DIFFICULTIES in recruiting EU workers after Brexit could lead to one in five small Scottish businesses closing or radically changing their firm.
The report by the Federation of Small Businesses (FSB) Scotland also found that 40% of small Scots firms employ at least one EU worker - while the UK average stands at 26%.
Last week the UK Government laid out its new points-based immigration system plans, which would see "low-skilled" immigration slashed dramatically.
First Minister Nicola Sturgeon has recently proposed a Scotland-only immigration system to ensure the country's specific needs are taken care of, but the Tory Government rejected the suggestion just hours after she announced it last month.
READ MORE: WATCH: Nicola Sturgeon hits out at Scottish Tories' silence over immigration
Responding to the FSB Scotland report, SNP MSP Tom Arthur said it highlighted the need for Scottish Tories to speak out against Westminster's so-called "Innovator visa" plans.
He continued: “This report lays bare the devastating impact the Tories’ immigration plans will have for business owners in Scotland.
“Small businesses are the backbone of our economy and it’s time for Boris Johnson to get his head out the sand and listen to their needs before it’s too late.
“It’s shameful that not a single Scottish Tory MSP or MP can bring themselves to speak out against these plans that will force thousands of businesses north of the border to close their doors for good.
“The clock is ticking, politicians from all sides need to back the SNP’s plans for a tailored migration system that works specifically for Scotland.”
Meanwhile FSB Scotland policy chair Andrew McRae (above) said the Prime Minister's proposals are a "concerning prospect".
He said: “There are now more than 100,000 EU workers in employment in cities, towns and villages across the country. Needless to say, the imminent introduction of a new way of hiring workers from outside the UK is a concerning prospect
“Against a backdrop of weak economic growth, a buoyant labour market and an ageing population, it’s critical that we get the post-Brexit immigration system right. The tight timescales mean there’s no margin for error. Getting it wrong risks business closures.”
The FSB study sets out its own four-point plan on how to tailor the immigration system to work for Scotland's small businesses.
The plan would see would-be migrants given extra points if they want to work in Scotland.
The study also outlines the challenges that apply in Scotland, showing that Scots businesses have found it harder to hire the right staff in the last 12 months. Some 45% of small businesses in Scotland have faced challenges as opposed to the UK average of 38%.
Nina Falk, who was born in Sweden, runs textiles manufacturer Kalopsia Collective in Edinburgh with her partner. Falk said while Scotland has been a "very positive and friendly environment to set up a business" in, but expressed concerns over the post-Brexit plans.
She continued: "The UK Government’s new Innovator sisa will cut off so many amazing businesses and people, especially those from niche sectors or young people.”
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