Starting a Company in the United Kingdom
Considering that the United Kingdom (UK) continues to rank as one of the world’s most lucrative economies, with $2.8 trillion in spending power (#6 in the world) and a vibrant per-capita income ($43,620), it’s no surprise that entrepreneurs around the world want a piece of the action.
In this article, we’ll take a look at what it takes to start a company in the United Kingdom, as well as explore an alternative that is changing the ways that businesses expand to the UK.
Starting a Company in the United Kingdom
To begin, there are a number of steps that you’ll have to complete before determining whether setting up a business is a viable solution. These include:
- Sorting out the legalities
- Creating a business plan
- Choosing your company’s legal structure
- Choosing a business name and address
- Setting up a limited company (if applicable)
- Registering your business with HM Revenue and Customs
- Verify any additional formalities
#1 – Sorting Out the Legalities:
To begin, you must first check to see if your immigration status allows you to work in the UK. This includes making sure you have the necessary visa(s) and residence permits. For individuals who are non-EU/EFTA nationals, there are several Tier 1 work visas you can apply for, including:
- Graduate Entrepreneur Visa UK
Requirements: If you’ve graduated with a Masters of Business Administration (MBA) and have a business idea to start in the United Kingdom, you can apply for endorsement from the UK Department for International Trade.
- Entrepreneur Visa UK
Requirements: You must have £50,000 (~£65,000 USD) of funds for investment with the intent to start a company in the United Kingdom.
- Investor Visa UK
Requirements: You must have £2 million (~£2.6 million USD) to invest in the United Kingdom economy to be granted this type of visa.
Step #2 – Create a Business Plan
Foreign entrepreneurs are required to have a mandatory business plan, which must include budget forecasts and market research. The UK government provides entrepreneurs with a helpful guide for business plans (including templates).
Step #3 – Choose Your Company’s Legal Structure:
Because you are a foreign national, there are a number of types of companies that you can start in the United Kingdom. These include:
- Sole trader
- General partnership
- Limited partnership
- Limited liability partnership (LLP)
- Private Limited Company (Ltd)
- Public Limited Company (PLC)
- * Unlimited Companies
- * Social Enterprises
- * Unincorporated Associations
* These are less common for small-businesses and entrepreneurs to pursue when entering the UK market.
[Important Note: Foreign companies registered in the United Kingdom that want to operate as a business in the United Kingdom (or open up a branch or subsidiary) need to register as an overseas company with Companies House. This requires filling out form OS IN01, registration of an overseas company opening a UK establishment, and paying a £20 registration fee within 1 month of opening your business.
Step #4 – Choose a Business Name and Address
In technical terms, limited companies are the only business types that need to register their business name. However, depending on the business type you’ve chosen, you’ll have to at least provide a valid address for tax purposes and joining the company register.
Step #5 – For Limited Companies
Considering that most individuals will opt for a limited company in the UK, the following is a list of things you need to do:
- Appoint directors
- Appoint a company secretary
- Work out your shares and shareholders
- Open a separate bank account
- Register for corporation tax
- Write articles of association and your memorandum,
It’s important to know ahead of time what is required for limited companies in the United Kingdom.
Step #6 – Registering Your Business with HM Revenue and Customs
For tax purposes, you will need to register your United Kingdom-based business with HM Revenue and Customs. Limited companies need to register with Companies House at the cost of £40 (by post) or £12 (online).
Step #7 – Verify Any Additional Formalities
Lastly, the particular industry that your business offers may contain additional requirements and rules to follow in order to do business in the United Kingdom. This includes:
- Licenses and permits,
- Insurance for you and your staff/employees,
- Guidelines for following if you are importing/ exporting goods or handling customer data,
- And so forth.
Expanding to the United Kingdom with Virtual Phone Numbers
If you’re looking to jumpstart your business in the UK, then consider using UK virtual phone numbers. By subscribing to a virtual phone number and marketing it in the United Kingdom, you can instantly gain access to UK markets without having to jump through the hoops outlined above. Virtual phone numbers ultimately overcome the substantial costs, headache-inducing legal hurdles, and the red tape that setting up a business in the UK can present to entrepreneurs.
Virtual phone numbers, in their simplest terms, are phone numbers that instantly route calls anywhere in the world. This means that you can remain outside of the UK but route calls to your call center, say, in India or the United States.
Virtual phone numbers are indistinguishable from any “normal” UK-based phone number, which can aid in your localization efforts. Consider contacting a qualified service provider, like United World Telecom to handle your business expansion needs at the most reasonable costs.
Author: Tom Senkus
Tom Senkus is an international entrepreneur and former resident of the UK (London and Manchester). He is the author of ten books and has been published in more than 50 publications. More info about his list of services can be found at www.tomsenkuswriter.com