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The UK, led by London, has rapidly become a global centre for Financial Technology innovation. With an estimated 500 FinTech companies in the UK, Brexit will cost the taxman around five billion pounds* over the course of the next ten years, following the inevitable exit of the FinTech companies themselves. As well as London being a global financial hub, the UK offers specific regulatory benefits, that when combined with a massive pool of talent have made the UK the natural choice to be located both from a European perspective and for some companies, even as a global base. But with their status as financial institutions recognized across the EU and EEA under threat, all of these businesses will not wait for trade deals to be resolved. They will immediately begin forming plans to relocate at least some of their operations, and the majority of new jobs will be outside of the UK.
The likely FinTech winners would be Amsterdam, Dublin and Luxemburg; all cities that already boast a progressive regulatory environment, significant tax advantages, and international talent pools. Dublin would probably benefit most within Europe: It has a big tech scene, taxes are particularly low with a 12% corporate rate and major FinTech companies such as MasterCard, Apple, PayPal and First Data already have significant operations there providing critical mass.
In the UK, we now face years of uncertainty in the market. However, my advice would be to keep calm and carry on. Nothing will change for at least two years and all arrangements on a European level will work as they have until now. As with other FinTech businesses, PPRO Group will make sure to support our partners during this time of transition and uncertainty. We have planned for a Brexit to happen and there won’t be any disruption to our business and support for our partners and customers. We will make sure that we can navigate any hurdles that might come up over the next few months as details of the Brexit are ironed out.
*estimated 500 FinTech companies averaging 25 million GBP revenue and a profit of 5 million GBP, paying 20% tax = five billion GBP over the next ten years.
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