If you’re considering starting a business in the UK, a virtual office address London can be a valuable asset, especially for those coming from overseas. With its diverse customer base and strong economy, the UK is an ideal location for entrepreneurs. According to The Hoxton Mix, knowing how to establish a business in the UK as a foreigner is essential. Fortunately, with proper information and preparation, the process is straightforward.
Below, we provide detailed steps to help you navigate the process. As you’ll discover, there’s a lot involved, so be sure to consider each aspect carefully.
Where all foreigners begin
You can find a relatively small proportion of foreign ownership within the non-financial area of the local economy. Actually in 2021, slightly more than one percent of the 2.5 million non-financial businesses were foreign-owned. Something that was an increase from the previous years’ numbers.
As hinted at in the intro, the UK provides an environment that attracts them to bring their talents here, but to do so requires a lot to be in order. Before knowing how to start a business in the UK as a foreigner, your business itself, as well as related plans have to be well-defined, and put together, an important act we’ll revisit later.
Three key steps
You can begin basic operations after you have comprehended and handled the basic steps. In this case, you can start the process of establishing your organization in the country. When it comes to knowing how to start a business as a foreigner in the UK, it can be summed in three steps, which are:
- Figuring out your business type
- Getting into the country
- Registration with the appropriate bodies
So you need to determine the type of business you want and all the processes that will take place. The first two steps help to understand registration. As such, we’ll delve into them starting now:
Figuring out your business type
There is a litany of business types in the UK, and these fall under two categories. These are as follows:
Unincorporated operations
These types of business structures see proprietors and their operations as the same entity, which means that they gain all profits, suffer all losses, and are fully liable. They include sole traders, which make up more than half of the UK’s businesses, and partnerships, which use the model of their counterpart, with multiple owners instead of one.
Incorporated operations
These structures are the opposite of unincorporated ones and see owners, and their operations as separate entities. As such, they have limited liability, and see profits shared in the form of dividends, while individual shareholders don’t claim the corporation’s losses. They include limited liability companies, partnerships, as well as non-profits.
These categories are indicators of where to register, and what tax will be paid. Unincorporated structures have to register with HMRC to ensure their legality, as well as to be certain of the type of tax they pay, which is only income tax, and national insurance. Incorporated structures register with both HMRC and Companies House for the same reasons, although they pay corporation tax.
Getting into the country
As a foreigner looking to establish a business in the UK, a visa will be needed. This is to either physically move to the place and set the operation up, or to run it remotely from overseas, while hiring people to help from within the countries. There are several visa types to choose from, and two of these are as follows:
- The innovator founder visa: this visa is for foreign proprietors with ideas that have to be new, unique, innovative, viable, scalable
- The global talent visa: this visa is meant for leaders in specific industries such as the arts, and tech
There may be questions regarding how EU citizens fit into this. To put it bluntly, they too, have to apply for visas as a result of the Brexit fallout.
Registration with the appropriate bodies
Having gone through what you’ll need, let’s get into the process. While the process of starting a business in the UK as a foreigner is for both categories of businesses, there are significant differences. As such, we’ll separate them, and start with unincorporated structures, which have proprietors go through the following to set up operations in the UK, assuming that your business plan is in order:
- Apply for a visa, which is hopefully accepted
- Choose a business name(which can be your own as a sole trader), and address according to UK law
- Get to know the rules and regulations surrounding your industry in the UK, which is part of properly defining your business
- Register the business with HMRC, with the above information, as well as others such as the national insurance number for sole traders who’ll take up residence in the UK, the details of partners in partnerships, and self-assessment registration for both structures
Incorporated operations
The process for incorporated operations is quite similar, with only a few differences. That said, for the sake of clarity, let’s go through the whole thing:
- Apply for a visa, which is hopefully accepted
- Choose a business name according to the law as well as an address
- Get to know the rules and regulations surrounding your industry in the UK
- Register the business with both HMRC and Companies House, which will include the above information, as well as the documents of formation, directors and secretary roles, directors and shareholders’ details
Registration is an important aspect of the process, as it confirms your business as valid. In addition to this, choose and fall the steps according to the law. It also ensures that you avoid the hefty punishments that arise as a result of non-compliance.
Final thoughts
The section demonstrates that, while the process of setting up your business is not easy when simplified into an easy-to-follow format, it is at the very least manageable. When you thoroughly understand how to start a business in the United Kingdom as a foreigner, you will enjoy all of the benefits of doing your work there while avoiding the costs associated with noncompliance. Today, you can also complete some processes online which are really suitable and quick. For sure, it makes things even easier!
