Companies of all sizes and industries – from construction and glass processing to the latest financial and biomedical technologies find the UK a desirable location for their businesses. Britain’s decision to leave the EU, although shocking, had little impact on plans of Polish investors to expand to the UK. And now more than ever, the British government is working hard to support foreign entrepreneurs coming to the country.
Why Polish investors go to the UK
Britain is one of the most important destinations for Polish entrepreneurs. According to different sources, as many as 30,000 companies in the UK were established by Polish investors. Additionally, around 85,000 Polish nationals are self-employed or work as sole traders in the UK. In 2015, out of 650,000 new companies registered in the UK, over a quarter of them were registered by non-British citizens, and Polish nationals were the biggest group among them!
So why is Britain such a popular destination for expansion? Clearly, one of the most important reasons is the Polish diaspora – people who left Poland to study, work and live in the UK started to establish their own businesses and are now part of a thriving community. Many of these entrepreneurs target primarily Polish nationals living in the UK. The UK is also one of the most popular destinations for Polish companies which want to start operating on foreign markets. Size and sophistication of the local market, favourable business conditions (the UK was ranked seventh in the latest World Bank Doing Business ranking) and active government support make it a desirable location for business. Access to new technologies and funding place it among the top countries for companies with ground-breaking solutions. Patent your solution in the UK, and your corporate tax rate falls to just 10%. As a result, many Polish innovators see Britain as their opportunity to access wider markets. In fact, the UK was ranked third worldwide in the Global Innovation Index.
Which companies expand to the UK?
Successful Polish investors setting up their businesses in the UK represent a wide range of industries – from traditional activities, such as construction and engineering to fintech or lifesciences. Both well-established large companies and early stage start-ups appreciate the British market for its opportunities. LPP, a major clothing retailer and one of Poland’s biggest companies, signed a lease for a premium location on London’s Oxford Street – one of the most prestigious British shopping streets. Amica, a Polish domestic appliances manufacturer, acquired a British distributor for over £24m. Another major acquisition was carried out by Press Glass, a glass processing company, which bought a British-based company Glass Systems. SKB, an engineering firm from Radom specialising in drivetrains, bought Webster Drives, a 130 year-old Bolton-based manufacturer. Zencard, an innovative company with a technology enabling consumers to benefit from discounts and loyalty programmes through payments with credit and debit cards was supported by Level39 – one of the most widely-known technology accelerators. Freshmail, a company offering modern solutions for e-mail marketing, already has two offices in the UK – in London and Reading where it relocated its headquarters.
Should investors be worried about Brexit?
The decision by British voters during the Referendum in June 2016 surprised many. It is official that Brexit is a reality. However, the question what will happen on the day Great Britain leaves the EU remains unanswered. The situation is without precedence and the whole world will be watching closely as the negotiations progress. At the moment, the facts are following: Prime Minister Theresa May stated that Article 50 will be triggered by the end of March 2017, after which theUK will have two years to negotiate its terms of exit. Should the investors worry? Financial markets reacted dramatically, the value of the British currency dropped to its lowest levels against the dollar since the 1980s. However, many Polish entrepreneurs believe that UK will remain open for business and investors from abroad will still be welcome – most of them do not postpone or abandon their plans to invest in the UK. On the contrary, they feel now is the right time to make their move to the UK, to be fully operational and prepared for the day the actual exit happens. Only some of the most risk-averse entrepreneurs decided to shift their expansion plans to different locations, e.g. Germany or France. Great Britain remains one of the Poland’s most important trade partners regardless of Brexit. For ambitious Polish businesses, with eyes on global rather than on neighbouring markets, the UK will remain an effective springboard into North America, the Middle East and the Far East, where Britain’s long-standing trading relationships are influential.
How does the British government support foreign investors?
The Department for International Trade is a ministry dedicated to fostering international trade, growth of British exports and inflow of investors to the UK. Teams working at British Embassies all over the world and in the UK make their best efforts to encourage and support entrepreneurs to choose Britain as their expansion destination. They actively promote the UK as a market with vast opportunities and an attractive business environment. Support provided by these teams to potential investors is free of charge and easily accessible – it includes practical information on the market and administrative conditions, contacts to commercial partners, support with selection of an appropriate location or suggestions regarding networking and exhibiting opportunities. Most young innovative companies can also count on mentoring support and assistance in finding an investor.
So far, the UK’s Department for International Trade has supported around 250 companies from Poland, which have declared an intention to invest nearly £400m pounds and employ over 2,500 people in the UK.