On June 23, 2016, the United Kingdom took a historical decision to leave the European Union. This decision will affect a variety of aspects, but most importantly businesses and trade. Businesses are now faced with unanswered questions about their future. Those who supported to leave the EU promised voters that they would get a more profiting trade deal. But trade agreements don't happen overnight and businesses must follow the same EU rules until new ones are made in the coming years. This uncertainty doesn't sit well with entrepreneurs and businesses, and many are already expressing their discomfort. Businesses are now put in a situation where they don’t want to make new decisions, investments, or hires.
The pound has drastically fallen to its weakest point since 1985. This is because investors are moving their money out of the European Union and buying foreign currencies. Now emerging markets will find it hard to get investors due to the economic instability. This means a higher cost of capital for startups and tighter controls over that capital by investors. Such behavior is expected from the investors because they are putting their money in riskier locations. Therefore, when investors are looking for new markets to enter, The United States, India, and China are on the list. Of those, China is a risky market due to its Communist Party government rules and regulations. India, for the EU markets, could be a high culture shift. This then makes the United States the safest market for investors to enter.
During times of uncertainty investors will want markets with a lower cost of entry and a strong longevity of employment. Businesses will want flexible employees, such as freelancers and contractors, both which America has a high quantity of. The move of investors here means more business and a booming economy. America offers everything to EU investors that are looking for safe ground. Obviously, this switch will not happen in one day, but there is a strong likelihood of an increase in capital investment dollars back into the US from outside sources. With all this change happening currently, now is a great time to begin your startup! American entrepreneurs, get ready for a flood of capital from EU investors. With the right idea, implementation, and proper legal counsel, your startup could be the next big thing!
The most important step to take for startups is getting the right legal advice. The best partner a startup could have is a business lawyer, they'll keep you updated on current issues that could otherwise affect your startup immensely. Since the economy and trade is in a fluctuating state, many laws and rules will be constantly changing, therefore it is crucial that a startup consults with a lawyer to avoid future headaches and financial loss. Many entrepreneurs make the mistake of hiring a lawyer after they've been put in a serious issue, but having a business lawyer from the beginning can prevent such issues. Some crucial stages of a business that require a lawyer are the planning stages, employee hires, litigation, and patents. Consulting a lawyer regarding these stages bodes well for the startup and frees them from any legal tensions. Overall, with the Brexit decision, investors are looking for other areas to invest their money in. This is the perfect chance to begin your startup with the right legal help. Go ahead and contact us today!