All You Need to Know Before Starting Your Business in the UK
The United Kingdom is a dream destination for aspiring Entrepreneurs in the Small and Medium Enterprises (SME) sector. Also, the fact that at least 99 percent of all private sector businesses in the UK comprises of SME, the UK attracts aspiring Entrepreneurs from across the globe.
So if you dream of starting your business in the UK, then you need to chalk out a viable plan of action — one that helps you get through the formalities, and also benefits you in the long run. To help you plan your entrepreneurial venture in the UK, we now bring you information and suggestions that can make the entire process smoother and easier for you.
Nature of Business
You need to identify the nature of your business — investing, operational, manufacturing, trading or something else. All of this is going to form the basis for further research. Next, subject to the type of business you wish to carry out, you may have to apply for certain certifications and licenses. So, the next step is to identify and execute all the necessary paperwork required to legitimately carry out that business in the UK. Getting your visa becomes much easier when you complete this step.
Choosing the Right Legal Entity
If you plan to set up a business in the UK, then you need to plan the right business structure, and therefore need to have absolute clarity about the available options. In the UK, you can run your business as a sole proprietary, establish a partnership firm, or choose to incorporate a private limited company. However, you must bear in mind that each of these entities would receive a distinct tax treatment. So, it is recommended that you talk to an Attorney and a qualified Chartered Accountant to get the most out of your decision. If you prefer to incorporate a company in the UK, then you must invest some time in getting your head around the Companies Act, 2006.
Naming your Business
Depending upon the nature and size of your business, you must follow the naming conventions. For Sole Traders and Partnership Firms, the norms are a lot more flexible. That’s mainly because you don’t have to register a name. However, there are certain restrictions, so you cannot use a name that’s identical to someone else’s trademark or one that’s considered offensive. On the other hand, to incorporate a company in the UK, you need to follow strict norms and must confirm the availability of the desired name, which you can do here.
Place of Business
If you aren’t located in the UK or don’t have anyone out there, then that’s no roadblock to starting a business in the UK. You can consider hiring a virtual space out there and get started with your dream project. However, we recommend this only in the initial stages, until you get a real place of business. You can then declare the change in the place of business, on papers.
Visa requirements for Entrepreneurs in the UK
Most people give up the idea of setting up a business in a foreign land, because of the never-ending paperwork involved in it. However, the business visa requirements in the UK are quite straightforward and uncomplicated. However, depending upon your country of origin, size of business and other factors, you may have to fulfill a certain set of conditions. The key is to know the pre-requisites beforehand so as to avoid any sort of delays or confusions. Let us now look into some of the business visas in the UK, and what it takes to get them.
Graduate Entrepreneur Visa
If you’ve got high credentials and are endorsed by Department of International Trade (DIT) or Higher Education Institution (HEI), then you can consider applying for a Graduate Entrepreneur Visa. If you apply for this one then it is most likely that you will receive a response within 3 to 8 weeks, from the concerned authority. All you need is a minimum of £945 in savings if you are already in the UK, else you must have at least £1890 in savings over the past 90 days.
The Entrepreneur Visa is ideal for cash-rich businesses, as you need to possess an investment potential of at least £50,000, or must have invested an amount equivalent to that. This visa is valid for a maximum period of 3 years and 4 months. After that, you can avail an extension, but you need to make certain other investments up to the tune of £200,000 in order to qualify for an extension. Now that £200,000 excludes commercial property and a couple of other things. So now you know why we said that’s ideal for cash-rich businesses.
Taxation and Compliance
Once you start a business, you must ensure that periodical filings and other essential formalities are complied with. So, you are going to need a team of external consultants, which must include Business Attorneys, Immigration Attorneys, Chartered Accountants, etc... You can hire these consultants online, and form a reliable team to help you get started.
Finally, don’t forget to talk to your Accountant regarding the most suitable form of accounting, whether on cash or accrual basis, depending on the type of your business. Also, your Accountant should be able to get you through the formalities of obtaining a Government Gateway User ID.
Also, talk to your Accountant about the ongoing documentation required for proper filing of returns and assess its feasibility. These are required to avail tax breaks such as business mileage, which may seem small at first, but may help you save up quite a bit.
Until the UK completes its formalities pertaining to BREXIT, the citizens of the EU and EEA countries shall continue to enjoy certain benefits and concessions. However, those from the non-EU countries need to go through the enormous paperwork, which may at times seem compelling. However, you can minimize the complications with the abovementioned suggestions and a sound team of external consultants.