Brexit is having an effect on international FinTech firms in the U.K. Singapore firm WB21 Pte is taking its operations from its head office in London to Berlin and is citing Britain’s decision to leave the EU as the clincher in its decision to relocate, according to The Wall Street Journal.
WB21 Pte Chief Executive Michael Gastauer said that uncertainty surrounding the legal implications of remaining in the U.K. was the main factor. “Brexit was decisive for us. We had initially planned to operate our European business out of London, but the decision means we lack legal certainty there.”
WB21 is a payments solutions provider and launched in 2015. It would have provided 200 new jobs in London, but these will now be offered in Berlin. Out of 25 employees currently located in London, 20 of those positions will be in Germany. The company, which is based in Singapore, conducts cross-border payments, account services and money transfers for 1 million customers with transaction volume of $5.2 billion.
Companies operating in the U.K. are permitted to relocate to Europe to continue to have access to the EU single market, and cities such as Dublin, Frankfurt and Paris are courting firms. KPMG estimated that 75 percent of U.K. firms will move operations from the U.K. to Europe.
From the outset, Berlin focused on startups in London, and the economics ministry set up an office to contact and lobby companies in London immediately after the Brexit vote.
Six other companies will relocate to Berlin, including BrickVest Ltd, web design company MBJ London Ltd. and Swissbank Ltd. Talks are ongoing with another 40 companies about possible relocation. So far, however, many firms are delaying a decision and awaiting the outcome of negotiations between the U.K. and the EU. Those negotiations have not yet started, but subjects to be addressed are trade, taxation, labor laws and infrastructure.