Markets in Australia, Canada and New Zealand are similar to the UK market. We speak the same language and have a very similar culture and shared history. Our demand for products and services are quite similar and so are our values and attitudes.

Given all that we have in common, it should be very easy for businesses from the UK to expand and move into another country or vice versa.

That is why it comes as a real surprise when we see so many businesses moving from Australia into the UK fail. Take the example of Bunnings from Australia. The company launched its operations in the UK last year with much fanfare, and failed in a spectacular fashion.

Same but Different

There are a number of theories on why businesses expanding into UK from Australia or New Zealand fail. Some believe that this is due to differences in company cultures across the globe.

Businesses and public in the UK are more conservative than their Australian counterparts. You may have heard of the famous ‘stiff upper lip’ of the British. It perfectly describes the attitude and behaviour of the UK public.

Business transactions and communications in the UK are more formal. Most business people wear suits and display a calm degree of reservation. You can expect to make calls to your acquaintances for one or two weeks before they agree to meet you in person.

The Aussie culture, in contrast, is more open and casual. I can tell you from personal observations that Australians are more direct and informal. Not that it is a bad thing. But their ‘enthusiasm’ (for the lack of a better word) can rub off negatively in a British cultural setting.

Business Practices

The good thing is that many of my clients also understand the cultural differences as they’ve told me often. One business manager admitted that they know and have experienced key differences between the two cultures and navigating the path has been tricky.

Take HR practices for instance. The UK HR practices are more advanced than elsewhere. ACAS ensures that businesses employ best practices in the UK. There is also greater emphasis on employee roles and responsibilities. Personality tests allow businesses to use workers in an optimal manner.

Australian businesses have more leeway in terms of employment laws. The recruitment conditions are quite basic for employers when hiring. Businesses coming into the UK may find it difficult to adapt to a stricter framework.

The UK legal system is also different from that of Australia. It is more complex and advanced than the Australian law for businesses. Australia has comparatively less red tape. Many of my clients have told me that this make doing business in the UK more difficult, especially if they don’t have a local partner to guide them in matters of legal compliance.

Take the recent example of FanDuel’s sale where employees and founders of the firm were excluded out of the deal. The private equity houses Shamrock and Kohlberg, who hold a majority share in the business, excluded the ordinary shareholders by exercising a ‘drag along’ clause. This clause allows majority shareholders to force minority shareholders to participate in a sale. A local business partner in the UK can provide guidance on corporate and business law. To follow the conversation on FanDuels check out Linked in

The tax regime is similar for both countries. However, some of my business clients have reported that the taxes in the UK were lower when compared with taxes in Australia and New Zealand. With Brexit taking effect soon, we expect the tax code to improve and open up great opportunities for businesses coming here from outside the EU.

 

These are quite a few examples of these, which we will explore in detail in future posts.

The experts at Global Front Room can provide a lot of guidance on Legal, HR, Financial and Tax matters for new businesses planning to move here. Join our network and let us know how we can help your business make the transition into the UK.