Entrepreneurs stay positive and want to grow despite Brexit barriers The Hague, 29th March 2021

90 days after Brexit it appears that almost two thirds of businesses have higher costs, lower turnover, increased bureaucracy, and/or significant delays. This is according to research from the Netherlands British Chamber of Commerce (NBCC). For the goods sector, almost 8 out of 10 companies have been affected by these issues. The NBCC calls on both the British and Dutch governments to help companies, that have already been deeply affected by COVID-19, as much as they can, for example by increasing digitalisation and simplifying border formalities.

Since the trade deal between the EU and the UK went into effect on the 1st of January, 63% of those surveyed have found doing business between the UK and the Netherlands to have become more difficult. 71% of those surveyed attribute this to higher costs/lower margins whilst 40% of businesses have seen their revenue decrease as a direct result of Brexit. ‘The additional paperwork and increased costs have led to sleepless nights for many entrepreneurs’ says Lyne Biewinga, Executive Director of Membership at the NBCC.

In addition to the higher costs, companies are experiencing lots of issues with bureaucracy (63%). Among British companies, this is 84%. Companies are also suffering from delayed shipments (59%). This is 67% among Dutch companies. In the service sector, it is notable that more than a third of respondents noted the negative impact of Brexit on travel between the Netherlands and the UK. This number is likely to increase even further when the COVID-19 travel restrictions are lifted. The full veterinary and phytosanitary consequences of Brexit will also not become visible for agrifood exports until 1 October 2021 and 1 January 2022.

Businesses want less bureaucracy and better market access

Many of the problems that businesses are encountering are inherently linked to the UK’s choice to leave the Internal Market and Customs Union. Nevertheless, British and Dutch businesses do have suggestions for how the burden can be eased within the new framework. For instance, 48% of businesses surveyed see more digitalisation of customs procedures and the reduction of paperwork for border formalities as being important steps forward. More clarity over customs procedures in the UK would also be welcomed. Within services, 37% of those surveyed see simplified rules for business travel and 34% see recognition of professional qualifications as ways of easing the burden of Brexit.

‘For the export of goods an efficient and digitalised streamlined process for export is essential. Clear communication between all relevant parties in the system is key. A fast inspection process and systems that recognise users quickly are also important. Every minute counts when dealing with perishables and for cutting down overall costs in the supply chain. An efficient process can therefore mean the difference between a profit and a loss. The NBCC therefore calls upon both governments, in so far as is possible, to help businesses with streamlining the process for moving goods and services cross-border, for instance, through the digitalisation and the reduction of paperwork.’

Many British businesses are actively looking into establishing a presence in the EU. Of UK headquartered companies in the group surveyed, 45% will open an office in Europe or have already done so in response to Brexit. Reduction of bureaucracy (61%) and increased speed to market (33%) have been important factors in the decision-making processes of these companies. The Netherlands has scored relatively well as a place to open an EU presence compared to France, Germany, and Belgium. The following factors were cited as being important to entrepreneurs: good access to the

EU market; good knowledge of the English language; proximity to important markets; and a reliable and stable business climate. Just over a quarter of Dutch businesses (26%) have opened or have investigated opening an office in the UK in response to Brexit. “The results of this research are exactly what we see in practice,” says Jan-Willem Thoen, Brexit expert at PwC. "More and more companies from both countries are choosing to open a branch on the other side of the Channel to deal with the complexities caused by Brexit."

Entrepreneurs still have plans for growth despite Brexit problems

Despite reduced revenues and the negative impact of Brexit, businesses remain positive about their trade with the UK. 70% of British businesses in 2021 say that they wish to grow in the Netherlands in the future. Similarly, 69% of Dutch businesses plan to grow their business in the UK.

‘Despite the challenges of Brexit, British-Dutch businesses continue with ambitious plans for growth. Dutch businesses have remained entrepreneurial and pragmatic. The 400-year long trading heritage and significant trade relationship between the Netherlands and the UK has already weathered many storms and remains strong and vital. This can also be demonstrated from the fact that Dutch investment in the UK has never been so high as it has been in the previous year.* In these complex times, the NBCC will focus on helping companies to achieve this growth,’ said Anton Valk Chairman of the Netherlands British Chamber of Commerce (NBCC).

Source: The British Embassy 25/3/21