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Confidence vote in Britain

More than 1,000 EU firms plan first UK office after Brexit

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EU firms are applying to operate in the UK

More than 1,400 EU-based firms have applied for permission to operate in the UK after Brexit, with over 1,000 of these planning to establish their first UK office.

The figures, revealed in a Freedom of Information request, are seen as evidence that the UK will continue to be a leading player on the global financial stage after Britain leaves the EU.

The FOI revealed that by October 2019, the Financial Conduct Authority had received a total of 1,441 applications from firms to use the Temporary Permission Regime (TPR).

When the current passporting system becomes defunct, the TPR will allow European Economic Area firms and funds to continue to operate in the UK, whilst they seek full authorisation from UK regulators.

The FOI also found that 83% of passporting firms that applied under the TPR currently operate under a ‘service’ passport, which means they do not currently have an office in the UK. This suggests that more than 1,000 firms intend to set up an office in the UK for the first time after Brexit.

The FOI also shared the breakdown of firm type for those that have applied for the TPR. This includes more than 100 banks, which will either be setting up offices in London for the first time or boosting their current UK presence. Firms planning to move to the UK span all sectors in financial services including asset managers, insurers, exchanges and fintech firms.

Michael Johnson, a consultant at financial regulatory consultancy Bovill which requested the FOI, said: “These figures clearly show that many firms see the UK as Europe’s premier financial services hub.

“This is a clear vote of confidence in the UK financial services sector and good news for the UK’s service economy overall. The high proportion of firms without an existing UK branch that have applied for the TPR suggests there will be some movement of staff from these EU27 firms into the UK.  

“Although much attention has been given to the number of UK firms moving staff and operations into Europe, there is also likely to be movement in the opposite direction.

Firms on the continent with global aspirations will need to continue to do business here

– Michael Johnson, Bovill

“The results of the FOI may have been anticipated by those in the industry, many of whom have recognised for some time that London remains Europe’s only truly global financial centre, and firms on the continent with global aspirations will need to continue to do business here.”

The FOI gave a further breakdown of TPR submissions by the firm’s home state. The country from which the highest number of firms sent TPR submissions was Ireland at 228. Second was France with 170 submissions, Cyprus was third and Germany was fourth, with 165 and 149 submissions respectively.

Mr Johnson said: “The fact that Ireland tops the list is perhaps to be expected, given how interlinked the UK and Irish economies are and their shared strength in asset management. These numbers tell us that Irish firms want to continue this close relationship post Brexit and believe that a presence in London would be beneficial to them.

“With many French and German firms intending to establish a presence in the UK, coupled with the fact that France and Germany will be driving much of the EU’s future trade negotiation with the UK, it is clearly in the economic interest of both sides to secure a trade deal that benefits everyone.

“The position of Cyprus in the top four home states is more surprising. Cyprus is often used as a base for firms that want to be subject to a regulatory regime perceived as ‘lighter touch’ in order to passport into more tightly regulated jurisdictions such as the UK.

“Firms that have based themselves in a ‘light touch’ jurisdiction to take advantage of regulatory arbitrage, and now want to set up their business in the UK, may need to revisit their regulatory compliance if they wish to continue doing business in Europe’s largest financial services market.”

Ed O’Bree, a partner at Bovill, concluded:”In practical terms, these figures mean that European firms will be buying office space, hiring staff and engaging legal and professional advisers in the UK. This augurs well for the UK economy, as the country will retain its reputation as a prime location for financial services in Europe.”

UK boosts Africa trade

Stronger economic partnerships with African nations will form part of a UK Government drive to meet the continent’s growing demand for investment. 

Programmes from the Department for International Development (DFID) and the Department for International Trade (DIT) will boost clean energy supplies, digital networks, and jobs and business opportunities for women, as well as improving trade infrastructure.

They are also expected to mobilise billions of pounds in private sector investment for Africa which has eight of the world’s 15 fastest growing economies. There is huge demand on the continent for clean, sustainable and innovative investment. 

The announcement comes as British and African firms announce £6.5 billion worth of commercial deals today, including Diageo investing £167 million in Kenya and East Africa to support sustainability of breweries; a £25m investment by Matalan in Egypt to launch 11 shopping outlets.; and GSK investing a further £5m in its operations in Egypt.

3 Comments to More than 1,000 EU firms plan first UK office after Brexit

  1. During our ridiculous 4 year Brexit ‘transition’ period, ‘the click bait’ implying British financial companies would relocate at the first opportunity to Frankfurt and Berlin was overwhelming. We were told by Carney and Heseltine and Adonis that our financial sector would go to hell in a handcart should we dare to actually honour the referendum vote and extricate ourselves from the clutches of the EU.

    Apparently they were misinformed.

  2. This is a click bait title and misleading propaganda : if you read the article it actually says ‘1000 firms apply for permission to continue to operate in UK’. Not one actual job is being created, the author simply assumes some might be.

    • I agree……nor does it point out that the DIT is also recommending that British companies do the reverse exercise, and set up offices in the EU……all things that were not required for any of the parties pre brexit.
      All that blood and thunder …only to end up with all sides having all these new offices all over the place, to do that which was well-nigh seamless before.
      Come on guys, if you’re gonna tell the story, at least read us out ALL the pages….

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