Set up a business in the UK

Setting up in the UK is often a key stage in the development of a company, wherever it is based in the world. A stepping stone into Europe with a reach to the United States. A competitive tax system also adds to the attraction.

But there are complex decisions to make before making the move into the UK, and they come with tax and regulatory implications.

What to consider

The first priority is to work out what levels of financial and physical commitment will be needed. These are commercial choices to do with ambition, budget, logistics and personnel.

Some businesses will want to establish a small sales team first, perhaps running as a branch. This can be easier to organise than setting up a full UK subsidiary. It also reduced exposure but can result in having to file annual UK tax returns.

Retailers with their own stores abroad may prefer to test the market by selling directly to customers online or through concession space. Others will want to be scaled-up with premises and a big presence.

Setting up your business in the UK – What are the issues you need to consider?

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Think about timing

The planning should include creating a clear time-line because some processes, such as registering for VAT and banking arrangements, can be slow to put in place.

A UK subsidiary must be set up to fit into the reporting systems of its parent company and not financially adrift.

The key steps

When bringing a business to the UK it is important to:

• Create an appropriate, tax-efficient business structure, whether as a branch of an overseas business or a new limited company.
• Ensure operations are fully compliant with UK law.
• Secure VAT registration before any trading begins.
• Arrange residency issues, including determining tax status, if relocating people.
• Put in place pension, accounting, treasury, payroll and compliance systems.
• Carry out financial due diligence if takeovers or acquisitions are planned.
• Tax plan to maximise reliefs and meet international financial reporting requirements.
• Set up structures to ensure the efficient circulation of cash and repatriation of funds.

Finally, an overlooked aspect of inward investment into the UK concerns cultural and social differences.

These can impact on the way a business is perceived, and how it runs itself. What works in one country may not in another.

These issues should be part of an ‘audit of opportunity’ as the investment is assessed. Once any issues are identified, the right relationships can be built through your UK advisers to smooth the journey from commercial outsider to established insider.

For more detail on what you need to consider when setting up a business in the UK, download our factsheet or watch our video below.

If you are looking to expand or set up a business in the UK and would like some expert guidance, contact us to arrange to speak with one of our specialists in London, Kent or Sussex.

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