BUSINESS IN THE UNITED KINGDOM

Great Britain is one of the political and economic leaders of Europe. Since ancient times, the extensive use of scientific and technological developments allows the country to maximize the reduction of production costs and thus stimulate economic development. For example, the sphere of agriculture is so mechanized that the number of labor force employed in this area does not exceed 2%.

Business in the UK forms the lion's share of GDP and is considered a priority for the development of the state. The financial and banking sectors occupy one of the central places in the world, which undoubtedly attracts investors from different countries and contributes to the increase in the level of business immigration to the UK.

Business in the UK

Back when it was part of the EU, the British society chose to stay outside the monetary and economic union. Thus, the country protected its national interests and this was in no way reflected in the trade turnover with other states. By the way, almost 25% of the UK's exports go to the US and Germany.

IMPORTANT. On June 23, 2016, a referendum on the UK's membership in the EU was held, at which 51.89% of Britons wished to withdraw from this association.

Great Britain has solid reserves of natural resources, including natural gas, oil and coal. Industrial production is characterized by a wide variety of products. From food products to shipbuilding and airplane construction.

Entrepreneurship in the UK helps to accelerate the acquisition of permanent residence and subsequently British citizenship. For family members of the immigrant opens access to prestigious education and simplified employment. Further in the article we will learn how to open a business in the UK and consider the main features.

CONTENTS

How to start a business in the UK

The Doing Business annual report ranks the UK as the 8th easiest place to start a business out of 190 countries and 2nd among European countries, after Denmark. The Kingdom consists of England, Scotland, Wales and Northern Ireland and each country has its own specifics. This article will talk more about English business, but to some extent all the British community is united by common features of business life.

Features of business in the UK

Most British companies have a clear hierarchical structure. Despite encouraging the initiative of individual employees, personal ambitions can in no way become an obstacle to achieving the overall goals of the company. Managers and supervisors enjoy unquestionable authority and are usually on good terms with the team.
UK entrepreneurs are rather pragmatic and rational people. Most decisions are made by the manager personally, although group discussions of company goals and objectives are often practiced. Business meetings are usually formal and rarely turn into informal conversation.
Business style prevails in the form of dress, especially when it comes to London. In everyday life men mostly wear sweaters and blazers, for official meetings they use dark suits and ties.
In Great Britain more often than in other European countries invite business partners to lunch or dinner at home. In England it is customary to stay for 10-20 minutes, in Wales and Scotland it is better to arrive on time. It is necessary to present a small gift to the mistress of the house, in the form of flowers or a bottle of wine.

Any foreigner can do business in Great Britain. Citizens of the European Union and Switzerland have equal opportunities with local businessmen. Entrepreneurs from other countries usually use one of the work visas, allowing full-fledged business and living in the UK.

In most cases, the foreigner needs to prove English language skills and meet the qualification requirements. For an up-to-date list of official language centers in the UK, please click here. You can match your educational diploma on the website of the British information center NARIC.

Visas for foreigners to do business in the UK

Tier 1 Entrepreneur. The visa provides the opportunity to start your own business in the UK if the following conditions are met:

Age 16 years or older.
Availability of legal funds not less than 50 thousand pounds. In practice, foreigners tend to confirm the availability of the amount of 200 thousand pounds, since in this case no special permission from the British Trade and Investment Agency is required.
To score at least 95 points required to obtain a visa. These requirements have been in place since 2008 and are designed to ensure control over migration processes in the UK. Points are awarded based on criteria such as:

English language proficiency (C1 level). Financial security. In addition to the mandatory amount of investments, it is necessary to have a minimum of 3,310 pounds to live in the UK. In the case of being on British territory, 945 pounds is sufficient.
The funds must be deposited in a regulated financial institution, preferably a UK investment fund, and be for the establishment of a specific business.

The cost of an entrepreneur visa, if applied for by post or online, is 1,277 pounds. Otherwise, it is 1,021 pounds. Residence permit in the UK is issued for 3 years 4 months, with the right to extend for 2 years. After 5 years you can get the status of permanent resident.

This visa allows you to move family members, open several companies at the same time and officially work in one of them. If desired, it is allowed to join forces with the holder of an identical visa.

Representative of an Overseas Business visa. Allows you to move to the UK as the manager of a branch or subsidiary of a foreign company, as well as an employee of a news agency or newspaper. The visa costs 610 pounds. The validity period is 3 years with the right to extend up to 5 years, after which you can apply for permanent residence. Family relocation is permitted.

Tier 1 Investor. The visa is available to holders of 2 million pounds or more. In case of investing funds in one of the British companies or UK government bonds, the foreigner is granted a visa for a period of 3 years and 4 months, with the right to extend for another two years. The cost of the investor visa is 1,623 pounds.

Registering a business (company) in the UK

You can register a business in the UK through a special Companies House website online or by regular mail by submitting an application form IN01 to the Companies House.

In the first case the cost of registration is 15 pounds, the procedure takes 24 hours. In the second case you will need a minimum of 8-10 days and 40 pounds.

Company registration procedure in the UK

Registration in the Companies House service, for this you will need:
- choose a unique name and UK address for the company;
- appoint at least one director and shareholder of the company;
- register the memorandum and articles of association;
Registration with HMRC UK Revenue and Customs. The company must be registered as a corporation tax payer, and in the case of turnover over 82 thousand pounds and as a VAT payer. In addition, it is necessary to make payments in the system of national insurance and deduct income tax.
Registration of insurance policies for each employee with a UK insurance company.

Forms of ownership and directions for business in the UK

Depending on the type and scale of the company's activities, it is very important to choose the most appropriate form of ownership. For example, for those wishing to start a small business in the UK, sole proprietorship is most suitable. Two other popular forms are limited liability company (LLC) and partnership.

The choice of ownership form depends on the following factors:

The degree of liability and profit sharing.
The taxation system and the possibility of optimization.
Scope of activity and amount of investment.

Individual entrepreneur. Maximally simplified opening procedure. Registration with HMRC is sufficient. The main feature is full personal liability for the company's obligations, including its own property. The main responsibilities are filing an annual tax return, social security contributions and paying income tax.

LLC. Implies equal liability of shareholders for the company's obligations in proportion to their contributions. Information about the new company must be recorded in the Registration Chamber, a minimum of one director and a qualified secretary must be appointed. The distribution of profits is after corporation tax.

Partnership. A joint venture between two or more persons who are equally personally liable for the obligations of the company, unless otherwise specified in the contract. Each partner's share of profits is taxable. Generally, if one of the owners dies or goes bankrupt, the company must close down.

When choosing an area of activity for business in the UK, first of all, it is necessary to pay attention to the license requirements. The list of areas for which you need to obtain a special permit is available on the official government portal GOV.UK.

Otherwise, there is no point in giving specific advice. Western consumers are used to receiving quality goods and are ready to pay serious money for them. The regional component is of great importance, for example, in London it is almost unrealistic to find an unoccupied niche, here it makes sense to target large investments. Market analysis and experience are the main helpers in choosing a sphere for business.

Taxes in the UK

The UK tax system has a complex and dynamic structure with a large number of tax levies and mandatory payments. The structure of taxation depends on the type of activity, the size of turnover, the form of ownership and many other aspects. Most likely, you will not be able to do without the help of a local expert.

Tax rates in the UK

Corporate tax – 25% (from 2023). The rate of 19% is provided if the annual profit is not more than 50,000 pounds.

Income tax – progressive rate from 0% to 45%.

VAT – main rate – 20%, reduced rate – 5% (household electricity, baby carriages, mobility aids for disabled people) and 0% (books, children's clothing, food).

One of the peculiarities of the British tax system is the contribution of part of the profit to the national insurance fund. Initially, it was planned to increase a variety of state benefits, pensions and other social payments at the expense of these funds. In reality, it is just an additional tax.

UK Business Visa

For each business immigration program to the UK, you will need to obtain the appropriate visa. Comprehensive information and requirements are provided on the official website www.gov.uk. Here you can apply for the visa and the list of required documents.

UK Business Visa

In addition, you need to contact a certified visa center in your home country for more information and visa application support. Here is the official website. Depending on the type of visa, the list of documents and conditions may differ.

Documents for a business visa to the UK under the Entrepreneur Tier 1 program:

Civil and foreign passport.
Color photo.
Confirmation of the required amount of investment funds (not less than 50 thousand pounds).
Business Plan.
Certificate of English language proficiency.
Proof of financial security (minimum 3,310 pounds).
TB test result.
Certificate of absence of a criminal record.

In each individual case visa center staff may require additional documents.

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