Despite the uncertainty and confusion caused as a result of Brexit, trade between the United Kingdom and China will remain ‘optimistic and fruitful’, according to two-third of UK businesses in mainland China.
In Deloitte’s ‘Welcome Ashore: A guide to investing in the UK for Chinese companies’, it predicts that the UK will remain one of the most attractive destinations for Chinese companies to invest in outside China and to expand their global business. |The strive for a ‘golden era’ between the UK and China has been emphasised, and significant changes has been made by the UK to ensure this golden era will continue. For instance, with the introduction of the two types of visa’s, the Start-up Visa and the Innovating Visa, this creates easier accessibility for non-EU/EEA businesses to invest and set businesses up within the UK. As a result, the UK is now home to Chinese companies in sectors ranging from banking and advanced engineering to retail and property development. Furthermore, commitment to strengthening the bilateral trade between the two could be seen from introduction of most ambitious packages of policies, business incentives, tax credits, tax rate reductions and visa support in the world to ensure Chinese investors make the UK their global partner of choice.
The UK currently has a Corporation Tax rate of 20 per cent, the lowest in the G7, and the equal lowest of the G20. For companies that turn innovation into manufacturing, this can be reduced to as low as 10%. Additionally, London is established as the Western Hub for offshore renminbi (RMB) trading, with almost two-thirds of all RMB payments outside China and Hong Kong now taking place in London. 28 per cent of all international RMB payments made, are made in the UK. Thus, it could be said the UK’s offer to Chinese investors is one of the strongest in the world.
Strong support from third parties to Chinese investors can also be seen within the UK. For instance, there is strong support from the China UK Business Association (CCCB, 英国中国总商会), a non-profit organisation that facilitates business, investment, and mutual understanding between China and United Kingdom. They engage with a diverse range of backgrounds and professionals including businesses, academic, diplomats, the media, NGOs, politicians, and policymakers. UK Trade and Investment (UKTI) also works closely with Deloitte to ensure Chinese investors (start-up, medium-sized business, a corporate or institutional mentor), given help and support they needed.
The factors that foreign businesses would need to consider (as outlined within the Deloitte report) such as corporate structure; tax arrangements; choice of location obtaining premises; obtaining visas for migrant workers/ non-UK employees; mergers, acquisition and other forms of investment as well as tax arrangement. All these elements have been made simplified with the existence of legal firms that operate as a link between businesses in China and UK.
Finally, the significant rise in visa applications (11% increase in 2018) demonstrates the growing strength of the UK and China relationship; with 400% increase in applications in the last decade this presents a huge opportunity to foreign investors that wishes to invest in real estate development within the UK. In fact, more than 730,000 visas were issued to Chinese nationals in 2018, 25% of all entry clearance visas granted.
Therefore, the inclusiveness of the UK legal and economy sector as well as other support from local firms and third parties within the UK demonstrates that, despite the uncertainty Brexit produces, the support received within the UK is certainly advantageous to foreign investors and remains attractive to those who wishes to expand into other markets.
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