You will no doubt have heard many claims from the Brexiters that leaving the EU would cut red tape – in my view they are wrong and the opposite would be the case for businesses like Equinox.

As the CEO of an international SME with less than 30 employees, I know how difficult it will be to operate in Europe without the simplified business rules that are available via the UK’s membership of the European Union.

After Brexit, an insurance business like ours would risk losing our operating licences in the 27 countries of the Europe Union. Insurance is a highly regulated business and we could not continue to underwrite without an operating licence. With more than 60% of Equinox’s customers located outside of the United Kingdom this would likely have a significant impact.

While we could apply for individual licences for Equinox’s three continental European offices, the costs, complexity and time involved in the process are rightly worrying. It is often a requirement for an insurance company to maintain a certain minimum level of capital in the country in order to obtain a licence as is the case in the UK. The duplication of such capital deposits, and the additional regulatory costs would not be welcome and could force us to relocate our headquarters away from the UK and into a continental European country.

As a business we have direct experience of the difference between setting up inside and outside the EU as the process to open our first office in North America, which we completed in 2014 in New York, involved considerable more legal, regulatory and financial hurdles than the straight forward process we experienced in Hamburg, Paris and The Netherlands.

Quite rightly, without any ties or access to detailed regulatory information that flows through the European Union, the US authorities required more information from us and needed longer to consider our application. It is a risk that the French, German or other European regulators will require the same, after June 23rd if Equinox is suddenly a non-EU business.

All sides call for the facts to dominate the debate on EU membership, but of course the seriousness of what is at stake on both sides means sticking to them is extremely difficult. It’s vital that we in the business and trade community set out precisely what leaving the EU would mean for the ongoing success of our companies. That is why, in what I plan to be a series of blogs, I have focused on one of the most fundamental issues, a licence to carry out business.

Mike Holley

1 April 2016

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