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Setting up a subsidiary in the EU following Brexit

Alina Cincan – Inbox TranslationsFollowing the Brexit vote, business leaders around the UK have been looking for ways to continue trading uninterrupted – whether that is domestically or with EU nations.

In this series, we’re catching up with those who have made big decisions for the future of their business in a post-Brexit world. Here, Alina Cincan, managing director of translation service Inbox Translationtalks us through her choice to set up a subsidiary company in the EU.  

Creating an EU subsidiary

For Alina, setting up a subsidiary branch of her business in her home country of Romania meant that she could continue operating across the EU and in the UK with little to no friction. 

“Two years after the 2016 referendum, it was becoming clear that it would be a long time until an agreement would be reached,” Alina explained. 

“I decided that I needed a back-up plan [in case] working with clients in the EU became more difficult.” 

She went on to describe the main reasons behind her business decision. “The main reason why I decided to go down this route was the uncertainty,” she remembered.  

“Would there be new VAT rules? Would I still be able to trade frictionlessly with my EU clients? How difficult would it be to send interpreters across Europe? GDPR, employment, taxes… All these were creating extra worries, especially as no one knew what to expect.” 

Alina went on to add that being able to operate with as little friction as possible is key to her business.  “The UK company will continue to serve its UK clients, while the Romanian branch can serve EU clients,” she said of her business’ new procedures.  

“Had we waited for a final agreement, it would have been too late and probably affected our short-term operations.” 

Alina launched her Romanian subsidiary in 2018, and the company was able to reach profitability in 2019. Despite the setbacks of 2020, she says that the business continues to do well. 

“It’s too early to tell how good this decision was,” she said of her choice. “It created a lot of extra paperwork that I could have done without.” 

Alina also relayed the difficulties of setting up a business in another country, even if it is your own. “I had no experience running a business [in Romania], so complying with new rules and regulations in a country that isn’t particularly known for being entrepreneur-friendly wasn’t easy.” 

When it comes to giving advice to others who may find themselves in a similar situation, Alina suggested networking as an effective way to gain and share knowledge: 

“Join relevant professional associations, as they will provide you with invaluable advice, specifically tailored to your field.” 

“In my case, the Association of Translation Companies have been very good at explaining how the new VAT and GDPR rules apply, among other things.” 

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