What to consider when starting an EU branch?

EU branch Brexit
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In the wake of Brexit, many businesses that used their UK branch to establish their EU position on the European market are considering relocation on the other side of the British channel.

You need an office place

Even for international companies, it makes little sense to maintain a UK presence, especially when there is still no clarification about the Brexit deal. The UK and EU negotiators have until the end of 2020 to come up with trade agreements and ratify the deal.

With approximately six weeks until the transition period ends, it’s fair to say that you may be considering moving your British business presence to France or Germany in 2021. However, the EU market isn’t without challenges. Here’s what you need to think about when you prepare for your new business branch. 

You need an office place

It’s odd to think of establishing a physical business presence in the midst of a pandemic. However, you’re more likely to get noticed in the EU market if you have an office. Indeed, first of all, some roles may not be suitable for a virtual workplace environment.

Additionally, renting office space can also help promote your brand visibility abroad. You’ll need to find a banking system that supports low transaction fees for euro money transfer. Office rentals can get expensive in popular locations, and it may take several months before your EU branch can support itself. There’s no need to increase costs with banking penalties unnecessarily.  

Great communications standards inside the business

Managing communication needs is never easy in a company. But building a two-way communication approach with a remote team can be challenging. One of the most common obstacles that international branches face is international communication. You can’t afford to let physical distances affect your corporate dialogue. Businesses have plenty of collaborative tools that can ensure your communication remains transparent, trustworthy, and engaging. Working in different locations is no excuse to let your EU-based team feel isolated. 

Work-life differs abroad

Every country has its own work-life balance. When you choose to open an EU branch, you need to be prepared for the local working life. For instance, a France-based company is likely to run a statutory working week of 35 hours. It’s a big difference compared to a UK or US branch that maintains a 40-hour week. Additionally, a French branch can include a longer lunch break. It’s not uncommon for employees to have their lunch break between 12 PM and 2 PM.

Work-life differs abroad

On the other hand, a Spanish branch can make time for a siesta break, between 1 PM and 4 PM. The typical Spanish workday ends around 8 PM. The bottom line: You need to understand and embrace the differences between your HQ and your EU branch. 

Language, language, language

Everybody has some level of understanding and fluency in English. Yet, nobody speaks English in the EU, except for the Republic of Ireland. Indeed, EU countries have their own language and culture, and therefore are unwilling to run business in a foreign language. It would prevent local integration and make your brand less relatable to the target market. 

As Canadian businesses have a strong trading relationship with the EU, both in terms of goods and services, it makes sense to move your UK branch to avoid the Brexit backlash. The CETA agreement allows for trade between the two commercial zones. However, an EU branch can provide you with a unique branded presence in the world’s largest trading bloc. 

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