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Twenty years after leaving the Netherlands for the UK, Geoff van Sonsbeeck is pondering whether to return. He and his wife, Baukjen de Swaan Arons, founded online maternity clothing retailer Isabella Oliver in 2003 when she was pregnant with their first child. They thought they would live in London, where their company is headquartered, for the rest of their lives. But the Brexit vote has changed that.
“I am worried,” says Mr van Sonsbeeck, the company’s chief executive. “We came here because the UK was an interesting place to work. It was diverse, international and fast moving. That is all under threat now.”
There are around 3m EU nationals in the UK and the government has made encouraging noises about allowing them to stay — provided that UK citizens living in the EU are similarly protected. But a deal may prove difficult. The mood between London and Brussels became confrontational at the beginning of May after a meeting between Jean-Claude Juncker, the European Commission president and UK prime minister Theresa May.
This has particular relevance for corporate Britain. More than one in 20 directors of small and medium sized enterprises in the UK are EU nationals, according to analysis by Opal Transfer, a money transfer platform. The company’s research shows there are more than 35,740 entrepreneurial European business owners “creating jobs, growth and tax revenues in the British economy”. It warns that an exodus would hit the UK economy badly.
Mr van Sonsbeeck recites the challenges Brexit threatens to the business. The company’s ranges are made in the EU, mostly in Portugal. The clothes for Isabella Oliver and Baukjen, a newer women’s clothing line, are mostly imported to the UK from manufacturing facilities in Europe. But two-thirds are then exported, the majority to the US.
“If we go on to WTO rules we will have tariffs and administrative hassle,” he says. Already, costs have risen by almost a fifth because of the fall in the value of sterling.
“We are small, with 67 staff, but we have 15 nationalities. It is like the United Nations in here,” he says. “London is a melting pot and so is our company. We are London. But I don’t know if I will be able to find the staff.”
Mr van Sonsbeeck recently offered a job to a Polish national who was returning to the UK after working in China. After accepting the job, the applicant opted to go to Berlin instead. Mr van Sonsbeeck thinks that decision is a sign that Britain’s image is already suffering, whatever deal is eventually negotiated with the EU post-Brexit.
The couple — Ms de Swaan Arons is creative director — are considering Amsterdam, Berlin or Barcelona. The first move could be the warehouse, with 20 jobs. “Even if we have a free-trade deal I don’t know if we could get workers to staff it.” The company relies on EU migrants, Mr van Sonsbeeck says. “I hope we don’t need to. A year ago I would not even have been considering it.”
The group turns over £11m a year and revenue at Baukjen has grown by 40 per cent over the past 18 months.
Piotr Kubalka, who runs an accountancy business catering to international businesses, believes that the UK retains many attractions.
Capital Business Links, in west London, advises more than 3,000 businesses. “One of the main reasons people come is because it is so easy to set up a business in the UK. It takes a couple of hours. “In Poland if you want to set up a company you need to wait two months for administration,” he says, adding that companies endure multiple checks by the tax authorities every year.
Germany and France are also less attractive than the UK, he says, and cites the high cost of setting up a business in Germany.
Mr Kubalka says some of his clients do not trade in the UK but want a UK holding company because it is easier to deal with the US and other markets. “Even in software, which could be anywhere, an English brand is better than a Polish brand,” he says.
“These people do not care what the politicians say. They will act on the basis of facts not politics.”
If the UK became uncompetitive and less able to trade internationally businesses would close, he adds.
However, he is clear that he is not moving just yet. “I love the UK. You can live how you want. There are no barriers. It is the best place to progress.”