UK startups concerned the country is about to leave the European Union in just a little over a months time with nothing agreed to ensure a smooth transition should point their eyes at this guide put together by startup policy advocacy group, Coadec.While a no deal brexit is still not inevitable the chances of it happening have stepped up sharply in recent months as the clock winds down towards exit day with no withdrawal agreement in place.
Such an outcome has major implications for technology businesses, given the cross-border nature of services startups tend to provide.With the UK potentially just over a month away from exiting the EU, no deal remains the default option, warns Coadec.
We are clear that no deal would be disastrous for the startup communitybut that doesnt mean that it wont happen.
Thats why we have teamed up with the UK Tech Cluster Group - Tech Nation to put together this guidance for the startup community.Under current prime minister, Boris Johnson, the UK government has sharply dialled up the brexit rhetoric.
Johnson has said in typical flashy fashion that hed rather be dead in a ditch than ask for an extension to the October 31st deadline for agreeing a deal with the European Union.He has also prorogued parliament illegally in an attempt to bypass parliamentary scrutiny, which he described in an internal memo as a rigmarole.The prorogation was quashed by the Supreme Court.
But since parliament resumed this week ministers have been refusing to clearly state whether the government will abide by a law it passed just before it got closed down which requires the PM to ask the EU for an extension if he fails to secure a withdrawal deal before October 19.Speculation is therefore rife over what political chicanery the government might seek to pull to wiggle out of complying with the law and crash the UK out regardless.Former UK prime minister, John Major, gave a speech this week warning that such a move would be unforgivable.
But there are no signs the government is rethinking its approach.Johnson has been splashing public money on an advertising campaign that instructs the country to Get ready for brexit (such as the billboard pictured above).
The government also claims to have substantially ramped up domestic preparations for a no deal exit.While its possible this loud show of bullying bravado is a theatrical tactic to try to pressure the EU into shifting position on contested brexit issues (primarily the Irish back-stop) so Johnson can grab a deal which could pass a vote in parliament its also possible the government isnt that interested in a deal, and just wants to deliver brexit do or die, as the PM has also put it.Even if its theatrics it doesnt mean the whole high stakes game of chicken might not backfire resulting in the UK actually crashing out with nothing on Halloween.The only robust legal certainty is that without an extension to Article 50 the UK will indeed leave the EU on October 31, deal or no deal.Given rising political turmoil in the UK combined with a hard and fast-approaching brexit deadline, startups are well advised to prepare for the worst which means leaving the EU with no contingencies in place beyond those youve put in place yourself.Coadecs guide presents a concise overview of ten issues the policy advocacy group believes should be front of mind for startups and scaleups thinking about how to manage no deal risk.The guide does not (and is not intended) to replace professional legal advice but it does cuts through a lot of the noise and fuzz around brexit so its well worth a read, especially if youre trying to get up to speed fast.Top of their list is data flows a major consideration for tech businesses that receive personal data from the EU or EEA.Startups will need to create contract-based legal structures to replace the free flows of data we took for granted under the European system, Coadec writes, noting that the UKs data protection agency is advising startups to look at model clauses, binding corporate rules, codes of conduct or certification mechanisms as alternatives for their data flows.These complicated legal structures have typically been the preserve of larger businesses and corporations, not startups and scaleups so will take time to put in place, it warns.
If you havent started preparations for your post-brexit data flows, they should be a priority now.Other issues the guide deals with include immigration - visas; taxation - VAT; and the impact of a no deal on specific pieces of EU legislation and strategy that are relevant to startups such as the e-Commerce Directive and Digital Single Market as well as related pieces of legislation (such as ePrivacy) that risk being caught in limbo by brexit as theyve not yet been passed.Theres also advice for startups that have .eu domain names, and for those whove received funding from the EUs Horizon 2020 R-D fund, as well as links to relevant government resources.The guide can be downloaded as a PDF here.How is your startup preparing for brexit? Whats your biggest no deal concern? How much is it costing you to manage brexit risk? Let us know by emailing tips@techcrunch.com