Issues to consider for your tech business before post Brexit

As the UK prepares for Brexit with the transition period due to end on 31 December 2020, it is an important time for businesses operating in the tech sector.

Trade agreement or not there will be significant changes.  From 1 January 2021, it is vital that businesses have knowledge of how new regulations may affect their business and how it is conducted.

An important part of preparing for Brexit is understanding the strategic priorities for your business. Having a clear knowledge of this will ensure that you are devoting your energy to the things which matter most. Understanding your company and the greatest areas of exposure to Brexit related change, together with new opportunities that it presents, will be vital to the ongoing success of most organizations.

To determine your strategic priorities as well as potential risks, ask the following questions of your business to identify areas of concern:

  • What jurisdictions does your business operate in?
  • What are your highest risk supply chain contracts?
  • What are your highest risk clients or customer contracts?
  • What clauses do you have in your standard forms to mitigate the effects of Brexit?
  • What clauses do you need to negotiate into your other contracts to mitigate the effects of Brexit?
  • What options do you have in your contracts to terminate them if they become loss-making or otherwise unworkable due to Brexit?

Other things to consider:

  • GDPR if transferring data oversees are your policies and processes in place
  • Pool of talent and resources if immigration rules change
  • Employing people living overseas/ WRH policies

The implementation of the Network and Information Systems (NIS) Directive has provided a set of legal measures as well but this will only impact on the larger businesses.

How do I know if my tech business is caught by the NIS regulations?

A digital service provider is a business that provides any of the following digital services, online marketplaces, online search engines or cloud computing services. Under the NIS Regulations, a digital service provider is a relevant digital service provider (RDSP) and therefore caught by the regulation, if it meets the following 3 criteria:

  1. it employs 50 or more staff, or has a turnover of more than €10m per year, or a balance sheet total of more than €10m per year;
  2. its main establishment is in the UK or it has nominated a representative in the UK or EU; and
  3. it offers services in the EU.

What about tech businesses based in the EU offering services in the UK?

As the UK will no longer be an EU member state, the NIS regulations will require businesses that are based in the EU and offering services in the EU to undertake the following criteria by March 2021:

  • Appoint a representative in the UK in writing by following the Information Commissioner’s Office (ICO) registration process
  • Comply with the NIS Regulations in the UK, regardless of whether they are already complying with the domestic law transposed from the NIS Directive in their EU Member State

It is strongly recommended that tech businesses caught by the NIS regulations take steps to implement the above criteria and start their engagement with the relevant member state before the end of 2020 to ensure a smooth transition.

We are here to help

Please get in touch for a consultation with one of our specialist solicitors if you have any concerns regarding Brexit and the implications for your business.