Living in and operating out of Germany must make this stance easier for Tutao GmbH. What options are available to organisations in the UK?
1. Get sued
2. Get a court order to backdoor your encryption
3. Get your doors bashed in by police for non compliance, everything seized, and a criminal case coming your way
It's not like one company can fight its own government.
Would I be right in assuming that you’ve never been on the receiving end of a government-scale lawsuit?
If you're operating in the UK, your operations there must, naturally, be subject to UK law.
You don't actually need a real address in the UK to open a company there, an address at one of those virtual offices is enough, so you could conceivably avoid the criminal case (if you live in a country that won't extradite you!). What you couldn't avoid is the UK telling you that you are no longer allowed to be a UK registered company, which is obviously within their rights to do.
I don't see any other option if what service you want to provide is illegal where you are based.