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Top 5 countries when selling services overseas from the UK

Submitted by admin on Wed, 01/19/2022 - 13:58

By Juwaria Merchant (04/01/2022)

Let’s imagine a scenario: You have a successful UK based service business and are thinking of selling services overseas. But where first? Don’t worry, you will not be alone. If the data from October 2021 is anything to show then selling services overseas contributed to a whopping £2,92,294 million to UK trade in 2020 alone. In this article, we’ll take a look at what services have the most demand, and the top 5 countries for selling services overseas.

You’ll also need to consider cultural, regulatory, currency, language and other issues which we will discuss elsewhere in this series.

What are export services?  

Selling services overseas is much like exporting goods, except in this case, you’re not exporting products, you’re exporting your expertise. As such, it’s not always obvious when you are selling services overseas, as talking with a client in Romania on Zoom feels much like talking with a client in England on Zoom. In simple terms, any trade that happens from your home country to other markets for the sale of services is classified as an export service. 

You might get in trouble if you’re selling services overseas and don’t pay attention to VAT rules and other regulations. So it’s important to take your expansion one step at a time and take relevant advice.

What services have the most demand? 

Some services are more easily exported than others but there are opportunities in all markets. From a UK perspective, the top three are:

  1. Financial Services  

Financial expertise is the need of the hour, and as businesses continue to expand through the pandemic, they require assistance with fundraising and exploring other markets and regions. Financial advisers, lawyers and authorised  experts are all crucial in getting those aspects right, and by that regard, their expertise is a service where the UK is well placed to export. 

  1. Travel 

The travel industry is struggling at the moment, but before Covid, it was one of the largest exported services around the world, helping out other service industries like transportation. It’s a safe bet that once the world adjusts to a new semi-normality, we can expect to see a rise in travel services too.

  1. IT Services 

The march of the machines continues, meaning that tech support has become a necessary part of people’s lives. Although IT services already rank as one of the most in-demand services, we can only imagine that demand will grow in the near future. 

If you’d like to discuss what opportunities there might be for you in your sector please do reach out and we’d be delighted to talk with you.

Top 5 countries to export services to from the UK

  1. United States 

The United States has always been an undisputed winner when it comes to being a trade partner with the UK. It almost always clocks in a hefty percentage when importing services from the United Kingdom. As per data from 2019, the U.S was responsible for the trade of export services which amounted to US$875.8 billion. But remember, while the language is the same, each state has its own regulations and taxes, so for some services you’ll be better off thinking of it as 50 different territories, rather than one big one. And as a famously litigious country, you’ll want to make sure your legal documentation is up to scratch.

  1. Ireland

Ireland has had one of the fastest growths in the past few years and not only did it reach almost $239 billion in trade of export services, but it also had a growth of 12.4% since 2018 (as per reported data in 2019). Ireland is no doubt turning out to be one of the top gainers in today’s market and we wouldn’t be surprised if it managed to knock out USA too one fine day. It also shares a land border with the UK, is in the EU and is easy to get to. If you want a country to start your service exporting journey, Ireland is ideal. 

  1. Germany  

$340.7 billion — that’s the amount that Germany shells almost every year importing services from the world. It comes as no shock that it is one of the top 3 trade partners for the UK too. Dominant member of the EU, even without Angela Merkel, there is little  doubt that it will retain its top trading position. While most native English speakers don’t speak German, there will be no shortage of potential German clients who speak English. The huge market (not to mention its culture, people and history) makes it well worth learning some new vocabulary.

  1. Netherlands  

The Netherlands has come pretty close to stealing France’s spot in the UK's top trading partners multiple times. One of the reasons why we’re giving this space to the Netherlands instead of France is because France has, as per latest data, reduced worldwide export trade by 2.3%, whereas Netherlands has increased it by 6.4%, so the direction of travel is clear. A liberal trading nation like the UK with a lot of shared history makes the Netherlands, like Ireland, a great place to start your exporting journey. 

  1. Japan 

Japan has shown momentum growth in the purchase of export services with a recent 6% increase. Around $205.1 billion is spent on importing services from worldwide markets. The only other country that attained growth like this was Thailand. An island nation with a big neighbour, Japan is nevertheless sufficiently different from the UK in terms of business culture and language (and indeed, time zone) that it is probably a great opportunity only for the most confident businesses, or those with existing links to the country.

As a UK service business, the world is your oyster. The countries above are only 5 suggestions, and there are many more opportunities.

Wherever you choose, start off by getting in touch with us for a free consultation to talk around the issues generally faced by businesses like yours.

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