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Seminar: “Best Practices for Spanish companies doing business in / with the UK” III Edition Kindly sponsored by: In collaboration with
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Seminar:
“Best Practices for Spanish companies
doing business in / with the UK”
III Edition
Kindly sponsored by:
In collaboration with
In collaboration with
09:00 – 09:05 Welcome London & Partners
09:05 – 09:15 Organisers’ Presentation Teresa Gonzalez
Silvia Estivill Tarragó
Carolina Arriagada Peters
09:15 – 09:45 Accountancy: Don’t get in Trouble with the Tax Man Steven Bruck
Blick Rothenberg
09:45 – 10:15 Legal: You Need a Lawyer Philip Shepherd
Taylor Wessing
10:15 – 10:45 Recruitment: ‘’People Power’’ - Attracting Local Talent James Webb
Propel London
10:45 –11:15 Coffee break
11:15 – 11:45 Foreign Exchange: Minimising Exchange Risk Iciar Vaquero
Ebury Partners
11:45 – 12:15 The Property Market: Location, Location, Location Iain Mulvey
GVA
12:15 – 12:45 Interim Management: No Space for Mistakes Nigel Taylor
Interim Management
Answers
13:00 – 14:00 Networking lunch
SERVICES
Information about Setting Up a Business in the UK X X X
Information about Investment Opportunities X
X
Information about Available Subsidies X X
Market Research Studies X X
Databases X X
Commercial Agendas X X
Outward/Inward Trade Missions X X
Networking Activities X X X
Office Space X X X
Bespoke Events X X
Participation in Trade Fairs and Exhibitions X
Spanish Embassy Teresa Martinez Gonzalez [email protected] Tel: +44 (0)20 7467 2330
London & Partners Carolina Arriagada Peters [email protected] Tel: +44 (0) 207 7185417
Spanish Chamber of Commerce Silvia Estivil Tarrago [email protected] Tel: +44 (0) 207 0099 071
www.londonandpartners.com/bestpracticeseminar
Seminar:
“Best Practices for Spanish companies
doing business in / with the UK”
III Edition
Kindly sponsored by:
In collaboration with
Blick Rothenberg
Welcome to London!
Don’t get into trouble with the Tax man!
Steven Bruck
19 January 2012
Typical Scenarios
• Spanish business selling into UK
• Somebody in the UK researching the market (early stages)
• Local representative talking to prospective customers –
chasing orders – taking orders
• Local sales/distribution office – full scale support, maybe
extending to servicing
• Local manufacture/design & build
At each stage – think UK tax
What/which taxes?
• VAT
• Employee PAYE/NIC
• Corporate taxes
VAT – Spanish business selling to UK
Simple Case: Supply of goods from Spain directly to
UK business customer
General rule: No UK VAT registration needed
UK business customer should account for
VAT under EU acquisition (reverse charge) rules
(and no other tax implications)
Note: Spanish business selling services to UK
personal consumer; Spanish VAT will normally
apply
VAT…continued….COMPLICATIONS
• Delivery made from UK stockholding;
Currently VAT registration needed only if turnover exceeds
£73,000 (in 12 month consecutive period)
• Delivery from Spain to UK consumer (not business);
Currently UK VAT registration required if turnover exceeds
£73,000 (in calendar year)
But from 1 April 2012 “non UK established businesses” will (it is expected)
lose the £73,000 threshold exemptions of the above cases. Detailed rules are
awaited. (Blame the EU!)
• Services supplied to UK business customer from Spain;
No UK VAT registration required for most services (reverse
charge by customer), but check exceptions to basic rules
VAT….continued
• So a Spanish business selling products to the UK may need
UK VAT registration. Indeed from 1 April 2012 much more
likely.
• UK VAT follows EU law (should be familiar)
• VAT registration does not necessarily create a “permanent
establishment”
• VAT registration separate from corporate taxes
Now you have an employee
Let us move now to a situation where you have a person or
people in the UK.
Let’s talk about employee taxes: PAYE
And National Insurance Contributions: NIC
Employee Taxes
Pay As You Earn = PAYE & NIC
• UK has system of withholding income tax and national
insurance (social security) contributions (“NIC”) from
employee salaries
• Paid over monthly by employer, with employers’ NIC, to
Her Majesty’s Revenue & Customs (“HMRC”)
• So if you have an employee you must think about PAYE and
NIC
• Form A1 can exempt employee and employer from UK NIC
(EU nationals)
Employee Taxes….continued
General rule:
• In general PAYE/NIC deductions and payments are needed
for all employees
• Heavy potential penalties for non compliance
• Payment of benefits/expenses strictly controlled
Employee Taxes….continued
Exceptions:
1. One employee…no “place of business”;
• If employee is resident in UK, then taxable on employment
income – BUT, if no place of business or “host” company, no
PAYE requirement, (taxable under self assessment)
• Be careful – take advice; don’t assume this applies once you
are seeking/taking orders
Employee Taxes….continued
Exceptions:
2. Self employed personnel
• HMRC require strict evidence of self employed status, which
can often be challenged
• Level of control, existence of other clients, detailed terms of
contract – all crucial
• Not an easily obtained option
Employee Taxes….continued
Exceptions – a warning
• Please take advice if you wish to take advantage of exceptions
• The potential penalties for omissions (even innocent) can be high
• “Benefits” and expense payments are carefully monitored by
HMRC (annual “P11D” return required) – and benefits are taxable
• Forms 42 – where shares issued to directors or employees
But good news…
• Potential favourable treatment for expats (detached duty relief and
forms A1)
Employee Taxes etc. - Rates
Income tax 2011/12 2012/13
Tax free £7,475 £8,105
£1 - £35,000 20% 20% £1 - £34,370
£35,001 - £150,000 40% 40% £34,371 - £150,000
Over £150,000 50% 50% Over £150,000
NIC: weekly Employee Employer
Up to £139/£136 Nil Nil
£139/£136 - £817 12% 13.8%
£817 + 2% 13.8%
Employee Taxes.... above all
• Don’t assume “I’m paid in Spain under Spanish contract so
UK PAYE is irrelevant”
• It’s not that simple!
You have a UK presence – What about Corporate Taxes
Normal alternative structures;
1) UK Limited Company (a subsidiary or personally owned)
2) Spanish company with a UK “permanent establishment”
(including a branch)
General Rule – UK Corporate Taxation
1) UK Limited company:
• Subject to UK tax
• Unless; “Non-Resident” = managed and controlled outside
UK (Spain OK)
• Non residency must be demonstrated/agreed
General Rule – UK Corporate Taxation
2) Overseas company or business
• Subject to UK tax if either
a) “Resident” = managed and controlled in UK, or
b) Has a “Permanent Establishment” in the UK
• So what is a “Permanent Establishment”?
What is a Permanent Place of Business?
“A Permanent Establishment is a fixed place of business”
• Fixed place – can be a home
• Business – what is business?
• “If it looks like a duck and quacks like a duck, it probably is a
duck!”
What is “business”?
• Spanish business selling into the UK
- No -
• One person in UK solely researching the market
- No -
• One person in UK talking to customers, promoting orders
- Yes – But perhaps a grey area
• Local sales/distribution office
- Yes -
• Local manufacture/design & build
- Yes -
What is business?
• So, as you move from pure market research to actively
developing business in the UK (even without a Ltd)
remember you may have a “permanent establishment” – you
may be subject to UK corporate tax
• This is not a matter for election/choice. Take advice
• 12 month rule for construction/installation contractors
How much profit must be shown/taxed?
• Even for a UK Limited company, taxable profits are not
necessarily accounting profits
• Arms length principle crucial – unless exempt
• If applicable - taxable profit is the profit which would arise in
an equivalent independent third party entity
Arms Length principle
Depends on:
• Extent and nature of activity
• Level of risk
• Overall profitability of enterprise
Burden of proof is on taxpayer
Arms Length principle – how is profit calculated?
• Minimal commercial risk; introducing customers;
contracts signed in Spain;
• Potentially cost plus
• Contracts signed in UK; bad debt risk; perhaps
stockholding risk; potential trading losses;
• Gross margin on an arms length commercial basis
Arms Length Principle - Exemptions
The good news
• World-wide groups which are small are normally exempt
• Small: Maximum of 50 staff and either;
Group turnover less than €10m, or,
Gross balance sheet assets less than €10m
• There are also medium sized group relaxations; this gets
more complicated – take advice
Corporation Tax Rates
2011/12
Up to £300,000* 20%
£300,000 - £1.5m 27.5%
£1.5m* + 26%
Note: The full rate of UK corporate tax is subsequently due
to decrease by 1% each year until 1 April 2014 when it will
be 23%
* £300,000/£1,500,000 divided by number of companies
under common control
Taxable profits
• Taxable profit requires adjustment to accounting profit
e.g: Capital allowances v depreciation
General provisions
Entertaining expenditure
• But that’s for another conference
Conclusion
• The UK is still a good place to do business
• But as you move through the various stages of establishing
a business in the UK – be alert
12 York Gate, Regent’s Park, London NW1 4QS, United Kingdom
Telephone: +44 (0)20 7486 0111, Fax: +44 (0)20 7935 6852
Contact us
Steven Bruck
Tel: +44(0)20 7544 8970
Email: [email protected]
Seminar:
“Best Practices for Spanish companies
doing business in / with the UK”
III Edition
Kindly sponsored by:
In collaboration with
19 January 2012
You need a lawyer!
Key legal issues for Spanish companies doing business
with and in London
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Philip Shepherd
Taylor Wessing’s legal services to Spanish companies
setting up and doing business in the UK include…
> Free of charge, free of obligation initial
calls and meetings
> Fixed fees
> Co-ordinated advice from the leading law
firm for investment and start-ups in the UK
> UK team of over 40 lawyers dedicated to
helping overseas companies setting up
and doing business in the UK
> Offices in Central London and Tech City
London and the UK – a great place
to do business
> Ease and cost of establishment
> Capital and funding, capital markets
> Entrepreneurial and Tech clusters (Tech City, London)
> Relatively light employment regulation
> Legal system
> Professional services
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International Expansion
>Risks
- More risks (some bear traps…)
- More risks means more cost, probably less profit?
>Reducing the risks
- Increase the profit by reducing the risks
- It’s easy and inexpensive to address the risks in the
UK (you need a lawyer…)
- This is an opportunity…
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“Best Practice Seminar for Spanish Companies Doing
Business with or in the UK”
> Doing business with the UK…
- Selling into the UK directly from Spain
- Selling in the UK via agents, distributors or partners
> Doing business in the UK…
- Establishing a presence here (i.e. hiring employees in
the UK or sending employees to work in the UK)
Doing business with the UK > Contracts and terms of sale
- Differences between Spain and the UK
Remember it is different – local law may override
Choice of law and jurisdiction and style of document – customer preference (culture and language)
Consumer laws (eg cookies and cooling off periods)
- Typical mistakes
No English law review, parts of contract unenforceable = liability
No contract at all…
- Principles
Remember it is different and take local law advice
Generally “what you see is what you get” but there are exceptions
Costs versus risk
- Costs and timing
Inexpensive and quick
Doing business with the UK
> Intellectual Property
- UK IP protection
do you have a UK trade mark?
local non-disclosure agreements?
other IP?
- Typical Mistakes
No local protection in the UK
Contractors own the IP
- Principles
Remember it is different and take
local law advice
English law contracts and non-
disclosure agreements needed
- Costs and timing
Inexpensive and quick
Doing Business in the UK: setting up and growing
>Entity and method of trading
>Employees
>Regulation (including data
protection and the Bribery Act)
>Real Estate
> Intellectual Property
>Contracts
>Others
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Doing business in the UK: Entity
UK Entity
> General principal: if you have employees in the UK you need a local entity
- company law
- tax planning
- commercial advantage
> UK subsidiary (private limited company)
- the most popular with overseas companies setting up in the UK
- very quick, cheap and easy to set up
- customer advantage?
> UK establishment of the Spanish company
- a “lighter” form of entity
- quicker to close and (sometimes) less expensive to operate
- customer disadvantage?
Doing business in the UK: People
> Employment law – it is different
> Some points to watch out for:
- Contractors (can be dangerous)
- Employee Shares
- Immigration
- Acquired Rights Directive applies
(known as TUPE)
> Employment documents
- You need local English law documents
to protect the company. For example:
contracts, offer letters, confidentiality
and IP Protection agreements
employee handbook (note: Bribery Act
compliant)
Summary: Yes, you need a lawyer but it is easy to do
business with and in London.
“Dedicated to inward investment…
great quality and responsiveness
and at reasonable fees”
Taylor Wessing LLP
Client
Philip Shepherd
Tel +44 (0)20 7300 4655
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© Taylor Wessing 2011
This publication is intended for general public guidance and to highlight issues. It is not intended to apply to specific ci rcumstances or to constitute legal advice.
Taylor Wessing’s international offices operate as one firm but are established as distinct legal entities.
For further information about our offices and the regulatory regimes that apply to them, please refer to www.taylorwessing.com/regulatory
Questions?
Seminar:
“Best Practices for Spanish companies
doing business in / with the UK”
III Edition
Kindly sponsored by:
In collaboration with
Spain to UK
Recruitment Best Practise
Introduction
James Webb
Commercial Director – Propel
Digital recruitment specialists
Key points
• Localisation
• Value proposition
• Partnership
• Channels
Localisation
Tailored -
• Attract local talent
• Manage a local strategy
Localisation
Consider the variables -
• Audience
• Suppliers
• Practices
Localisation
Don’t stall -
• Clear timelines
• Clear objectives
• Clear requirements
Localisation
Salaries -
• Locally relevant
• Well-researched
Value proposition
Points of difference –
• Product
• Career
• Culture
Partnership
Work with a talent partner –
• Specialist
• Exclusive
• Engage early
• Set clear objectives
Channels
Changing landscape –
• Build an employer brand
• Use social channels
• Develop a community
Channels
http://www.bravenewtalent.com/vi
deos/5245/why-is-deloitte-the-
best-place-to-launch-a-career
Remember
Talent = Success
Thanks for listening Any questions?
James Webb
Commercial Director
Propel Group Ltd
[email protected] // 0207 004 0552
Seminar:
“Best Practices for Spanish companies
doing business in / with the UK”
III Edition
Kindly sponsored by:
In collaboration with
Minimising Exchange Risks
Ebury Partners
London
January 19th, 2012
1. Introduction to Ebury Partners
2. UK-Spain trade corridor and FX risk implications
3. How to manage exchange risk: Succesful cases
4. Ebury Partners value proposition
Agenda
1. Introduction to Ebury Partners
Ebury Partners: currencies specialist
Financial institution (broker) specializing in foreign exchange and risk management.
Founded by Spanish partners with strong management both Spanish
and English. Headquarters in London and offices in Madrid
FX broker focused on SMEs
We offer products to support international trade in 3 areas:
• International payments
• Risk Management
• Treasury services
What is a broker and how it works?
As a FX broker we offer expertise and execution to companies and
individuals
International
liquidity providers
and global product
specialists Barclays UK
Ebury
Partners $, €, £, ¥…
• Super
competitive rates
• Tailored made
hedging
strategies
Clients
In UK:
Over 14% of the currencies transfers and payments executed through
specialized FX brokers
In Spain:
Banks as the sole providers of FX services because of the past regulatory
regulations
On 2009, a new regulation was introduced EU Payments Directive
EP has nearly four years of successful operations
and fast growth in the UK and is the first FX specialist to enter in Spain
More than 160
currencies
$, €, £, ¥…
Safety, regulation and credibility
FSA regulated company (Financial Services Authorities: financial regulator in the UK)
Authorised by the Bank of Spain and the CNMV to operate in Spain
More than 500 corporate clients
Working with:
• Institutions: Chambers of commerce, ICEX-London, CEIM Madrid,
China-Britain Business Council (CBBC), etc.
• Numerous industry associations:
- TIGA (Gaming Association)
- UKFT (The UK Fashion & Textiles Associations)
- Charities Financial Directors Group in UK
- SECARTYS (Spanish Association for the Internationalisation of the
Electronics, Information Technology and Telecommunications
companies)
Obtained funding from the Spanish Ministry of Industry and Trade and
the Government of Andalusia.
2. UK-Spain trade corridor and FX
risk implications
Structural changes in the Spanish market during the last 10 years
Evolution of real state sector (white), exports (yellow) and trade balance (green)
Exports of
goods and
services
have replaced
the Real state
as the Spanish
economy
engine
Source: Bloomberg
Evolution of Spanish international trade
* Data to October extrapolated to year end
Source: ICEX statistics
EU zone
Non-EU zone
Spanish Exports evolution. Thousand Million EUR
Spanish Imports evolution. Thousand Million EUR
• General trend to
increase of exports,
despite 2009 blink
• Some replacement
of imports from
EUR-zone to outside
EUR-zone
Top international trade partners outside EUR zone
Source: ICEX statistics
2011, Eur Million
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Top Spanish EXPORTS
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
China UK USA Russia Nigeria Saudi
Arabia
Top Spanish IMPORTS
• Uk is one of the most important partners to
Spanish trade both in imports and exports
Challenges and risks in international trade out of eurozone
Commercia
l
Financial
Logistic
• Fluctuation in foreign exchange income and expenses
• Variation in the valuation of foreign investments
• Operating cash receipts and payments in foreign currency
• Management of regulatory restrictions • Funding and insurance to
international trade
Ebury Partners
provides execution
services, risk
management and
advice to a much
lower cost
than traditional
banks
• Management of suppliers and distributors
• Product specifications
• Commercial contracts
• Price quoting and payments terms
• Communication and marketing
• Transport and paperwork
• Regulation and safety
• Customs management
Dramatic increase in volatility in the foreign
exchange market since the crisis started in 2007
Exchange rates in the major currencies: USD (white), JPY
(red), GBP (yellow), CH (green) against EUR
100 = Value on 1/1/2003
• Structural change
since the financial
crisis started in
2007-2008.
• In the last three
years the volatility
of the major
currencies has
been particularly
high.
Source: Bloomberg
In the short and medium term
volatility seems to continue to be
very high
Market's scepticism about the
solutions being proposed to the €
crisis is justified.
Main problems:
• Greek, Irish and Portuguese
debt sustainability
• The macroeconomic impact of
the measures already taken by
European governments
Short-medium term forecast
Differential with the 10y German Bund:
Italy (white) y Spain (orange)
Source: Bloomberg
The volatility and uncertainty is here to stay, and managing FX risk will be a key aspect of successful
financial management
Example of the impact of Fx volatility on trade • On July of 2011 a Spanish company received an invoice of 10MGBP to be paid
in six months time from its supplier in the UK.
• Spanish importer needs to buy 10MGBP but ¿How much can the cost of
10MGBP fluctuate over a six month period?
If the Spanish company does
not hedge it FX risk,
the cost can vary up to
954.400 EUR, which
represents almost a 10% of
our total invoice value.
Possible impacts of not
hedging:
• Uncertainty
• Loss of margin
• Difficulties for budgeting
Source: Ebury Partners
10.40
10.60
10.80
11.00
11.20
11.40
11.60
11.80
12.00
12.20
Millio
ns
Cost in € of GBP 10M. JULY – DEC 2011
3. How to manage the exchange
risk: Successful cases
Two simple tools to manage your currency risk:
forwards and market orders
Forwards
Seguros de
tipo de
cambio
Market
Orders
Órdenes de
mercado
Forwards allow companies to fix an exchange rate at which it
is possible to execute a transaction at:
• a future date (simple forwards);
• or during an established period of time (window forwards).
Market orders allow you to establish a desired execution
exchange rate. If the market reaches this rate we can execute
the transaction on the client’s behalf:
• Limit order
• Stop loss order
• One cancels other
Forward contracts remove the risk of currency
price volatility
Forwards
Seguros de
tipo de
cambio
Advantages:
• Elimination of uncertainty especially when budgeting
• Minimum impact on cash flow as only a 10% initial deposit is
required. Deposit can be lower subject to margin calls (i.e.
Call deposits when exchange rate varies)
• Flexibility as forward contracts can cover from 1 month to 1
year and even more
• Possibility of structuring currency transactions via non-
deliverable forwards, specially suited for exotic currencies
• Option to perform a ‘drawdown’ before the contract expiry
date (Window Forward)
• Peace of mind and time savings for management
Successful case using forward contracts
On December 1st Spanish importer receives an invoice to pay 1MGBP invoice
within one month.
EP helped the Spanish importer to hedge its FX risk by executing a 1 month
forward contract. This allowed the company to get a fixed exchange rate, even
though the currency delivery only took place on December 30th.
Source: Ebury Partners
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21
Millio
ns
Value in EUR of 1MGBP invoice in 1 month period. December 2011
Conclusions:
Forward contracts
made the company
save around 4% and
removed the currency
price volatility .
GBP/EUR moved from
1,1640 to 1,2010 in a
month period.
Market orders allow to react to market
movements 24h/day
Market
Orders
Órdenes de
mercado
Advantages:
• The capability to monitor market rates 24 hours a day
through our partner banks in the USA and Asia
• Combining a market order with a “stop loss order”, the
customer is guaranteed a minimum margin in operation,
while trying to get the best price possible in the execution
of the operation
• Peace of mind and time savings for management
Successful case using market orders
Source: Ebury Partners
Spanish exporter received a 1MGBP payment on the first of December and needs
to exchange them into EUR within a 4 week period.
EP helps the Spanish exporter by establishing a limit order GBP/EUR: 1,9
combined with a stop loss order at 1,15 on December 1st.
1-12-11 Client
established a limit order
GBP/EUR at 1,19 and a
stop loss at 1,15 when
the market was at 1,16
1.1400
1.1500
1.1600
1.1700
1.1800
1.1900
1.2000
1.2100
Dec
30
2011
Dec
29
2011
Dec
28
2011
Dec
27
2011
Dec
26
2011
Dec
23
2011
Dec
22
2011
Dec
21
2011
Dec
20
2011
Dec
19
2011
Dec
16
2011
Dec
15
2011
Dec
14
2011
Dec
13
2011
Dec
12
2011
Dec
09
2011
Dec
08
2011
Dec
07
2011
Dec
06
2011
Dec
05
2011
Dec
02
2011
Dec
01
2011
14-12-11 market got to 1,19
and the transaction was
executed getting an extra
2.6% margin on their sale.
GBP/EUP
4. Ebury Partners value proposition
Expertise
Service
• Access to real time
information. 24 hour/day
monitoring and analysis
the market.
• Proactive service and
tailored made strategies.
• Access to more than 160
currencies including
CNY.
Benefits of working with Ebury Patners
• Our team, selected for
their experience and
expertise, monitor the
market on a constant
basis, primed to take
advantage of any
movement that will
benefit you.
• Sector-focused service
through our specialist
consultants, who take
the time to understand
every facet of your
industry.
We offer the most
competitive exchange
rates possible – which
translate into savings
for you – up to 4% over
what you’d get from a
bank.
No commissions on
transactions >€10k.
Price
Team contact details
Enrique Diaz-Alvarez (Country Manger for
Spain and Head of strategy). Madrid
Fernando Cid (Head of Spanish desk).
London
Hector Alfonso (Fx Consultant). Madrid [email protected]
m
Elena Busquiel (Corporate Delvopement).
London
m
Iciar Vaquero (Partner). London [email protected]
Madrid Office
Apolonio Morales 1,
28036 Madrid
Tel. +34 918 29 37
22
London Office
42-44 Grosvenor
Gardens
SW1W 0EB, London
Tel. +44 (0) 207 1480
279
Spanish clients testimonials
"We decided to use Ebury Partners after one of our partner companies
recommend their service to us. They immediately offered rates that saved us
money on all of our international payments and kept us up to date with all the
information we could possibly need throughout the transaction processes.”
"Ebury Partners have helped us manage the FX exposure with some
important international investments. We have been very impressed with their
professionalism and effectiveness. They were knowledgeable, fast, very
professional and extremely competitive. We are now introducing Ebury
Partners to our portfolio companies to help them manage their FX risk and
reduce the cost of their international trade. We highly recommend Ebury
Partners".
Oriol Domenech, Spanish importer, Barcelona
Daniel Sánchez, General Partner, Private Equity
Seminar:
“Best Practices for Spanish companies
doing business in / with the UK”
III Edition
Kindly sponsored by:
In collaboration with
www.gvagrimley.co.uk
Property – Options & Market Overview
Iain Mulvey I January 2011
Commercial Property
• Sectors
– Offices: Serviced Offices vs Conventional Offices
– Retail Premises
– Industrial
• Methodology
– Approach
– Planning Issues
– Fit Out
– Exit costs
• Costs
– London Rental Map
Serviced offices v Conventional offices
• Advantages of renting serviced offices
– Quick, easy possession, often within 24 hours of viewing
– Short periods of commitment - generally three months
– Expansion possible within the buildings
– Limited need for rental deposits or bank guarantees
– No capital outlay
– No dilapidations liability at the end of the lease
• Disadvantages of renting a serviced office include:
– A limited pool of supply, as serviced offices represent a relatively small
proportion of the total office market
– Higher cost of flexibility (£1000 - £1500 per desk / £130 - £200 inclusive
per square foot)
– High telephony charges in some centres
– Lack of supply of "funky" style offices
– Some buildings are branded as business centres
Methodology
Why appoint an agent?
• What are your business needs?
– How much space do you require?
– Where do you need to be?
– What is your budget?
• How long will it take?
– Identify a property
– Negotiate a lease
– Fit out
• Property Search
– There are around 500 commercial property agents in the West End
alone. The vast size of the market can mean that collecting
information can be very difficult
Things to consider
• Key areas to consider when negotiating on Heads of Terms:
– Rent
– Landlords contribution
– Break clauses
– Legals – implications of the 1954 Landlord & Tenant Act
– Landlords consent
Things to consider
• What are the pitfalls?
– Do you have an exit strategy from your existing building?
– Service charge & rates
– Future disposal
• Complicated ownership structures
– Dilapidations – current and future
– Stamp duty
– Transitional phasing relief
– Deposits
– Energy performance of Buildings
‘Grade A’ & ‘Grade B’ space
• Grade A space
– Redeveloped / substantially refurbished
– Air conditioning (fresh air intake)
– Raised floor
– Metal tiled suspended ceilings
– LG7 compliant lighting
• Grade B space
– Refurbished accommodation
– Air conditioning / comfort cooling (heating and cooling existing air)
– Underfloor / perimeter trunking
– Metal tiled ceiling / mineral fibre
Market Overview – Rental Growth
Central London Prime Rental Growth, 1990 to present
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
Jun-9
1
Jun-9
2
Jun-9
3
Jun-9
4
Jun-9
5
Jun-9
6
Jun-9
7
Jun-9
8
Jun-9
9
Jun-0
0
Jun-0
1
Jun-0
2
Jun-0
3
Jun-0
4
Jun-0
5
Jun-0
6
Jun-0
7
Jun-0
8
Jun-0
9
Jun-1
0
Jun-1
1
An
nu
al c
ha
ng
e %
Central London West End City Docklands
Office Rental Profile – Central London
Location Rent (sq m) Rent Free
• Covent Garden £580 18 months
• Holborn £555 20 months
• Mayfair £745 18 months
• Paddington £465 20 months
• Soho £695 18 months
• St James £745 18 months
• Victoria £600 20 months
• Canary Wharf £355 24 months
• City Core £510 24 months
• City Fringe £255 24 months
Office Rental Profile – Outer London
Location Rent (psf) Rent Free
• Docklands Fringe £255 24 months
• Croydon £200 NA
• Hammersmith £300 NA
• Uxbridge £260 NA
• Hounslow £140 NA
Office Rental Profile – Outside London
Location Rent (psf) Rent Free
• Birmingham £255 NA
• Manchester £275 NA
• Leeds £260 NA
• Edinburgh £245 NA
• Reading £280 NA
Coventry Capital – 52 Charles Street, W1
• Instructed to acquire their first head office
in London with consideration to both City
and West End locations.
• This instruction was jointly serviced by
both the West End and City teams.
• Based in serviced offices in Berkeley
Square House a full availability audit was
produced for both locations
• Four properties, two in the City and two in
the West End were shortlisted. The West
End was preferred.
• Signed at 52 Charles Street
Midrex Technologies, Two London Bridge, SE1
• Midrex Technologies, a London &
Partners client, appointed GVA to
acquire it first European office in
London
• We viewed a number of different
properties across London and
chose offices at London Bridge
• GVA negotiated a flexible lease
which has a break clause to allow
Midrex to exit should the headcount
grow significantly.
• GVA also agreed a rent free period
Abba Hotels, Queen Anne’s Gate
• After purchase in 2007, the hotel was closed for approximately 28 months, for comprehensive refurbishment.
• We reviewed and provided advice based on full mitigation through utilising the part Grade II listing of the building (frontage
only).
• After detailed discussions with the Valuation Office we persuaded the council to apply full 100% exemption retrospectively for the entire 28 month refurbishment.
• This action realised a rates rebate of circa £200,000.
Seminar:
“Best Practices for Spanish companies
doing business in / with the UK”
III Edition
Kindly sponsored by:
In collaboration with
No Space for Mistakes - “Remember that time is money” (Benjamin Franklin)
London & Partners
Best Practice Seminar
January 2012
Nigel Taylor – Managing Director
Agenda
Hit the ground running – an ideal world
What is Interim Management?
Creating a robust market strategy
Supporting the business
Background information on IMA
How to contact IMA
Hit The Ground Running – an ideal world!
Know your target market
Have a competitive edge
Communicate correctly and positively from day 1
Have access to decision makers at target clients
Spend all your time on core, revenue generating
activity
Have the ability to flex your company quickly and
professionally as you grow and move into new
markets
What is Interim Management? “Interim Management is the rapid provision of senior executives to
manage change or transition” – Interim Management Association
Started in Holland in the late 70s/early 80’s
80,000 Interim Managers across Europe and a £1 billion UK
market
All industries are covered - Interim Managers are senior, function
and industry specialists who have a track record and skill set of
delivering a wide array of client requirements
Costs between £500 - £1500 per day - £800 being the norm
Interim Managers can be used on a part time or full time basis
Consultancy Interim
Management
Permanent
Employment
P
r
e
p
a
r
e
Deliver
H
a
n
d
O
v
e
r
Creating a Robust Market Strategy
Use local industry expert (Interim Manager) to:
Ascertain the size and value of the UK/European market
Assess the product/service’s viability in the UK/European
market
Identify competitors and their KPIs (with option of mystery
shopping and financial analysis of company accounts)
Test product/services with potential clients (through the
Interim Manager’s connections)
Look at the best route to market and do SWOT analysis
around the options (build, acquire, distribute)
Create the business case
Typical assignment length – 20 to 30 days
Supporting the Business
Outsource initial HR set up, Recruitment and ongoing support
If the target is new sales, hire a Sales Manager and not a GM
as the GM requirements can be picked up by Interim
Managers and other outsourcing providers
Use well connected expert Interim Managers to open up new
markets or answer complex tenders
When recruiting ask the question “is this particular
requirement short term or ongoing?” so you end up recruiting
someone with the right skill set
Before employing expensive consultants consider using an
expert Interim Manager as the costs can be ¼ of a Consultant
Background Information on IMA
Established in 2003, IMA is an Interim Management and
Executive Search company focused on Foreign Direct
Investment
A commercial partner of London & Partners and part of
UKTI’s Advisory Network and the US Commercial Service
BSP
IMA works across a wide range of industries including
Technology, Cleantech, Life Sciences, Government,
Automotive, Manufacturing, Retail, Distribution and Niche
Industry Sectors
Covers all major business disciplines including, General
Management, Sales & Marketing, Finance, IT, HR,
Manufacturing Operations, Supply Chain and Procurement,
Project & Programme Management and Specialist positions
How to contact IMA
Nigel Taylor - Managing Director
Mobile +44 (0)7887 802112
IMA
Bishops Walk House
19-23 High Street
Pinner
Middlesex
HA5 5PJ
Office: 020 8966 9222
Fax: 020 8966 9444
Further information can be found at:
www.managementanswers.co.uk
Thank you
Seminar:
“Best Practices for Spanish companies
doing business in / with the UK”
III Edition
Kindly sponsored by:
In collaboration with
