Business Opportunities in the UK
The United Kingdom is one of the safest places to start a business because of its pro-innovation regulations, robust market, and the gold standard in corporate governance. The country is a global powerhouse for foreign investments. Moreover, the low corporate tax rates, manageable regulations, and a vast pool of skilled labor are solid pros to starting a business in the UK.
UK has a good infrastructure paired with conducive research and development and flexible international trade, along with its steady economy. According to the World Bank, the UK ranks fourth globally for ease of doing business.
The smaller enterprises form the lifeline of the UK economy.
Here are some business opportunities in the United Kingdom that have flourished over the years and continue to thrive:
- Banking and Finance
- Real Estate
- General insurance
- Management consultancy
- Machinery development
- Legal activities
While the pandemic affected and folded several businesses, it also saw an emerging trend of small and home-based businesses. SME sector in the UK is seeing a boom in recent times, more so in the pandemic years, with several people resorting to small businesses from home.
Some of the thriving business opportunities in the UK amidst this situation are –
- Health products
- Online fashion and beauty stores /e-Commerce
- Home food services
- Web development
Benefits of Starting a Business in the UK
Choosing an appropriate location for foreign expansion is vital to the growth of your business. Several influential factors boost the prospect of setting up a company in the UK.
We have listed down the key advantages of doing business in the United Kingdom:
- Overall ease of doing business
- Strong business infrastructure
- Entrepreneur-friendly culture
- Central time zone
- Convenient location with access to world markets
- Booming economy
- A magnet for international investments
- Operations in English gives an additional advantage to communicating globally
The UK has a great reputation worldwide for doing business and accommodating new ones. There are special tax incentives to encourage foreign investments. The country is an open market to do business, without any exchange controls. However, there is a consistency in regulation for specific sectors (financial services, consumer law) with due diligence for compliance.
Requirements for Starting a Business in the UK
To start a business in the United Kingdom, your company must fulfill certain requirements, like
First and foremost, check your eligibility for setting up a company by holding valid work/business visas for the UK.
Limited companies need to register the company name with the Companies House.
You will need a local registered address for company incorporation in the UK.
Your company must have at least one director and a company secretary (unless it is a private limited company).
A limited company must have at least one shareholder who can be a director. There is no maximum number of shareholders.
Memorandum of association:
Prepare a legal statement signed by all initial shareholders agreeing to form the company.
A public company must have a minimum amount of share capital worth £50,000, of which at least 25% must be paid up.
This document lists all the company’s details, including details of shares issued and capital.
General Compliance Requirements
An incorporation business in the UK must keep track of all accounting of financing and the company itself. It should include details of the assets owned, debts owned, company stock, all goods bought and sold, and who you bought from and sold to.
Keep details of directors, shareholders, and company secretaries. Maintain a register of ‘people with significant control’ of anyone who owns more than 25% shares in the company, can influence your company, or appoint/remove the directors.
The HMRC checks records of any kind of taxes you or the company pays. Maintain PAYE records and returns if you have employees. Also, keep self-assessment tax returns.
Types of Business Structures in the UK
The type of company structure you choose to start a business in the UK will affect your taxes, personal liability, and scope of administration.
Each business entity has its set of advantages and drawbacks. Companies must evaluate their objectives and decide upon the appropriate entity for company incorporation in the UK.
Company Registration Process
Setting up a company in the UK is relatively easy. The company registration in the UK differs according to the type of business structure chosen. But the basic steps are as follows:\
Name your business:
- Select a name that is unique and not similar to other company names in the UK. Two businesses cannot have the same or similar legal names.
- You can check the already registered names in the Companies House register.
Choose the business structure:
- Decide on the type of business entity you want your company to be incorporated. The requirements differ for each type of business, so do careful research and decide.
Assembling the team:
- Shareholders: There has to be at least one shareholder to form a company. The shareholder can be the same person as a company director.
- Directors: Directors are responsible for running the company, so you need to appoint at least one director. A director may not be a resident of the UK, but your company must have a UK-registered office address.
- Company Secretary: A company secretary is another crucial post that must be filled while registering a company. It is not a mandate in a private limited company but required for larger businesses.
Register local address:
You need to have a local registered address for your company incorporation in the UK.
- Memorandum of Association: A legal statement signed by all initial shareholders who agree to form the company.
- Articles of Association: Written guidelines about the company’s administration agreed upon by all shareholders, directors, and company secretary.
File the incorporation with Companies House:
- On collecting all the required documents, send them to the Companies House for approval.
Once you complete these steps to incorporate a company in the UK, wait for approval from the Companies House. Once you’ve successfully registered, you will need to get these things in order:
- Set up a bank account.
- Register with HM Revenue and Customs for payment of corporate taxes.
- Register a company trademark, if applicable to your business.
Timeline for business registration:
The timeframe for company incorporation in the United Kingdom depends on which method you’ve filed the documents. It is usually quicker, in about 24 hours; it is usually quicker if you have filed online. The Companies House verifies all the documents, shareholder and director details. If the application is sent via post, it takes about eight to ten days.
How Much Does it Cost to Incorporate a Company in the UK?
- The cost of incorporating a business in the UK depends on the type of business entity and application method.
- The cost of same-day incorporation is a little higher than the other costs.
Are Foreigners in the UK on Certain Passes Allowed to Start a Business in the UK?
The UK encourages foreign investments, allowing citizens of any nationality to start a business in the country. However, they must meet specific visa requirements and initial investment funds. The UK has several categories within business visas, depending on the purpose of the visit.
To set up a business in the UK, you can apply for the following visas:
Applicable for those who want to start an innovative business, something different from what is present in the market. You must have valid investment funds of at least £50,000 and enough personal savings to support your stay in the country.
Similar to the innovator visa, the main criterion is an endorsement from an authorized body – it could be a higher education institution or a reliable business organization. Although there is no investment funding requirement, you must prove your financial capabilities along with the necessary language requirements (Level B2 on the Common European Framework of Reference for Languages (CEFR) scale).
Government Assistance for Foreign-owned Businesses
The UK government’s Department for International Trade (DIT) offers extensive assistance to help foreign companies grow.
- It helps in providing sector-specific information and offers generous tax incentives
- There are accompanied visits to identify potential sites for business operations
- Provide financial modeling to calculate risks and profits after taxation
- Companies that have already invested in the UK get assistance in exports
- The UK government has a set of capital schemes with incentives up to 230% for businesses investing in the UK’s research and development.
How Can Multiplier Help?
We hope you now have a fair idea about starting a company in the UK, from the advantages to the registration costs. Now, you can make the right decision about incorporating your company.
If you are still unclear about certain aspects, partner with an external service provider which offers a global employment solution. Multiplier has local entities in over 150+ countries, so we are aware of the intricacies of the process. Our digital platform can successfully assist you in managing a workforce from across the globe. We hire and manage the payroll for your full-time employees.
Our skilled workforce is well aware of the dynamics of the changing laws and will keep you updated at every step.