8 August 2016
Following the UK European referendum vote of 23 June 2016, a lot of individuals whose businesses and personal affairs connect them to the UK have posed questions on the practical and legal implications.
As a law firm working in both the UK and Bulgaria New Balkans Law Office organised an event on the consequences of Brexit and the potential effects it would have on the businesses operating in Bulgaria and the UK as these appeared in the days immediately following the vote.
Kamen Shoylev opened by discussing the avoidability and constitutionality of Brexit. The discussion centred around the possibility of the EU forcing the UK to trigger Article 50 and whether or not there is a chance for the UK not to start the process of leaving the Union despite the results of the referendum.
Speaking about the economic and financial risks for businesses, Kamen Shoylev and Irina Stoyanova warned that with the withdrawal of the UK from the EU, companies might be adversely affected by a number of tariff and non-tariff barriers which will complicate trade. Mr Shoylev went through the possible future scenarios of a customs union, common market in their full sense or a tailor-made arrangement between the UK and EU.
According to Mr Shoylev there won’t be any significant short-term implications for corporate structures in the UK, however in the long-term taxes might have to be raised so that the budget deficit created by Brexit could be filled.
Our experts reassured the business community, that Bulgaria will remain a member of the EU and it will continue to apply the Brussels Regime determining the applicable law when it comes to dispute resolution, even though the UK will no longer have to follow the Rome I and Rome II Regulations. So if the contract specified English applicable law, this will be accepted by Bulgarian courts, however ruling made by the English judicial system would have to go through a special process to be recognised by the Bulgarian system. Mr Shoylev explained that British courts have the practice of applying the agreed applicable law, so there would be no significant changes in dispute resolution in the UK.
According to our lawyers, the freedom of movement principle will most likely remain unchanged, but it will happen under conditions of registration and regulation, as in Switzerland. Our advice for EU individuals currently living in the UK would be to start the procedure to acquire permanent residence or citizenship as soon as possible.
Our seminar is available to watch in Bulgarian at our YouTube channel.
The seminar was covered by the local media in several languages, which you can find here:
Articles in English:
Articles in Bulgarian:
Articles in Russian:
The organisers wish to thank Intra Partners, a Sofia based accounting and finance consultancy, for its generous sponsorship.
Überbloc (a shari’a-compliant CEE investments advisory boutique)
We have advised Überbloc and indirectly certain of its clients (family offices and/or pension trustee professionals) on certain transactions our client was responsible for structuring. Our consultations focused on the creation of tax-efficient pension and non-pension related structures and on the corporate reorganisation of existing investments through Bulgarian companies.
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