The United Kingdom is hailed as one of the best places in the world to start a business. With its established regulatory infrastructure, stable political landscape, straightforward tax system and rich talent pool, it’s no wonder that it’s an attractive place to do business.
That being said, starting a business in the UK as a non-resident can seem like a daunting prospect, especially when you consider unfamiliar legal processes and requirements. This article walks you through each step of the process so that you can register a company in the U.K. with confidence.
A point to note: the United Kingdom comprises three separate jurisdictions. This article focusses on starting a business in England and Wales for overseas nationals.
1. Do foreign nationals need a visa to open a business in the UK
Whether or not you need a visa is the first question you should ask yourself when looking to start a business in the UK as a non-resident. Post-Brexit, most foreign nationals have to apply for a work visa before they can think about starting a business.
Overseas nationals starting a business in the UK need to ensure to they research what kind of VISA they should be applying for. The Start-up and Innovator Visas have replaced the Tier 1 (Entrepreneur) visas.
To apply for an Innovator Visa you need be looking to set up an innovative business in the UK that is distinct from any existing businesses. Your concept and proposed business needs to also have been endorsed by an approved body. You can find the Government’s approved list of ‘endorsing bodies’ here. In addition, you will need to have obtained at least £50,000 of investment for your business (unless you have already established your business and it was endorsed previously).
You also need to satisfy the other eligibility requirements including:
- English language requirement
- Age requirement (being at least 18 years of age)
- Evidencing that you have enough personal savings to support yourself financially during your time in the UK.
Finally, you need to demonstrate that your business is new and viable. If you apply from outside the UK, you should hear back with a decision within 3 weeks.
It costs £1,036 (correct at time of writing) to apply from outside of the UK for an Innovator Visa and you will be permitted to stay in the UK for three years.
Like the Innovator Visa, you are able to apply for a Start-up Visa if you can prove that you want to set up an innovative business in the UK and meet the other eligibility requirements.
Your start-up needs to have been endorsed by an authorised body that is either a UK higher education institution or a business organisation that has a history of supporting UK entrepreneurs. Unlike the Innovator Visa, there is no requirement to secure start-up investment.
With the Start-up Visa, you can stay for 2 years in the UK. Note, however, that you are able to apply to extend this visa.
It takes around three weeks to hear back about your visa decision and costs £378 to apply for the Start-up Visa from abroad.
Global Talent Visa
Another option to consider is the Global Talent Visa. This visa is aimed at leaders (existing or potential) in academia or research, arts and culture, and digital technology. As above, you need to have secured endorsement (or win an eligible award).
If you obtain a Global Talent Visa, you’ll be able to stay in the UK for 5 years. It takes 3 weeks to hear back about your visa decision and costs £623 to apply.
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Once you have obtained the correct visa, you will have the legal right to start a business in the UK. From here, the process is identical to that for local UK residents.
2. Consider your business structure
The next thing to consider when starting a business in England and Wales is your business structure. There are three main business structures: sole trader, partnership and limited company.
The type of business structure that you choose can impact your tax, personal liability, legal and administrative responsibilities, ownership structure, as well as your business credibility and scaleability. For this reason, taking the time to understand the specific characteristics of each structure is critical. You can discover the ins-and-outs of choosing a business structure in our guide. And if you’re looking for in-depth legal advice, our expert solicitors are on hand to help.
Once you’ve chosen your business structure, you’ll need to take the relevant steps to register with HMRC and (if relevant) with Companies House.
3. Business insurance and licences
When you’ve set up your business, you need to ensure that you take out relevant insurance policies. Some policies are legally required, such as employers’ liability insurance if you hire employees or professional indemnity insurance for certain professions.
In addition, depending on the nature of your business, you may need to obtain certain licences to be able to operate legally. Check with your local council or relevant authorities.
Ready to start your business in the UK?
Starting a business in the UK as an overseas national, though not impossible, can be an administrative headache for non-residents that are not familiar with the legal system. To ensure you fulfill all the requirements, it is advisable to seek expert legal guidance for the entire process. Our lawyers offer extensive expertise, assisting foreign nationals to navigate immigration processes and opening their business in the UK. Get in touch today to find out how we can help.
FAQs about opening a business in UK for overseas nationals
1. Can immigrants start a business in UK?
Once a non-resident has obtained the relevant work visa, they are able to start a business in the U.K.
2. Is it easy to start a business in the UK?
The World Bank ranked the U.K. as 8 out of 190 economies in terms of ease of doing business. This means the registration process is fairly straightforward as long as you are aware of the different requirements.