Expanding Your Business To The UK

The UK is a great springboard for international expansion and despite the uncertainty caused by Brexit and periodic turmoil in the global economy, Britain remains an excellent place to work and do business. The English language, business culture, access to a skilled workforce along with favourable corporation tax rates are just some of the reasons why many overseas companies choose to enter the UK market.

In this article, we’ll take a look at some of the most important tasks you need to do before launching a branch or office here, including finding the right route to market, registering a local branch and ensuring you abide by the various rules and regulations laid out in law.

Overview: whether you sell in person, online or use a database, there’ll be a route to market just right for you in the UK.

When setting up in the UK, one of the first things you need to do is establish your route to market. While the UK economy has some similarities to the models used in other European countries, such as Germany or the Nordics, there are also some significant differences. That’s why it pays to make a well-informed and strategic decision at the outset.

One common route to market for companies based abroad is the online selling option, as entry costs are lower. You won’t have to take the risk of committing to a lease on a physical office or storefront, and it’s also the case that you don’t have to base yourself in a physical location. That means you won’t have to go through the procedures involved in registering a branch in the UK.

However, there are also advantages to opening a physical presence here. Many consumer-facing companies find that the footfall of the high street can only be accessed with a physical store, while client-based service companies can find it hard to score new business without an office and a team.

A popular option for foreign companies setting up in the UK or opening a UK subsidiary is direct marketing. By employing the assistance of a company who can offer a database of potential leads, you can build your profile quickly while you take the time to establish yourself in other ways.

Overview: becoming a limited company means you’re not liable if the business fails.

Before you finalise your decision to begin expanding your business to the UK, it’s a good idea to first decide which route you will take.

One option is to become a limited company. The idea behind a limited company is that it is a legal entity distinct from the people who operate and own it – something which could come in useful if the worst happens and the company goes under.

In that eventuality, the owners would not have to foot the bill for any liabilities beyond their investments. In a limited company, the bank accounts of the directors and the business are kept completely separate, but the business can operate as normal and make profits.

If you decide to establish your new British branch as a limited company in order to receive these benefits, you’ll need to fulfil a few obligations. Firstly, you’ll need to decide on a relevant company name, and it must not be the same as any other already-registered company.

At least one person will have to designate themselves as a director, and you will also need to provide details of the company’s shares and who owns them. You’ll need to decide what type of shares are being allocated, and specify information such as whether or not the shares can be exchanged for cash and how many votes each shareholder gets when it comes to deciding on matters of company importance.

Overview: not all companies need to register, but if you do, you need to do it early.

If you decide to just open a branch rather than set up as a company here, then before you dive into planning for your expansion there are a few bureaucratic procedures which you will need to deal with first.

First and foremost, you’ll need to work out whether or not you must register as a company with Companies House. If you don’t have a physical presence in the UK (such as a shopping outlet or an office) then under the rules you will not need to register.

And if you’re a partnership or an unincorporated body, you will not be able to register at all. If you do open a physical branch of some sort, however, you will need to send certain information to Companies House within one month. This doesn’t leave you much time between entering the UK market and the registration deadline, so it’s a good idea to be prepared in advance.

The form, known as “Registration of an overseas company opening a UK establishment” or OS IN01, can be downloaded from the Internet and costs £20 to submit.

If it’s your company’s first time opening a UK subsidiary, you will also need to send up-to-date financial information (such as company accounts) and a tranche of constitutional documents like articles of association.

Overview: there are lots of rules to follow if you’re involved in distance or online selling.

When expanding your business to the UK, it’s important to remember that distance selling rules apply if people are buying via mail order or over the Internet.

Britain has strict regulations around distance selling, so it’s wise to consult an expert before entering the UK market.

Generally speaking, for most distance selling transactions you have to provide certain information before an order is placed. These items of information include (but aren’t limited to) a set of contact details and an address for your business, full price details including the taxes the customer will be charged, and detailed information about delivery prices and timeframes.

If you’re selling online, you’ll also need to adhere to some extra regulations.

For example, if you’re in the media industry and you offer television or film streaming services, you’ll need confirmation from your customers that they will forfeit their statutory right to a 14-day cancellation period before they agree to download the content.