Boom in UK firms fleeing to Germany to escape Brexit

Germany is experiencing a surge in investment from foreign companies, with a boom in British firms setting up in the EU country after Brexit.

Big UK companies seeking a “foothold” in the single market to ease the red tape burden helped Germany reach its highest-ever level of foreign direct investment (FDI) last year.

FDI rose to £22bn in 2022 from £6bn the previous year, according to official figures from Germany Trade & Invest (GTAI).

British-based companies set up 170 projects in Germany last year – up 21 per cent on 2021, according to the figures first reported in the Financial Times.

“Companies from all over the world appreciate Germany’s market size, secure legal framework, highly qualified workforce, infrastructure and R&D environment,” said GTAI’s chief executive Robert Hermann.

He added: “That’s why a host of big American companies have expanded here. For British companies, it is also particularly important to have a foothold in the European Union after Brexit.”

Frasers Group – which owns Sports Direct – revealed last year that it was creating a new distribution facility in Germany to act as its EU headquarters.

Hundreds of others major British companies have set up in Europe to distribute goods inside the bloc without their customers having to pay new duties and taxes required after Brexit.

“This performance is very impressive,” said Mr Hermann on Germany’s foreign investment boom. “Given all the negative factors, many people would have predicted FDI levels would decline. But the German economy showed its strength.”

Meanwhile, London’s Labour mayor Sadiq Khan has again called for more powers to ensure businesses in the capital thrive post-Brexit.

Mr Khan, has said the UK should reconsider joining the EU single market, and urged Rishi Sunak’s government to devolve some immigration powers to City Hall.

“Allowing us to create a regional shortage occupation list in partnership with business would give London the ability to attract and retain talent in the sectors which need it most,” he wrote in City AM.

It comes as a new poll found regret among Leave voters has reached a record high – with more voters than ever believing Brexit has been a “failure”. It follows Nigel Farage’s admission Brexit had not been a success.

Overall, 62 per cent of voters said leaving the EU had been “more of a failure”, with just 9 per cent saying it had been a “success”. The YouGov poll also found more than a third of those who backed Leave say it has been more of a failure than a success.

Brexiteer Tory MP David Jones told The Independent that “everyone knew” the break-up would take some time, but insisted “we are already seeing the benefits” – citing trade deals with Australia and New Zealand.

But Liberal Democrat foreign affairs spokesperson Layla Moran said: “The Conservatives’ botched deal with Europe has been an utter disaster for the country. To grow the economy, you have to fix our broken relationship with Europe.”

Blur frontman Damon Albarn has mourned new visa restrictions on musicians touring much of the EU after Brexit. “Brexit was a travesty and people are waking up to that now … But it was a disaster – spiritually, economically, just rubbish. Brexit is rubbish,” he told Channel 4 News.