LONDON -- Japanese companies based in the U.K. are increasingly inquiring about setting up operations in Germany and the Netherlands as confusion intensifies over Britain's planned exit from the EU.
Prime Minister Theresa May is fighting a last-ditch battle to save the deal she negotiated with Brussels setting out the terms of Britain's withdrawal. Lawmakers appear set to reject the agreement in a vote on Tuesday, potentially triggering a crisis that could bring down her government.
Businesses have in recent months been taking precautions in light of the controversy that has dogged the withdrawal process. Germany and the Netherlands' trade and investment agencies have both received an increased number of inquiries from businesses looking to relocate operations in recent months, with Japanese companies having been particularly active, according to officials.
"Almost everyone has cited Brexit," explains Robert Scheid, U.K. Director of Germany Trade and Invest. "We've noticed the trend that Japanese companies seem to be quicker to want to hedge their bets and make sure they are there prepared," he added.
The agency's U.K. office has seen the number of inquiries it receives grow by 20% every year since the referendum in 2016.
The Japanese Chamber of Commerce and Industry in the Netherlands has welcomed over 20 new members this year, bringing the total to 259. "[There were] four in the summer, and over ten in half a year, which is rare," said Chairman Kenji Saito.
"Only one or two have left London completely. There are a lot of cases where companies have decided to have bases in both London and the Netherlands, and have their headquarters here," he added. "They come to the Netherlands as they want an additional base in Europe outside of the U.K., because of Brexit."
Jeroen C.M. Nijland, commissioner of the Netherlands Foreign Investment Agency, said the body is currently handling roughly 250 Brexit-related projects. Over the course of 2017, its caseload more than tripled, and it has had to hire six additional staff.
Many of its overseas offices are in Asia, with recent additions in China and India, and the region is seen as an important part of its portfolio. "For Japan, if workloads continue, I will put more people into the offices," he said.
According to consultants EY, Asian businesses tend to have a more negative view of the consequences of Brexit than companies from elsewhere.
"Fifty percent of Asian investors in EY's latest U.K. Attractiveness Report said they were most worried about losing market access to the EU, compared with 39% of all investors," said Mark Gregory, the company's chief economist for the U.K.
"This reflects the fact that many invest in the U.K. to export to the EU or to locate their regional headquarters."
According to Gregory, "Twenty-five percent of Asian investors say they will move assets out of the U.K. in the next three years, compared with 8% overall."
May's government faces considerable opposition in parliament ahead of Tuesday's vote, and the country's future relationship with the EU is yet to be finalized.
"Insecurity will stay for a while," said Nijland. "I really don't think that the last company who is thinking about moving over has already knocked on our door. I think there will be more."