Expert opinion: Brexit attracts more startups to Berlin

British startups will be facing hard times post-Brexit. Many internationally operating startups are considering locations in other European cities, especially in Berlin. The <link https://deutschestartups.org/news/stellungnahme-die-deutsche-startup-hauptstadt-berlin-ist-der-gewinner-des-brexit-london-der-verlierer/#more-8924>German Startups Association</link> for example claims that “the German startup capital Berlin is the winner of Brexit”. Berlin was ahead of London in 2014 and 2015 already, <link http://p216128.webspaceconfig.de/http:///h>in terms of the scale of investments in local startups</link>. If Brexit really takes place, this trend is likely to increase. Bernhard Rohleder, managing director at Bitkom, fears that Great Britain will “move away from the standards of the digital single market” and that “enterprises from Germany will have to deal with different rules in Great Britain”. In view of a British exit from the EU, Cornelia Yzer, Senator for Economic Affairs, speaks of “significant changes throughout Europe” and demands: “Berlin needs to be prepared - the city already offers the best prerequisites for entrepreneurs from abroad.” 

However, the experts also agree that an open and strong European single market is a prerequisite for a strong startup scene. “We are European founders,” the German Startup Association says. Bernhard Rohleder, managing director at Bitkom, still hopes for a “common single market that includes Great Britain” and that after Britain's exit from the EU “a coherent legal framework will be preserved”. 

German founders who have chosen a British Limited Company over German limited liability companies, for instance a GmbH or UG, will face particular problems. Since a notary entry is not required for a Limited Company, shareholders were able to save on time and money. Due to the European Community Law, they were able to immediately relocate their company to Germany, even though it was initially founded in Great Britain. In an <link http://www.gruenderszene.de/allgemein/brexit-limited-startups>expert article on “Gründerszene”</link>, lawyer Carlos Katins fears that these Limited Companies will face serious consequences in Germany. After all, these companies are only recognised on the grounds of Great Britain being a member of the EU. After an exit from the EU, shareholders might face unforeseen consequences regarding taxes and liabilities. In view of such and other planning insecurities in the coming years, <link https://www.berlin.de/sen/wirtschaft/presse/pressemitteilungen/pressemitteilung.490932.php>Cornelia Yzer</link> says: “This makes it all the more important to keep up the dialogue with our British partners.”