Business operations and Brexit
While there is still uncertainty around Brexit, New Zealand companies are encouraged to review all facets of their current business operations to consider the possible implications and plan accordingly. Companies should focus on their employees, contracts and the potential effect of any change in the pound.
People - Brexit may affect your EU or UK employees. Find out some things to consider in this section.
Currency - Brexit may impact your cash flow and budget. Read our advice in this section.
Contracts - Brexit may affect terms and clauses in contracts. In this section you can read some advice on managing and mitigating the risks.
Data - Brexit will change how the UK is classed under data protection rules. Find out more in this section.
Intellectual Property - Brexit may also affect your Intellectual Property rights. This section provides information on what you need to do to protect your IP.
A no-deal Brexit raises concerns around the issues of talent attraction and retention, the mobility of workers in the EU and the rights of citizens for businesses. The UK Government has made it clear that free movement between the UK and the EU as it currently exists will come to an end but that EU nationals currently living in the UK will be able to remain immediately post Brexit.
However, EU citizens who want to remain in the UK beyond the implementation period will need to apply to for a new UK immigration status under the EU Settlement Scheme. You can read more about the scheme here.
From 2021, there will be a new Australian-style points based immigration system, however the details of this are yet to be introduced. We encourage companies to stay up to date on UK Government updates in this area.
Companies are advised to consider:
- Do we have any EU employees working in the UK or UK employees in the EU?
- How many in each operation?
- Do my employees know what next steps to take to register as an EU citizen working in the UK?
- If you are a large organisation with an intricate supply chain, do we need someone to lead Brexit contingency planning?
The UK Government has created an Employer Toolkit which covers the key details of the EU Settlement Scheme and provides material to support affected employees.
Over the negotiation period and following the outcome of Brexit, there may be fluctuations in the pound. New Zealand companies are encouraged to seek advice from their banks on managing cash flows and budget.
A lower pound sterling value will directly impact New Zealand companies that export to the UK. To prepare for any fluctuation in the pound, companies should value what their break-even exchange rate is and consider scenario planning.
Companies should consider:
- What are the cash flow implications to my company of volatility in the exchange rate?
- Does my business need to make any plans to mitigate this?
Some current contract terms and clauses may become redundant when the UK leaves the EU. New Zealand companies can begin to manage their risks by reviewing existing contracts that go beyond October 2019.
UK contracts that refer to EU law may require amendment or renegotiation. Businesses should review whether their contracts make references to the UK as a member state of the EU.
Reviewing contracts is an important step for financial and related professional services firms because of the high number of cross-border contracts they rely on.
When reviewing your contracts, companies are encouraged to consider:
- Do I have contracts with the EU or the UK? How many?
- Do these contracts go beyond October 2019?
- Do my contracts refer to the UK as a member of the EU?
- Is there a reference to an EU law in the contract that could become redundant following Brexit?
- Do I have contracts that rely on the free movement of goods and services between the UK and the EU?
The General Data Protection Regulation (GDPR) is an EU wide regulation on data protection and privacy for all individuals within the EU and the EEA. After Brexit, the UK will become a ‘third country’ under EU data protection rules.
New Zealand companies managing EU citizens' personal data in the EU can transfer this to New Zealand without any additional precautions under our Data Adequacy Decision. However, additional protections may be needed to transfer personal data from the EU to the UK.
Companies should consider:
- Does my business require personal data to be transferred between the EU and the UK?
The UK Government has released guidance on using personal data if there is no deal.
The EU Commission has released guidance on data protection.
New Zealand companies that have goods or services protected under European Intellectual Property (IP) laws are encouraged to think about whether their IP will be protected in the event of a no deal.
Holders of European Union (EU) IP rights will primarily automatically retain those rights in the UK. The exception to this are owners of EU trademark, design, or plant variety rights who are unable to get their rights registered before the end of the transition period (currently 31 December 2020) or before 31 October 2019 in a no deal scenario.
It is recommended that New Zealand companies review their IP portfolios in order to ensure that they have the correct EU registration before the end of October 2019. This is encouraged in order to take advantage of the automatic conversion of EU registered rights to national UK registrations to avoid the costs of separate application fees in each jurisdiction.
The UK Government has published the below guidance on how IP may be affected if the event of a no deal scenario. They have also released a news story on the facts on the future of IP laws following Brexit.