Ever thought about setting up your own business in the UK from abroad? Well, wherever you are, there’s good news — you can do it. And not just in a “we believe in you sense.” Starting a business in the UK isn’t a right reserved for UK nationals and residents. There are tons of opportunities for non-residents to get their entrepreneurial dreams off the ground in Great Britain.
Who could blame you for wanting to get your business going in a country with one of the biggest economies on Earth? And if you decide to take the plunge, you won’t be alone, as thousands of UK businesses are run by foreign nationals. But before you get started, it’s worth knowing a thing or two about running a business in the UK as a non-resident. That’s why we’ve put together the top five things that anybody considering starting a business in the UK from abroad should know.
1. It’s easier than you’d think.
Setting up a business in the UK is surprisingly easy as a foreign national. One of the biggest challenges to starting a business in the UK as a non-resident is getting a UK address to register your business. Companies House, the branch of HM Revenue and Customs responsible for the registrations of new companies, requires British companies to have a UK address. But that doesn’t mean you need to invest in buying or renting a property in the UK; there are other options available, such as:
- Using a virtual office address
- Using a friend or family member’s address (with their permission).
Once you’ve got your business address sorted, you can register your business the same way a UK resident would. You just need to enter the relevant details, including:
- Business name
- Company address
- Director information
- Shareholder information
- Articles of formation.
If you’re unsure about the process and need help, formation companies can make the process even easier by taking care of everything for you.
2. No need for a visa.
One of the reasons that starting a non-resident UK business is so easy is that you don’t need a working visa or immigration agreement to get started if you’re not planning on living and working in the UK. All foreign nations can start a business in the UK; you just need a UK business address.
But if you’re planning on moving to the UK to start a business as a foreign national, you’ll probably need a visa. There are several tiers of visas available:
- Tier 1 — highly skilled workers, entrepreneurs and investors
- Tier 2 — skilled workers
- Tier 3 — unskilled workers
- Tier 4 — students
- Tier 5 — temporary workers.
3. Get a British business bank account.
Sending and receiving money from overseas can quickly become very expensive. International bank transfers usually come with a high transaction fee, so continuing to make these transfers will quickly damage your profit margins.
If you can, get a British bank account so that you can protect your finances and keep all of your transactions local and steer clear of any international transfer fees. But getting a UK bank account can be difficult, as many banks avoid accounts for overseas residents because of international fraud and money laundering. If you’re unable to get one, digital or challenger bank accounts are a great alternative from financial institutions like:
- Wise (formerly Transferwise)
4. You don’t have the right to work in the UK.
While it might seem like a contradiction, you can own a UK business as a foreign national, but you cannot work in the UK without a working visa. This means that you can start a business and trade with people in the UK either online or by hiring UK residents in Britain as employees, but you cannot move to the UK to work for the business yourself.
5. You’ll need to pay UK tax.
By opening a UK business and trading, you’ll be liable to UK tax laws. Even for British residents, tax can get confusing quickly and so it may be worth speaking to a financial adviser about taxation in the UK before you get started. Usually, businesses will need to consider four types of tax:
- Corporation tax
- Value-added tax (VAT)
- National Insurance for employees
- Pay As You Earn (PAYE) for any employees
While it may be daunting, being a UK business means that you won’t be liable for taxes in your home country for any business-related income. You will still be responsible for any domestic income tax, though.