Three things to consider before joining the UK market
If your business has been successful in your home country and your services and products have also received some interest from UK consumers, congratulations! However, before setting up an office in a foreign country, ensure you consider all aspects. Here are three questions to ask yourself before entering the UK market.
What are your objectives and why the UK?
Goal setting and having clear objectives must be a priority for every business to be successful, but especially when entering a new market. You will need to know how your business is currently operating and ask yourself some key questions:
• What are my long-term and short-term goals?
• How does my business compare to others in the UK market?
• What are my business’ current profit margins?
Next, you need to ask yourself how the UK helps you achieve these. The final decision to open a UK office should hinge on how well it meets the key objectives of your overall business plan and not on specific factors in isolation such as tax, employment conditions and legal aspects.
Of course, while achieving business objectives is paramount, you also need to consider where in the UK would best meet your needs. While London may seem the obvious choice, other major cities such as Manchester, Aberdeen and Cambridge might pose specific benefits for your business’ skills niche or industry.
What type of entity do you need?
Deciding what business entity you will operate under is not to be taken lightly as it can have implications both in the short term and the long term, particularly with regards legal aspects such as paying tax, sharing out profits, making company decisions and liabilities.
The three most common ways foreign investors set up a UK company include:
I. Registering as a UK establishment – commonly referred to as a UK branch
II. Incorporating a UK subsidiary, where the most common is a private limited company
III. Incorporating a limited liability partnership
Finding the most suitable business entity may require expert help, and seeking advice from an expert can be very useful. An adviser with experience of helping companies setup in the UK can help you make the decision by asking all the relevant questions. Before you make the decision of the type of business entity, we recommend considering the below aspects with your adviser;
• The business’ nature and likelihood of prosperity in the UK
• The period you expect to be in the UK
• The challenges that you might face in establishing your business in the UK
• Administrative costs and disclosure requirements
• Tax implications
What legal implications will you face?
Next, you will have to deal with the legal side of things. The business entity you have chosen will determine your duties and responsibilities. In either case, you will have to register your business with Companies House and with HMRC, the UK tax Authority. In addition to this you will also have to factor in the necessary time for completing all the required registrations and paperwork before you can legally start trading in the UK.
Once you have considered the above and decided to enter the UK market, you will be in a position to enjoy the many benefits that the UK has to offer, including good infrastructure, specialist skills bases, a healthy business environment and a diverse yet skilled workforce. If you need advice on how to set up a UK company, you should speak to the experts at Goodwille. We can advice on the most suitable business entity to your business and your legal responsibilities in the UK. Read more about our Corporate Legal services or contact us today for more information.