Post-Brexit Britain will offer more for start-ups

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If leaving the EU were to damage that, then it would have been a terrible mistake. But will it? It is easy to understand why some people say it might. Start-ups need access to talented people, but migration curbs may prevent that. A recession hits new companies the hardest, because they have no fat to fall back on. Worst of all, they could lose access to the single market and these are the businesses least able to cope with dozens of different regulatory regimes.

The trouble is, so far the facts tell us something different. Company Warehouse, a business formation agent, has crunched the numbers for new registrations since the vote, looking at a decent sample size of 4,700 new entities. It found that in the week after the vote, 13pc of directors starting new businesses were from another EU country. That compared with 11.5pc in the previous six months.

The two main nationalities of non-British founders were Polish and Romanian, but Irish, French, German and Italian entrepreneurs were all well-represented. We were pretty sure that we would find a dramatic fall in the number of EU citizens starting businesses in the UK given the uncertainties over their future status post-Brexit, concluded the report. In fact, we found that the numbers had gone up.

It is certainly fair to say that is not what you would expect. True, it would be stupid to read too much into it. Many of those founders had no doubt been planning their venture for months, and saw no reason to pull it. And yet, there are actually three good reason why post-Brexit Britain will be more attractive to entrepreneurs.

First, we will have lighter regulation, and it will be simpler to set up a company than anywhere else in Europe. Outside of the EU, we can ease the burden on entrepreneurs further. According to the World Bank, the UK is already the 17th easiest country in the world in which to start a business. France is 32nd , Italy 50th and Germany is 107th and that is before you get into the five years it takes to close one down. If we can get ourselves close to top-rated New Zealand we will be more attractive to European start-ups.

Second, we will soon have the lowest corporate tax rate of any major economy. Our rate was already scheduled to come down to 17pc, and that is now being accelerated to 15pc. That compares to 29pc in Germany and 33pc in France. The rate of capital gains tax for entrepreneurs is just 10pc, meaning that anyone who starts a company here can keep almost all of what they make. Despite what some people on the Left think, no one starts a business to make the government rich. They want to be rewarded for the stress involved. In the UK, they will be.

Finally, there is a pool of talent and venture capital money available that makes the UK one of the easiest places in the world to grow a business. Our migration policy can now embrace high-skilled Indian, Israeli, or Chinese staff, as well as EU nationals. Even better, the huge devaluation of sterling has just made the UK a lot cheaper.

The one drawback is losing access to the single market. But often entrepreneurs operate in such small niches, or selling such new products, that harmonisation makes little difference. So long as we adopt the right policies an ultra-competitive tax and regulatory regime with a generous immigration policy there is no reason the UK should not be Europes entrepreneurial hub.

Berlin can try to tempt our start-ups if it wants to . But the truth is, after we have left the EU, Britain will be more entrepreneurial, not less.

Source: http://www.telegraph.co.uk/business/2016/07/11/post-brexit-britain-will-offer-more-for-start-ups/