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European Restructuring in the 11 month Brexit Implementation Period
Japan tax alert 13 February 2020
Brexit confirmed
On 29 January, the European Parliament ratified the Brexit Withdrawal Agreement, confirming that the UK will leave the EU on 31 January 2020. This was the final legal step in the Brexit process. The UK left the EU at 11pm on 31 January UK time. From this date, the UK will enter a transition or implementation period lasting until 31 December 2020, during which it will remain fully obligated to comply with EU rules and laws. There is an option to extend the transition period, but this needs to be agreed by 30 June 2020.
Implications for Japanese Multinationals
The implications of Brexit for Japanese businesses operating in the UK and EU are wide-ranging and many companies have already acted to de-risk their supply chains, legal structures or regulatory affairs in the region. There are some businesses however who have held off acting due to the uncertainty of Brexit proceeding. Others have identified structural issues but have not remedied these due to the lack of certainty as to whether the steps required could be complete before a "Hard Brexit". The current period of 11 months "implementation/transition period" gives these businesses a window in which it is possible to act.