as the UK would need to start operating under the World Trade Organisation rules, would mean that the UK will have to adapt to custom checks and tariffs with no transition period. The effect of increased trade prices coupled with fears that the pound as well as the cost of the country’s housing may fall significantly, could all have a negative impact on the UK’s economy. Small and medium business are said to be impacted the most, and many organisations are looking to relocate to a jurisdiction within the EU to maintain access to the single market.
All Eyes on Malta
Amongst the possible jurisdictions, Malta is being marked as one of the top five countries that companies are eyeing for possible relocation. As a member of the EU as well as the Schengen Zone, the island provides a solution for trade within the EU as well as facilitates freedom of movement across the EU for employees. The jurisdiction has also been making headlines recently for its probusiness approach, being the first country to legislate innovative and emerging industries such as Blockchain and Fintech. In addition, the island has seen a number of large corporations move to Malta as a result of the country’s beneficial tax rates and corporate legislation. Chetcuti Cauchi has already helped a number of organisations safeguard their businesses amidst Brexit concerns, by assisting them with relocating or expanding to the island and advising them on the right solutions to suit their needs.