The impact of Brexit on start-ups in the UK

Since the British people voted to leave the EU, their business fabric has undergone a significant transformation. For start-ups, it has brought challenges, but also unexpected opportunities. In this article, we explain the impact of Brexit on start-ups in the UK.

Access to the European market

One of the biggest challenges for start-ups post-Brexit has been the loss of direct access to the European single market. Previously, any UK-based company could trade freely with all 27 EU member states. Now, many startups face new trade barriers such as new tariffs, customs delays and an increasing red tape.

These complications have meant additional costs, and here we are talking about both time and money. Sectors such as e-commerce, logistics and food have been particularly hard hit. For many startups, adapting has meant opening subsidiaries in Europe or completely redesigning their supply chains.

New rules for hiring international talent

Another aspect that has changed is the hiring of foreign staff. Before Brexit, startups could freely hire workers from all over Europe. Today, they need to comply with new visa requirements that can be costly and complicated for a start-up.

This has led to a shortage of talent in key sectors such as technology, digital marketing and engineering. Many start-ups have been forced to look for alternatives, such as encouraging international telecommuting or investing in local training for new professionals.

Changes in European funding and support

The UK is no longer part of European funding programmes such as Horizon Europe, which supported innovative projects. This has meant a significant loss of opportunities for start-ups in high-tech sectors or scientific research.

Although the UK government has launched initiatives to compensate for this absence, it is considered that they are not yet at the same level of support as the EU used to provide. This situation has created uncertainty for some entrepreneurs who are considering setting up their businesses outside the UK.

New opportunities for start-ups

Despite the challenges, Brexit has also created some opportunities. Regulatory independence allows the UK to develop its own economic and fiscal policies that are more favourable to innovation and entrepreneurship.

For example, some formalities for setting up companies have been simplified, and tax incentives have been announced for certain strategic sectors. Moreover, start-ups have begun to look beyond Europe, exploring markets such as the United States, Asia and Latin America.

This openness to new opportunities has been key for many companies that have managed to grow and diversify, even in the midst of uncertainty.

Adaptation and resilience of the entrepreneurial ecosystem

One of the most important lessons of Brexit is the resilience of the British entrepreneurial ecosystem. A large number of startups have shown great resilience, changing their business model, rethinking their strategies and taking advantage of new technologies to remain competitive.

Despite the difficulties, London remains one of the most important innovation hubs in the world, and other cities such as Manchester, Birmingham and Edinburgh are gaining prominence as emerging centres for entrepreneurs.