Launching in the UK: What the NZ-UK FTA means for businesses and what to know before you go
Given that the NZ-UK Free Trade Agreement (FTA) is on its way to soon being ratified, leaders from the NZ and UK governments are putting plans in place to ensure that both countries mutually benefit from the agreement. While there isn’t yet a date set in stone for when the NZ-UK FTA will fully come into effect, both countries are committed to delivering the best possible outcome for each country to further strengthen trade ties.
So, what exactly is the NZ-UK FTA?
Essentially, it’s an agreement that will help to remove trade tariffs on a wealth of goods from NZ that are going into the UK. It is anticipated that this removal of tariffs will help to grow trade, while also levelling the playing field for NZ business that are looking to launch into UK market. This is great news for the many businesses in NZ that might not have otherwise considered the UK due to the high costs of doing so, which is incredibly important given that NZ’s economy is very dependent on trade.
Under the new deal, tariffs on 97% of New Zealand’s existing exports to the UK will be eliminated. Many of the key exports that NZ is importing into the UK are from primary producers for the food and drink sectors, such as wine and fruit. There is also a demand for sustainable products with strong environmental credentials (something that NZ is well known for producing) and technology is also a growing sector, with key with companies like Microsoft recently setting up cloud businesses in NZ.
Throughout 2022 New Zealand’s Prime Minister Jacinda Ardern, has been on a ‘cheerleading mission’ to promote NZ trade, with five missions to key markets – two of which were in the UK. Jacinda was proud of the fact that the NZ-UK FTA was one of the ‘fastest negotiations in over a decade’, which showcases the importance that both governments place on the agreement. Jacinda sees trade as a ‘force for good’, that helps to ‘promote labour rights, climate action, environmental reform and economic empowerment.’
Why businesses/founders should launch in the UK market
There is a wealth of reasons why the UK is a great place to do business, but here are our top five:
- Ease of doing business
It’s relatively easy to do business in the UK thanks to well established systems that are in place to ensure that business transactions can easily be executed.
- Same language
This seems an obvious one, but it is easy to communicate given that there isn’t a language barrier. That being said, ensure that you avoid jargon, which could potentially be misunderstood in a different market!
- Scale/size of the market
The UK market is large (it’s the 6th largest economy in the world) and with that comes a wealth of opportunities for businesses – especially for those in the FMCG, Finance and Tech sectors. The UK tech industry is valued at £764 billion, and the sector is strong across the UK, not just in London. In the past four years, NZTE has seen a fourfold increase in tech companies from banking, accounting, and advertising sectors to name a few. Combine these factors with a fast-growing population that has many of the same societal issues and needs for products and services as those found in NZ, and you’re on to a winner.
- The UK is one of the leading fintech hubs in the world
The UK is a great place to do business for both fintech start-ups and established fintech businesses, which are looking to make their mark in the UK.
- The UK is surrounded by other large economies of the world
Europe is very easy to get to, which is great for businesses who wish to do business in both the UK and Europe.
What things should one consider before launching in the UK? Here are our top tips to know before you go!
As an agency with both UK and NZ offices specialising in market entry PR, businesses that are looking to launch in the UK market often come to us seeking advice to ensure that their market launch is as successful as possible. While the UK market is an exciting place to do business, it’s crucial that businesses do their homework before they go to avoid any unnecessary pitfalls.
We recently attended two events focusing on this very topic – one hosted by Tribe Global and another hosted by our friends at NZTE, both of which provided great insights, which we’ve distilled into key points to help those who are considering launching their business in the UK.
Key considerations for businesses thinking about launching in the UK
- Immigration – What visas will you need to set up in the UK?
- Laws/ Regulations – Ensure that you’re up to speed on all regulations to avoid any potential issues, and if you’re not sure, seek legal advice.
- Establishing an entity in the UK– It’s important to register your business in the UK so that you have everything in place before you start trading.
- Trademarks/ IP – Protect your IP and patents before you start attending trade shows, exhibitions, or events. Great ideas are easily stolen if they’re not protected!
- Banking – Having a UK bank account is essential for doing business in the UK. Ensure you allow enough time for this process. It’s worth flagging that this can take anywhere from 6-9 months, something that many people are often unaware of.
Key challenges of doing business in the UK
- Distance – The UK is a loooong flight from NZ. Because of this, we are quite often employed by companies ahead of their UK landing to help them gather useful market intelligence. This could be anything from visiting trade/consumer shows (to suss out competitor activity or to find relevant connections), reaching out to potential partners, identifying opinion formers, or undergoing media or competitor analysis. By being armed with this information, you will be able to better understand the market and use this to inform your launch strategy.
- Time difference – Unfortunately there’s no way around this one! Depending on the time of the year, there is a time difference of 11-13 hours between the UK and NZ, which means that there’s only a small window of opportunity to talk to your oversees customers or employees.
- Access to talent is challenging – Think about who you need on the ground and what you need that person to achieve. Who is best placed within your organisation or who do you need to recruit to drive international expansion?
- You must be committed to the cause – Think of a UK launch as a new start up. When you expand into another country be prepared to hustle and think of it as starting up again – but in a country that you’re not familiar with – it’s a big decision, don’t think of it as an ‘add on.’ One of our former clients, Krister Kristiansen of gamified simulation training company Attensi, shared his advice for those who are thinking about making the leap to launch in the UK: ‘Always lean forwards: embrace the challenge.’ Even if things look uncertain, opportunities may arise. You can read the full article here: https://www.rochesterprgroup.com/home/always-lean-forwards-embrace-the-challenge/.
- Not everyone will understand what it is that you provide – When entering a new market explain in clear detail what you do. Don’t assume that those who are unfamiliar with your offering will understand your market / your product without spelling it out for them!
- Many businesses are unfamiliar with the UK media landscape – The UK has some of the most cynical media in the world, so it’s worth seeking a well-connected local communications agency that can help you to craft your messages to ensure that they’ll resonate with media, while also being seen and getting heard by your key target audiences.
We obviously recommend this approach, not just because it’s work for us, but because it’s best when founders / CEOs have time to focus on what they do best – running and growing a businesses. If you don’t have the budget to outsource PR, ensure that you read the UK media, get to know what issues matter to them, and find out which journalists cover the topics that are most relevant to your business.