Starting a Business in the UK as a Foreigner

Table

youneed toknowaboutstarting business inUK as foreigner,including the various types ofcompanystructures,taxation,administration, and the various visas youcanapplyfor

Whatare the differenttypes of businesses in the UK?

There are severalbusiness types inthe UK,and youmustchoose the one thatbestts yourcompanys structure Youcanchoose fromthe following:

Being a sole proprietor

Having a Partnership rm

Having a Limited LiabilityPartnership rm–whichis alsoknownas LLP

Having a Private Limited rm

The legalbusiness structure youselectwillaffectmanyaspects ofyourcompany, including taxation,personalliability,and the amountofadministrative workyoumust perform

SoleProprietor

prots afteryouve paid yourtaxes Youare personallyliable foranylosses your companysuffers Whenitcomes torunning and naming yourcompany youmustadhere tocertainrules As a sole proprietor youhave the following duties and responsibilities:

1 Keep trackofyourincome and expenses

2 Everyyear,le a self-assessmenttaxreturn

3 Payyourincome tax

4 Payfornationalinsurance classes 2 and 4

–Value Added Tax(VAT)

YoumustregisterforVAT ifyourbusiness meets the threshold

–Choosing a CompanyName

Youcaneithertrade underyourownname oruse a differentname foryourbusiness If youwanttopreventothers fromtrading underyourcompanyname,youmustregisterit as a trademark

OurMOST TRENDINGBlog:Howthe UKExpansionWorkervisa willhelp businesses tosetup a branchinthe UK!

PartnershipFirm

Apartnership rmis the moststraightforward waytosetup a companyinthe UKas a foreigner,fortwoormore people whowould like toruna business together The duties ofa partnership business structure are similartothose ofa sole proprietor,withthe exceptionthatyouhave one ormore business partners Whenyouforma partnership rm,youmusthave a formalagreementoutlining the agreed-uponsplitofearnings, losses,liabilities,and ownership

Whenforming a business partnership,youmust:

1 Selecta name

2 Selecta nominated partner–the ‘nominated partner’is responsible forthe partnership’s taxreturns and nancialmanagement

3 Become a memberofHMRevenue and Customs (HMRC)

LimitedLiabilityPartnership(LLP)

ALimited LiabilityPartnership canbe formed toconductbusiness withtwoormore members (LLP) Amembercanbe anindividualora company(referred toas a “corporate member”

As ina regularbusiness partnership,eachmemberpays taxontheirshare ofthe prots, butis notpersonallyliable foranyobligations thatthe business is unable topay The following are the rststeps informing anLLP:

1 Choosing a Business Name

2 Possessing a registered address

3 Having atleasttwomembers

4 Having a writtenagreementoutlining howthe LLPwillbe run

5 Members’Duties and Responsibilities AfterRegistering the LLPwithCompanies House

6 Youmustalways have atleasttwo“designated members”whohave more responsibilities thanothermembers

Insome cases,yourcompanymaybe registered as one ofthe structures listed above butoperate ina differentsub-category,suchas:

1 Afranchise –is a companythatalreadyexists and has a good reputation Ifyou owna franchise,youownthe rights touse the established company ’ s business planand operate undertheirbrand

2 Afreelancer–is someone whouses theirskills and experience toprovide a service (suchas writing orphotography) This type ofself-employmentworks byacquiring clients forwhomyouwillperformservices

3 Asocialenterprise –is a business thatworks tohelp societyorthe environmentin some way Toensure thattheycontinue toworktowards societalorenvironmental goals,these businesses mustbe openaboutthe prots theyreinvest

4 Acharityrm–is a charitys goal like thatofa socialenterprise is toserve the greatergood ofsociety Itis however unique inthatallofits prots come from donations

Eachcompanyhas its ownsetofrules and criteria Youmaywanttoseeka professional’s legaladvice before proceeding

PrivateLimitedFirm

APrivate Limited business mustbe administered byanappointed Directorinadditionto anyshareholders The nances ofa limited companyare separate fromyourpersonal nances as the founder Ifyouare the company ’ s sole employee,youcanstillregisteras a limited companybynaming yourselfas the Director The following are some ofthe Director’s responsibilities:

1 Followthe guidelines outlined inthe company ’ s articles ofincorporation

2 Maintaina record ofthe company ’ s activities and reportanychanges

3 Accounts and corporate taxreturns mustbe led

4 CorporationTaxmustbe paid

Althoughemployees canbe hired,a Directoris stilllegallyresponsible forthe company ’ s records,accounts,and performance

Because itis a separate legalentity,the companyhas its ownbankaccountand is subjecttocorporate tax Corporationtaxcanbe registered atthe same time as your business is registered withCompanies House,butunlike income tax,allprots made by a business are taxed,sothere is notax-free exemption Incontrast,the government allows forexpenses and deductions thatmayreduce the amountofcorporate taxowed

OurMOST

SmartMove2UKis

Determineyourlegalstanding

This means,anyEUcitizens wholived inthe UKbefore January1st,2021,maybe eligible forthe EUSettlementScheme,butmostofthe applicants willneed toapplyfor a UKbusiness visa before starting business inthe UKas a foreigner

Filloutavisaapplication

Ifyouneed a visa,youshould applyforone ahead oftime The UKoffers various visas thatcatertodifferentbusinesses Youmustonlyapplyforthe visa thataptlysuits your business type and purpose

Createabusinessplan

Entrepreneurs musthave a business planbefore starting business inthe UKas a foreigner This alsoincludes basicmarketresearchthatwillhelp youdetermine whether yourbusiness concepts are likelytothrive and be long-termviable inthe UK

Determineyourbusinessstructure

Before starting business inthe UKas a foreigner,youmustdecide the best-suitable business structure foryourcompany

Chooseacompanynameandaddress

Ifyouare a sole proprietor,youmayuse yourownname Youwillneed anaddress whenregistering yourUKbusiness fortaxpurposes and entering the companyregister

Onlya fewbusinesses are required toregistertheirnames;however,youmaydosoas a trademarktopreventothers fromtrading underthe same name as yourbusiness

Ifyouare forming a Private Limited Company,youmustappointDirectors and a CompanySecretary,calculate yourshares and shareholders,write yourmemorandum and articles oforganization,opena separate bankaccount,and registerforcorporation tax

BecomeamemberofHMRevenueandCustoms–alsoknownas HMRC

YoumustregisteryourUKbusiness withHMRCfortaxpurposes Private Limited companies mustalsoregisterwithCompanies House

Checkanyadditionalrulesthatapplytoyourindustry

Depending onthe nature ofyourUKbusiness additionalrequirements suchas permits orlicences mayapply

How can you establish a foreign companybranch in the UK?

Companies House requires foreigncompanies thatare eagertodobusiness or establisha branchinthe UKtoregisteras anoverseas company

Ifyouowna companyinanothercountryand wanttoopena branchinthe UK,you mustcomplete and submitformOSIN01 toCompanies House The registrationfee is £20

 ImportantNote: Exceptforsole traders and partnership rms manybusinesses inthe UKrequire a separate UKbusiness bankaccount However,it’s a good idea toopena separate bankaccounttokeep accounting operations simple

DifferentBusiness visa UKfromIndia and its types explained byourbusiness consultantinIndia

Whatare the differenttypes of UKBusiness Visas?

Below-mentioned are the various categories ofUKBusiness Visas forstarting a business inthe UKas a non-resident However youmustconsulta UKBusiness Visa SolicitororLawyertounderstand whichcategorysuits youthe best!

UKExpansionWorkerVisa

AUKExpansionWorkerVisa allows youtoenterthe UKand opena branchor subsidiaryrmofyourexisting overseas business

This is the mostpopularbusiness visa category,as itrequires ZERO Investment and is a self-sponsored route

This visa was launched justlastyear,inApril2022,as a replacementforthe UK Sole Representative Visa

Youare alsopermitted tobring yourpartnerand children(underthe age of18 years) tothe UKwiththis visa

KnowEverything AboutUKExpansionWorkerVisa

UKInnovatorVisa

The UKInnovatorVisa is suitable forthose entrepreneurs whohave anInnovative Viable and Scalable business plan

Along withthis,youare required tohave experience indoing business inthat industry

Inordertoapplyfora UKInnovatorVisa –youmustrstgetanendorsementfrom a UK-governmentauthorised endorsing body

Itis alsomandatoryforyoutohave £50,000 as investmentfunds

Youare permitted tobring yourpartnerand children(underthe age of18 years) to the UKwiththis visa UKStart-upVisa

KnowEverything AboutUKInnovatorVisa

Toqualifyfora UKStart-up Visa –youDO NOT require anyinvestmentfunds or anypriorbusiness experience

However,youmusthave a business planthatis Innovative,Viable,and Scalable And,youmustalsogetanendorsementfroma UKgovernmentauthorised endorsing body

Youare permitted tobring yourpartnerand children(underthe age of18 years) to the UKwiththis visa

KnowEverything AboutUKStart-up Visa

UKSkilledWorkerVisa

ASkilled WorkerVisa holdermustalways be employed bya UKSponsorLicence holderinordertokeep theirstatus

However,a Skilled Workeralsoincludes CEO,Managing Director,Director,and otherownermanagerroles

Youare permitted tobring yourpartnerand children(underthe age of18 years) to the UKwiththis visa

KnowEverything AboutUKSkilled WorkerVisa

Whatis the UKTaxation forbusinesses?

Fortaxpurposes,allUKbusinesses and entrepreneurs mustregisterwithHMRC and le theirtaxreturns

Prots earned byself-employed sole proprietors and partnerships are subjectto taxation

Private Limited companies and foreigncorporations withUKbranches mustregister forCorporationTax

CorporationTaxis levied at25% ofcompanyprots

YoumustalsoregisterforVAT ifyourbusiness is eligible forit

 Please Note:

Youstillmustapplyfora UKBusiness Visa forstarting a business inthe UKas a EUcitizen There are alsomultiple investmentopportunities inthe UKfor foreigners invarious industries and sectors

You can also watch ourvideo on:Can Foreign Nationals Starta Business in the UK!

Do you needhelpin startinga business in the UK?

There are ample business opportunities inthe UKforforeigners,make sure youfollowourquickand comprehensive guide to starting business inthe UKas a foreignerin2023

OurUKVisa Expertis based inIndia –Mumbai| Delhi| Bengaluruand offers legaladvice onallmatters concerning setting up a business inthe UKas a foreigner

Ifyouwantfurtherassistance tostarta business inthe UKas a foreignnational;We Are JustACallAway!

+91 9819127002 +91 9819127002

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April 16th, 2023 | Categories: UK Investor, Innovator, Business visas | Tags: Business in the UK, Starting Business in the UK

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