My team recently completed an acquisition of a UK business by an Asian investor. Cross-border relations are thriving and it made me think about a recent survey by AMCHAM South China suggesting a bright future for Asia business, with many companies reporting a higher return on investment, despite the pandemic.
Undoubtedly, Asia is still an attractive prospect for UK businesses who are expanding globally. But what about the other way round? Should the UK be concerned about the impacts of Brexit and other political factors on our international relations? Does Asia need the UK as much as the UK needs Asia?
The short answer is yes. There are reassuring signs that businesses across Asia are not put off by the changes in Europe. In fact, some businesses are already looking to the UK for their post-pandemic expansion plans.
Many of my clients are choosing the UK as their base for future expansion and I’m not seeing concerns over conducting business across the continent here.
With there being so much uncertainty and apprehension over how Brexit will play out long term, this will be reassuring to UK industry.
So why is the UK still seen as the ideal European hub? What is attracting these big Asian investors?
- The UK is well known for its openness; ease of doing business; and vast international talents for Asia businesses looking to establish a base here.
- English being the dominant language spoken across the world and used most often in business. Therefore practically, it makes sense for foreign investors to start their expansion in the UK where they can converse more comfortably.
- Furthermore, Asian businesses tend to be more familiar with the UK jurisdiction and there is more understanding of general business practices and common law. English law is often chosen as the governing law for cross-border negotiations and there is a lot of trust in the British judicial system, which has a reputation for being unbiased.
My team is seeing many Asian companies use the UK to establish their overseas headquarter, here they can test the water, adapt the strategy for the European/Global market, and complete all the necessary legal steps in a system and language they are comfortable with. Once this is set up, rolling the business out across Europe/Globally is a much easier step.
The future is looking brighter too. We’re starting to see some settling over Brexit negotiations, and it’s becoming clearer what the future will look like for businesses, and how things will work in practice. Over time, any apprehensions over Brexit will fade as it becomes clear how important the UK is for global expansion, and our international connections will thrive.
Dr. Michelle Chen is a partner at gunnercooke, a full service commercial law firm. She is a dual qualified lawyer in China and the UK with 25 years’ experience advising on cross-border M&A and joint venture projects.