June 23rd 2016 - The UK referendum on leaving the European Union, the result shocking the rest of Europe and the World and sending markets in turmoil. Then on November 8th, 2016, the world was stunned to learn Donald Trump was going to be the next President of the United States of America. Both results were unexpected and the consequences will change the world as we know it.
The UK Prime Minister Teresa May has now triggered Article 50 to leave the European Union and the Brexiteer's rejoice with cries of freedom and gaining "our country back". Whether you agree or don't agree with Brexit one thing is for sure, there is great uncertainty in the markets and this will be the case for the next two to three years. Coupled with Donald Trump as President of the USA with his intention to put “America first” and Asia’s focus on trade liberalisation and globalisation will have a dramatic impact on trade for years to come. Ayhan Kose the World Bank’s director for development prospects says “Because of the outsized role the United States plays in the world economy, changes in policy direction may have global ripple effects. More expansionary US fiscal policies could lead to stronger growth in the United States and abroad over the near-term, but changes to trade or other policies could offset those gains.”
So what's the effect of these two results on business in Spain? To be honest we saw deals collapse on the referendum result as the initial shock and uncertainty was too much for clients to comprehend when they were about to sever ties with the UK and purchase a business in Spain, and we totally understand this. Enquiry levels dropped and as a business we saw levels drop to the recession days again, all very worrying. However there seems to be a silver lining which is very interesting. We are receiving numerous enquiries from the USA, we always have but not in the numbers we have seen recently, and speaking to clients the reason is the "Trump effect". The clients we have spoken to don't want to be a part of Trump's new America and they are looking for a safe alternative in Spain. The UK market for us seems to have levelled and we are sure on one of the reasons for this is weak Sterling, clients are waiting for a better exchange rate. However we strongly believe that there will be a "Brexit effect" and people will want to move away from the UK and come to Spain to start a new life and hopefully be a European citizen.
The world is changing and this offers new challenges to businesses and we must grasp these and turn negatives into positives.
Most people don't seem to realise there are better deals to be had when dealing in foreign exchange. The majority of people go to their bank simply because they haven't researched alternatives or because they like to be in their comfort zone and probably don't like change. This is a strange conundrum for me because we deal with people who are changing their lives and have just ultimately made their biggest decision of their lives to emigrate to a new country and start a new life. Then why after making this decision go back to being "comfortable" with their own bank when their are better options for foreign exchange? Strange don't you think.....?
With Sterling under pressure after Brexit it matters more than ever to get the best exchange rate possible and your bank isn't the place to get it.
Here at Business Broker Spain we recommend Infinity International for your currency needs, with over 9 years experience they are fully regulated and have 9 offices in 4 countries they not only offer a personal service but will offer you a better rate than your "comfortable bank!" The managers of Infinity International will help you with setting up a bank account here in Spain and because they have 1000's of clients they can get you fantastic deals with the bank, for example no charges and no set up fees.
When I moved to Spain many years ago I never had the luxury of this service and I have to tell you it cost me a lot of money! Our advice is listen to people who have been there and done it, and as our client we would only recommend services that we know will look after you and help you in every step of the way in your big move. So take our advice and contact Infinity International for an impartial chat and see how they can help you save money and beat the "comfortable bank!"
Business Broker Spain and everyone associated with our business has worked incredibly hard over the years to become the leading business brokers in Spain, we have experienced the boom and we have seen the harsh realities of a crippling recession that gripped the whole world.
I think Business Broker Spain can speak for the majority of expat business owners here in Spain and probably in the whole of Europe of our shock at the result of the referendum on the 24th June. Things have changed and not for the better, we have seen Sterling hit a 31 year low against the Dollar and we have seen Sterling drop over 8% against the Euro.
80% of our clients purchasing businesses here in Spain are from the UK and we are bracing ourselves for what are now very uncertain times after what was our best 6 months of trading on record, confidence had returned to the market, businesses were selling at rate seen in the boom of 2005/2006.
Confidence plays a massive part in any life changing purchase and non more so than deciding to emigrate to another country and purchase a business, and we only hope this is quickly restored to levels pre-Brexit.
I for one class myself as European and my family are happy and settled in Spain with the Spanish people welcoming us into their community, it's been a positive and life changing experience and one I wouldn't change for anything. My daughter attends Spanish school, speaks three languages fluently at 10 years old, and we want her to grow up in a free Europe where cultures can mix and learn from each other and our only hope is that somehow Brexit will not deny other young people this fabulous opportunity.
Our advice for anyone contemplating the move to Spain and purchasing a business to continue with your dream, follow it and achieve it and we will help you every step of the way. It won't be easy, we all know that but the rewards are there to be achieved, plan carefully and please do contact us for any advice. There is life after Brexit, there has to be!
Business Broker Spain