The United Kingdom is one of the most important economies in the world and the country is extremely conducive to starting an expatriate enterprise. In a 2011 survey by The World Bank, the U.K. ranked as the 7th place in the world in terms of ease of doing business and 1stin terms of ability for businesses to get credit.
Over recent years the United Kingdom has become progressively multicultural and foreign-owned business is both accepted and welcomed throughout the country.
Although the United Kingdom, as with other nations throughout the world, has suffered at the hands of the ongoing global recession, there remains plenty of opportunity for expatriates to start their own business and at present the government are implementing a large number of initiatives that are explicitly geared towards encouraging entrepreneurism and innovation. As such, if you have a good business idea and a suitable business plan there is certainly plenty of assistance available to help you to create a successful entity.
In 2011 foreign entrepreneurs and investors were given a boost when the UK Government introduced new visa rules that were aimed at attracting innovators to British soil. Under the new rules, those who come to the UK and invest large sums of money will be given the right to settle permanently in the UK. Those who invest £5 million will be allowed to settle here after three years and those that invest £10 million or more will be allowed to settle after two. Entrepreneurs will also be able to settle in the UK more quickly if they create ten jobs or turn over £5m in a three-year period. However, in order to progress this point you must first possess the right to live in the U.K. and start your business.
The most suitable visa for non-European expatriates who want to start a business in the United Kingdom is the Tier One Entrepreneur Visa. To qualify for this visa you must meet the following requirements:
Further information on the various requirements for entrepreneur visas, the application process and the documentation requirements can be found on the UK Border Agency website.
Once you have the appropriate visa you can start the process of establishing your business. In order to start a business in the U.K. you will need to complete five main steps. These will take an estimated 13 days to complete.
1. Choose a business name and check that it is unique.
All registered business names must be unique. To check that your intended company name is available, search the company name database.
2. Register your company with Companies House
Documents and forms required:
Companies House is responsible for the system of company registration in the U.K. To set up a limited company in the United Kingdom you will need to send them the following documents:
Form IN01: which details the company's registered office, type of articles, the names and addresses of its directors, statement of capital and initial shareholdings.
Memorandum of association: which provides the names of each subscriber and authentication that they have agreed to become members of that company
Articles of association: describes how the company will be run, shareholders' rights, any restricted objects and details of the directors' powers
The standard registration charge is GBP 20 and GBP 50 for same day incorporation, and online registration is GBP 15 and GBP 30 for same day incorporation.
The company comes into existence only when the Registrar of Companies issues a certificate of incorporation.
3. Contact HMRC and register for VAT
VAT is a tax that's charged on most goods and services that VAT-registered businesses provide in the UK. VAT is charged when a VAT-registered business sells to either another business or to a non-business customer.
If you expect your sales to be over £77,000 for the last 12 months you will need to register for VAT, otherwise you may be able to register voluntarily. You can learn more about the VAT registration process on the HMRC website.
4. Contact HMRC and register for PAYE
All companies must register for PAYE. To do so you must contact the Inland Revenue separately to start a contribution scheme for national insurance and pay-as-you-earn (PAYE) tax, which deducts income tax from employee wages or salary. You can read more about PAYE here: HMRC PAYE.
5. Sign up for employer’s liability insurance
In accordance with the Employers’ Liability (Compulsory Insurance) Act 1969, proof of insurance needs to be posted at the workplace. This can be physically or electronic, providing that all employees know how and where to allocate the certificate.
In order to operate your business legally in the United Kingdom there are a number of other requirements that you need to fulfill.
This article is intended to provide you with an overview of some of the steps needed to start a business in the United Kingdom as an expatriate. There are many other tax and reporting obligations that your company must meet from year to year. In order to ensure that your business stays within the realms of the law, see the interactive tool on Business Link.
Do you have a comment about this article, a further question or even a correction? If so please do let us know.
We may edit your comments and cannot guarantee that all comments will be published, please be nice!