Doing Business with United Kingdom
|Religion||Christians (59.5%) Atheists (25.7%) Muslims (4.4%)|
|State system||Constitutional monarchy|
|Head of State||The Queen Elizabeth II.|
|Head of government||Boris Johnson|
|Currency name||Pound (GBP)|
|Time shift||+1 hour|
|Nominal GDP (billion USD)||3,370.50|
|Economic growth (%)||7.5|
The United Kingdom (UK) is a constitutional monarchy with a bicameral Parliament; Lower House (House of Commons), Upper House (House of Lords). Executive power belongs to the government headed by the prime minister, who is usually the leader of the strongest parliamentary party. The head of state has been Queen Elizabeth II since 1952, who is also the formal head of government and justice, head of the Church of England and commander-in-chief of all the armed forces of the United Kingdom. The United Kingdom consists of four constituent countries – England, Northern Ireland, Scotland and Wales.
The UK is a developed country that combines a respect for traditions (including industrial ones) with a broad focus on cutting-edge technology, research and development.
British universities are the only ones from Europe to qualify for the TOP 10 universities in the world in terms of research.
The United Kingdom left the EU on 31/01/2020 after 47 years of membership, and after a one-year transition period it is definitively out of the EU single market from 01/01/2021. Britain is officially a third country, which means, among other things, more administration, thorough border controls and the need for new certifications for both parties. The big change for EU citizens is the new immigration rules, the year 2021 ended the free movement of people with the United Kingdom.
The UK economy is the fifth largest in the world. Services account for more than 40% of total exports and 80% of GDP. GDP increased by 7.5% in 2021 after several lockdowns in 2020 and early 2021, leaving the UK at the end of 2021 0.4% below 2019 levels, the fourth highest among the G7. During 2022, UK GDP is expected to grow by 3.8% a year and by a further 1.8% in 2023. Unemployment has remained low in recent years, with a trend towards a record number of job vacancies. The combination of Brexit, the pandemic and the disruption of the energy market due to the Russian invasion of Ukraine is driving inflation to a 30-year high of 7%. By the end of 2022, inflation is expected to reach around 10%.
Relations between the Czech Republic and the United Kingdom have long enjoyed an excellent level. Diplomatic relations between the countries were established immediately after the creation of the independent Czech Republic in 1993. The high level of relations stems from the tradition of good ties between Czechoslovakia and the United Kingdom in history, whether after the creation of the Czechoslovakia in 1918, during the Second World War or after 1989. The Czech Republic and the United Kingdom cooperate not only in the political-economic field, but also in the social, cultural and scientific-educational sphere. The countries have similar views on a number of topics in foreign policy and world security. Cooperation deepened especially after the Czech Republic joined NATO and in connection with the acquisition of full membership in the EU. Opportunities for Czech companies are found mainly in the field of digital services, engineering, construction and infrastructure projects, energy, healthcare and defense technologies. For more, see section Perspective Fields (MOP).
Practical telephone numbers (emergency services, police, firemen, information lines, etc.)
Police, fire, first aid: 999
Information on telephone numbers: 118118, 118120, 118500
You can find important phone numbers at: https://www.yell.com (similar to the Czech Zlaty sánek)
Important web links and contacts
- UK Parliament
- Prime Minister’s Office
- Scottish Parliament
- Welsh Assembly
- Northern Ireland Assembly
- Ministry of Foreign Affairs and International Development
- Ministry of International Trade
- Ministry of Economy, Energy and Industrial Strategy
- Ministry of Finance
- Ministry of Transportation
- Ministry of Environment, Food and Rural Affairs
Economy and Trade:
- The Office for National Statistics
- Competition and Markets Authority
- UK Intellectual Property Office
- HM Revenue & Customs
- UK Trade & Investment
- Commercial register of companies in the UK
- Commercial register of companies in Northern Ireland
- Financial Conduct Authority
- Czech British Chamber of Commerce in London
- Bank of England (Central Bank)
- London Stock Exchange
- Confederation of British Industry
- A list of about 390 mostly business associations
- A list of about 280 mostly business associations
- British Business Directory
- Directory of sales representatives in the UK and Ireland
- British Chambers of Commerce
- Information on the financial situation of British companies
- Business support helplines
- Government website with information on Brexit
The Ten Commandments for Trading with Great Britain
The PaulSourcing agency has prepared ten recommendations for doing business with Great Britain for Czech entrepreneurs interested in business relations with Great Britain. In 2020, it was supplemented with 4 current tips.
4 recommendations for entering the UK market during the coronavirus pandemic:
- Market research The UK market is very saturated and without a clear factor differentiating your business or product from the competition it is difficult to stand out. A Unique Selling Point (USP) can be the innovative nature of the product, the materials used, but also branding, quality and pricing strategy. All the mentioned aspects are always reflected in the number of reactions of potential partners after the initial approach.Your cash flow – and securing business is directly related to the extreme competitiveness of the market – so if you don’t have something completely unique, which is in high demand, then expect a longer maturity of your invoices. The argument that you operate only on prepayment in the Czech Republic or Germany will not interest anyone in Britain. So think about securing your business (insurance, bank, lawyers…)Competition is very strong in the country and in some sectors it limits the vitality of entering the market. PaulSourcing’s foreign office in London (ZK London) strongly recommends that you do a preliminary market mapping before making a decision related to expansion, which should be part of your business plan. The London office can assist you with this step. He has extensive experience in many sectors and can identify any potential.
- Entering the British market The British market is very specific and knowledge of the language alone does not make a company a natural candidate for expansion. It is necessary to be fully aware of the demands of market service, competitiveness and above all the compatibility of the product / service with the demands of local customers. Don’t make a decision based on your language skills alone. This is only a necessary prerequisite.References are absolutely key to a successful start in highly conservative Britain. From the experience of ZK London, companies with existing references directly from Great Britain find further expansion many times easier. References from customers outside the UK are of course also highly valued (ZK London recommends the USA, Scandinavia, Benelux, Germany), but they do not carry such weight. Surprisingly, even references from Czech branches of global companies are often not extremely relevant for the British.Expansion into a new market the size of Britain should resonate with the firm’s broader strategy and a specific entry tactic should be determined. It is ideal to draw up a separate business plan, which will contain individual steps in expansion, costs for entering the market and expected turnover and projections for the next few years. It is important to determine what part of the company’s total turnover Britain will make up. Expansion tactics are then based on this, e.g. the decision to grant exclusivity to distributors. In negotiations, the absence of a vision can be a key sign of a company’s unpreparedness.Due to the size of the local market and purchasing power, the country offers great potential. However, the costs associated with expansion are also significant. The company should take into account the expenses associated with establishing the first contacts through personal meetings and participation in trade fairs. The vast majority of business activity cannot do without personal contact. This is somewhat complicated by the current situation associated with the coronavirus, but at least an online conference call with a possible personal follow-up meeting is still a matter of course.Following the importance of personal contact, it is definitely an ideal situation to have a sales representative directly in the country. Of course, this is unfeasible for many companies. In that case, it is necessary to have a person within the organization who is actively dedicated to Britain as part of a wider territory (e.g. Western Europe), or ideally as a separate market. Flexibility and a willingness to be active in the country are key. Nothing can replace continuous networking and personal creation of relevant contacts.
- Logistics costs and Brexit
At the moment, Britain is in a so-called transition period, which in practice means trade with the EU unchanged. However, this may change at the end of the year, and one of the real possibilities is still Britain leaving without a trade agreement with the EU. In this case, it is necessary to take into account a potentially significant increase in the cost of transporting goods. This primarily concerns the payment of import duty and the administrative tasks associated with it. What types of goods will be subject to customs duties and what their amount will be is uncertain in the current situation. However, potential importers should definitely consider this item as one of the variables and closely monitor the progress of negotiations. Jaguar Land Rover, for example, expects a no-deal Brexit to increase its costs by £500m a year just on importing parts from the EU.
- Initial outreach If you have thoroughly considered all the pros and cons resulting from the previous information and your company is in good shape for entering Britain, all that remains is to start the initial outreach to potential partners. Contacts to relevant people are the key to opening more advanced negotiations, and mass appeals to generic email contacts are usually ineffective. ZK London can significantly help you with this. It owns an extensive database of contacts across disciplines, which it constantly adds to. It can also help with the very formulation of the approach and the strategy of finding new contacts.It is extremely important not to underestimate the preparation of marketing materials. The requirements for a high-quality presentation of the company are extremely high in Britain, and amateurishly prepared marketing materials can very easily discourage a potential partner from any cooperation. A solid foundation is a high-quality and readable website design in English and a professionally prepared PDF presentation with a brief description of the service / product. The presentation should be concise and avoid the frequent mistake of excessive text. Graphics and visual communication will in most cases say more than a few paragraphs of text. Grammatical and syntax errors must be avoided. ZK London strongly recommends hiring an experienced English copywriter to write the text.
The Ten Commandments for Trading with Great Britain
- Have a clear vision Your communication and marketing strategy must reflect your clear vision.
- Invest in marketing Your website should be clear, graphically interesting and simple. It is ideal to create sites specific to the UK market only with a.com or.co.uk ending. Take the same approach to promotional materials and don’t forget social media. Materials can be playful and inventive, but at the same time they should appear understated. Definitely avoid, for example, scantily clad models or titillating images, even if they are related to the product.
- Pay attention to your appearance In Britain it is absolutely obvious to come to a meeting formally and elegantly dressed, do not underestimate the choice of shoes, which must be clean and classic styles at all times. Gentlemen, get a quality and well-fitting suit with a nice tie, ladies, opt for a decent dress or a business suit. If possible, buy clothes in higher price categories, but do not experiment and stick to the classics.
- Prepare well for the meeting On the islands, more than elsewhere, time is considered very expensive, so when a British subject finds it on you, it means they are interested. Therefore, go to meetings perfectly prepared, both in terms of business and technology. Larger British companies, in particular, come to meetings usually accompanied by a technical worker. We would also recommend this model to the Czech side.
- Act in the British spirit Always come to the meeting a little early and start the meeting informally with a few light-hearted and funny sentences, for example about the way to the place, traffic or the weather. After the meeting, definitely write a quick follow-up e-mail with thanks, a summary of the agreed steps and their subsequent fulfillment.
- Avoid certain topics Avoid politics, minority issues and partner relationships.
- Time is money The negotiation itself is very specific and direct and, in addition to the specific features of your products/services, it will also touch on specific business conditions, including price. In this area, we recommend being as informative as possible, open and in no case exaggerating the margins above the usual level. British decision-making partners usually have a very good overview of cost items and your credibility may be lost.
- Always keep in mind that you are in a monarchy, the United Kingdom is a union of the English, Scots, Welsh and Irish, so always find out your partner’s nationality in advance and address them accordingly. In recent times, national passions have been evident in the United Kingdom – see the recent referendum on Scottish independence.
- Well-prepared materials are the foundation When preparing marketing materials, keep three key points in mind – good English, not overloaded with information, imaginative but simple design. Your corporate materials represent you, so avoid grammatical errors, long texts and an unprofessional appearance.
- Get advice Can’t figure out a problem? Don’t take risks, seek out experts. The first door to knock on is PaulSourcing.