Consequences of Brexit for Corporates
The consequences of Brexit for corporates based in Luxembourg depends on the outcome of Parliamentary discussion in the United Kingdom (UK) and on the final vote in UK Parliament, i.e. if the deal negotiated between the UK and the European Union (EU) will finally be accepted or not.
In case of a disorderly Brexit, with significant barriers to trade and movement of people between the EU and the UK, Luxembourg-based corporates will likely face direct costs in case of hard Brexit. They are also likely to be indirectly affected, through the various investment and banking services and products they are currently benefitting from, most notably, market access requirements, conformity assessment or customs formalities.
A disorderly Brexit has as immediate effect that the UK steps out of the internal market and the customs union. The UK thereby becomes a so-called “third country” from an EU perspective. Corporates are then faced with import duties only on goods, as well as with customs procedures such as border controls, import licenses and export declarations.
It is however worth to note that the Brexit procedure in itself will not affect the granting of credit for trading activities with the UK. However, depending on the economic consequences of the Brexit – Euro-Sterling Pound exchange rates, collateral valuation and other risk factors – the conditions for lending may change.
Frequently Asked Questions
You and your trade relations
- What should I do for my banking business when I do business with the UK after Brexit?
- What is changing in my trade relations with the UK?
- Can I still do business with my British suppliers after a no-deal Brexit?
- Can I still do business with my British customers after the ‘no-deal’ Brexit?
You and your transactions
- Do I still have to use an IBAN if I transfer money to the UK?
- Do I still credit my trade activities with the UK?
- Do I need extra credit lines after Brexit?
- Do I run exchange rate risk if I do business with the UK after Brexit?
- Can I hedge exchange rate risk after the Brexit?
- Can the bank help me to estimate the risks of a Brexit for my company?
- I still have British pound banknotes at home. Do I need to redeem it quickly?
- After a no deal, what changes does Brexit for my GBP account (at my Luxembourgish bank)?
- What will be the consequences of a no deal Brexit for a euro payment to the United Kingdom?
- Will a payment transaction to the United Kingdom take more time after a no-deal Brexit?
- I also have an account with a British bank, can I still keep it after a no deal Brexit?
- Mandatory Notifications in the Context of Brexit, CSSF – November 2019
- Opening of the E-Desk Portal for the Purpose of the Mandatory Notification, CSSF – August 2019
- Brexit and its consequences for financial markets, by Gilles Walers – June 2019
- Information issued by Guichet.lu
- Information issued by the Luxembourgish Government
- Law relating to the measures for the financial sector (available in FR only)
- Customs guide for businesses issued by the European Commission (EC)
- Brexit Checklist for Traders issued by the European Commission (EC)
Gilles WALERS, Legal Adviser – email@example.com – Tel. +352 46 36 60-1