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Branch or subsidiary


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I am getting a number of queries from clients regarding Brexit

A number of clients are fright forwarders and worried how Brexit will affect things and are wondering whether to open a business in an EU country to mitigate the effect.

The question is should they open a branch or establish a subsidiary company in that country, which in one particular case would be Ireland

Any commenst on pro's and con's gratefully received





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12th Feb 2019 16:41

It's not an area that I deal with in practice but with a branch at least you know all the usual reliefs - capital allowances, loss reliefs etc - will generally be available, whereas with subsidiaries, the current rule that EEA subs can potentially surrender losses to the UK parent could potentially be at risk after Brexit....

Thanks (2)
13th Feb 2019 12:28

We have switched (in last 6 months) to advising subsidiaries rather than branches for anyone new, particularly if they are resident in France. It means they have a proper French business if anything does go wrong post 29/3.
We haven't switched existing branches currently, as they are already established, and there would be a load of re-registration required.
Branches can make the accounting much more complicated, but if they are running a foreign currency bank account and can get the UK/abroad split right it is OK.
If you are working with other accountants abroad, make sure they copy you in on every correspondence to the client. The Irish accountants I am working with nearly gave my client's company away by having the wrong shareholdings!

Thanks (1)
13th Feb 2019 13:07

Even ignoring Brexit, this is an impossible general question as the answer will depend on scores of variable factors specific to the actual cases.

On the basis these clients are only now considering the issue with 43 days to go, I would suggest that they wait and see.

Thanks (2)
to Vaughan Blake1
13th Feb 2019 13:36

They did discuss last summer but there is no rush, just they have asked the question and I need to answer.
Mt gut feeling is subsidiary so they are fully in EU.

Thanks (0)
to Smokoe Joe
13th Feb 2019 15:24

If they opt for France, Message me and I can put you in contact with our sister co. Most of the team speak English.

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to accountantccole
13th Feb 2019 17:44

Thanks for the offer, but it will be Dublin as one of the owners is a dual Irish/UK national.

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