Despite the challenges brought about by Brexit, the appetite for cross-border growth into the EU remains strong among UK companies. According to the 2025 European Commission’s Flash Eurobarometer on Startups, Scaleups, and Entrepreneurship, 912,000 UK businesses were actively considering growth into the EU, with the most popular EU countries for such growth being Ireland, the Netherlands, Germany, France, and Spain. Importantly, UK businesses are not entering an unfamiliar market: around 20% of UK SMEs already export to the EU, demonstrating that the Union remains a key trading partner.
Practically, however, UK businesses seeking to scale into the EU face several structural challenges. One particularly critical obstacle is having to navigate between 27 different national legal systems. While the UK and the EU have concluded several agreements to make the post-Brexit transition smooth for all stakeholders, these agreements do not replicate the freedoms that UK businesses once enjoyed as part of the Single Market. In fact, approximately 27% of UK SMEs identify regulatory and administrative requirements as a barrier to expansion into the EU.
Regulatory challenges include:
- Customs formalities: UK goods entering the EU face customs declarations and border checks that did not exist pre-Brexit. This can lead to significant business delays.
- Rules of origin: Zero-tariff access only applies where goods comply with rules set out by the EU-UK Trade and Cooperation Agreement regarding the rules of origin requirements. Only goods fully originating from the EU/the UK enjoy zero-tariff access, and these rules are applied strictly.
- Regulatory divergence and possible dual compliance: UK producers wishing to serve both markets must meet both sets of standards and regulations, with no mutual recognition of conformity assessment.
- No automatic recognition of professional qualifications: Doctors, engineers, architects, etc. from the UK must go through a lengthy process to have their qualifications recognized in the EU Member State they may want to practice in.
At the same time, these challenges should not distract from one simple reality: for UK businesses looking to scale, the EU remains one of the world’s most valuable growth markets. Expansion into the EU means unlocking a Single Market of 450 million consumers, integrating into supply chains that span 27 countries, and access to an economy worth €18 trillion. For many, it is the logical next step from a successful domestic operation to becoming truly international.
The opportunities extend beyond market size. The EU also remains a major innovation hub, investing more than €403 billion annually in research and development. It is home to some of the world’s most advanced industrial clusters and innovative ecosystems, particularly in the fields of clean tech, computing, quantum and digital. Businesses established in Europe open themselves up to new commercial partnerships, highly specialised talent, and research networks, providing a widespread access that is difficult to replace elsewhere.
Crucially, meeting EU standards can also create wider strategic value: the EU is often a global regulatory rule-setter, frequently shaping business practices far beyond its borders. Choosing the EU as the first international expansion destination, and therefore achieving compliance at the highest standard from the beginning, creates a business with significant operational maturity at an early stage of growth. This positions businesses very well for further expansion at a later stage, because the operational structures are already in place to attract more investors, partners, and consumers.
In short, expansion into the EU is not merely about selling into another export market. It is about gaining access to a vast economic ecosystem that can accelerate growth, strengthen competitiveness, and elevate a business onto an international stage. The regulatory and operational challenges are real, but for companies with ambitions to scale, the potential rewards are often transformational. The key for UK businesses is not to treat compliance as an afterthought, but as an inherent part of the scaling journey from the beginning.
Are you a UK business considering the EU, but not sure where to start? Spark is hosting a webinar in collaboration with our partners at Farringford Legal on Thursday 8th October. We’ll cover the top 5 compliance musts you need to cover for success in the EU. More information to come!
Check out Farringford Legal’s website: https://farringfordlegal.co.uk/
If you have a specific question or concern about your compliance, whether you’re in the UK or the EU, get in touch at solutions@sparklegalpolicy.eu to see how our team can help.
