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Adapt your company to Brexit

Support for the company before Brexit in the Community of Madrid

 

The Community of Madrid, in collaboration with the Official Chamber of Commerce, Industry and Services of Madrid and the Madrid Business Confederation (CEIM-CEOE), offers through this portal useful information so that Madrid companies can learn about the impact of Brexit and the measures that can be adopted to face with greater guarantees and fewer risks the Withdrawal Agreement between the European Union and the United Kingdom.

Although said Agreement and the exit of the United Kingdom from the EU took place in January 2020, as of January 1, 2021, the relationship between the United Kingdom and the European Union is based on the "Trade and Cooperation Agreement", which despite being an ambitious agreement, represents an important change for citizens, companies and administrations of the EU and the United Kingdom,

In 2022, and despite an impact in the two previous years, marked by the pandemic and Brexit, the United Kingdom still represents the fourth destination market for Madrid exports behind Belgium, Portugal and France. During the year 2021, the accumulated sales to the United Kingdom from the Community amounted to 3.257,1 million euros, equaling the exports of the year 2019, which reached a value of 3.200 million euros.

According to the statistics of the Secretary of State for Commerce, in 2020 the United Kingdom became the first destination for investment from Madrid abroad, with almost €2.500 million, which represents more than 20% of the investment Madrid in the UK. Regarding the investment received, and despite the decrease that occurs in 2021 in general throughout the country, the CM housed 77,2% of the investment from the United Kingdom, and we will foreseeably recover the figures for the year 2019 ( last financial year prior to Brexit and the pandemic). In this year, investment from the United Kingdom amounted to over €2.000M.

There are some 1.150 exporting companies from the Community of Madrid to the United Kingdom, of which some 600 are considered regular exporters. The main export sectors in 2019 (the year we took as a reference to make the comparisons) were precious stones and metals, machines and mechanical devices, the pharmaceutical industry, the automobile industry and aeronautics. It is therefore the companies in these sectors that have been most affected by the Withdrawal Agreement, especially in terms of the administrative procedures involved in exporting such as customs formalities, the imposition of tariffs, and possible sanitary and phytosanitary controls. Some SMEs have also been affected by liquidity problems caused by the delay in export procedures and therefore in the collection of invoices. 

In this context, the consequences of leaving the United Kingdom are being crucial both for companies in Madrid and in the region of the Community of Madrid, which is also being affected by the lower intensity of investment flows from the United Kingdom and by the constant regulatory changes that may affect the repatriation of profits. The growing weakness of the pound may also reduce the value of Madrid's investment in the United Kingdom due to depreciation of the exchange rate. 

Once the United Kingdom has acquired the status of a "third country", in addition to the aforementioned direct consequences and uncertainties faced by all economic agents, we have important implications such as the need to request prior authorization for certain investments, the request prior authorization for regulated activities, obtaining UK markings, or the application of safeguard measures in the transfer of personal data from the European Union to the United Kingdom, among others...

The Community of Madrid, aware of the importance of supporting the internationalization process of the region's economy, makes available to all interested companies the Internationalization Single Window (VUI), a personalized attention office that works to offer comprehensive information and advice on existing public support instruments in order to face the impacts of Brexit and strengthen the internationalization capacity of the Madrid business sector.

Among other actions, and in addition to the personalized advice service for all companies that have commercial or investment relations with the United Kingdom by the VUI, where we offer specific information on the different institutional supports of the State, the Community or the City Council, We organize specific seminars at a sectoral or thematic level (for example, to obtain the British Retail Consortium certificate, of great interest to the commercial, agri-food and consumer sectors), and also international missions with the aim of supporting the opening of alternative destination markets.