Europa Trust Company Ltd reports that if the United Kingdom (UK) leaves the European Union, UK companies who wish to access the European market could still do so by setting up in South Africa.
On 23 June the people of the United Kingdom will vote in a referendum on whether or not to leave the European Union (EU) bloc of 28 member states. Both campaigns for staying IN and OUT of the EU have argued about the UK’s ability to continue trade within the single market.
South Africa has been monitoring the situation of the referendum closely.
The UK is a significant trading partner of South Africa. Exports to the UK in 2014 totalled £2bn and imports totalled £1.6bn.
Last week South African Trade and Industry Minister Rob Davies briefed the media in Cape Town about an EU deal that could allow UK companies to continue to trade within the European single market.
“If the UK needed to export their products to the EU and if it had no arrangement with the EU then British companies could come to South Africa and they could establish themselves here,” the minister stated.
South Africa has been part of The Trade Development and Cooperation Agreement (TDCA) since 2000 which allows it access to the EU with other southern African countries. South Africa has also signed an Economic Partnership Agreement (EPA) on it’s own with the EU. Since then exports to the EU have increased over four years from £7bn in 2011 to £10bn in 2015.
Minister Davies explained that British companies, “could use South Africa as a base to access the EU market because the TDCA and now the EPA provide for that possibility.”
Should Britain leave the EU, British companies could look to South Africa to help them continue to trade in Europe.
There are many advantages of establishing a company in South Africa.
•It has modern company laws.
•South Africa’s VAT is 14%, which is lower than the UK and other European counties.
•Directors and shareholders of a South African company do not have to be South African citizens or residents.
•South Africa has an established stock exchange and is one of the world’s top 20 largest exchanges.
For more information and advantages of South Africa as a jurisdiction click here.
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