RALEIGH, NC—The British pound has fallen in value against the US dollar since the country voted for Brexit three years ago. Today, the pound is at $1.21—the lowest it has been relative to the dollar in more than 34 years. But Womble Bond Dickinson international tax attorney Rick Minor said businesses and investors shouldn’t overreact to this trend.
Minor spoke on the pound’s recent shrinkage with the Triangle Business Journal. Minor tells the publication that in the short-term, US companies moving into the UK can benefit from lower costs, while British companies may benefit exchange rate risk-wise in both the US and the UK from generating profits in their US operations (in dollars).
But he said businesses generally don’t make long-term moves based on currency fluctuations because those are so volatile. He noted that Womble Bond Dickinson, a transatlantic law firm with offices in both the US and UK, is “seeing a healthy flow” of work in both directions.
“The UK is still a popular place for US businesses,” Minor tells the Triangle Business Journal. “But Ireland is also popular and Germany is also trending as an attractive jurisdiction for US investors.”
However, Minor said Brexit remains a much larger looming concern for British businesses.
“The UK businesses we are advising, they are not fleeing the UK but they are looking to expand into a friendly market like the US as a hedge against the uncertainty that Brexit might bring,” Minor said.
The article also quotes local travel agency owner Paul Iacono of Travel Experts, who said the currency fluctuations haven’t made an impact on transatlantic tourism.
Click here to read “Businesses, travelers weigh options as pound slumps” in the Triangle Business Journal (subscription required).
Also, click here to read Minor’s recent comments to Bloomberg Insights on possible candidates for EU Tax Commissioner.
Rick Minor is an international tax lawyer with over two decades of experience in Europe advising US businesses on cross-border tax, commercial and regulatory issues. He has advocated before officials of the European Commission on behalf of US companies and in his own name on tax and privacy law issues. He follows closely the constantly evolving agenda of the European Commission and can advise US clients on how to manage the complexity of that agenda as it specifically impacts their European business models. He was a fiscal advisor to the outgoing Commission President, Jean Claude Juncker, when Juncker was Prime Minister of Luxembourg.