Foreign nationals living in the UK on temporary visas are entitled to certain rights. The nature and extent of these rights mainly depend on the type of visa you have.
A few decades ago, starting a business in the UK as a foreigner was easy and straightforward. However, today a lot of restrictions have been imposed on foreign nationals making it more difficult for them to start their own business. While the UK is still quite a business-friendly country, there are also many things for foreign nationals to consider before setting up a business in the UK.
There are a series of steps to be followed for foreigners if they are considering starting a business in the UK. Thankfully, the process is not too complicated but it will take some time to complete. Let’s consider these steps and determine if you are allowed to do business in the UK and if not, what are the requirements that you need to fulfill.
In particular, in this post we are going to explore how you can:
- Understand your visa
- Understand your business
- Register your business
- Register for tax
- Use Small World
Step 1: Understand your visa
Have you got a Visa? Before you even start to worry about setting up a business you need to be able to live and work in the UK legally. To do so you will need a visa. There are various types of visa and the process will depend on the country from which you are applying. Overall, the UK visas are most often accepted or declined within three weeks, although during busy periods this can be longer.
So if you want to start a business in the UK you need to study your current visa status. You may be entitled to becoming an entrepreneur in the UK depending on your nationality with a few additional permissions. You will have to file an application for that and wait for approval
The UK immigration system is a points-based system divided into different tiers. Tier 1 is known as ‘Entrepreneur’ and it is meant for those who want to invest in the UK for starting a new business or buying a property. This may be the visa you want to be focused on if you want to start a business in the UK as a foreigner, however the requirements are quite restrictive.
You can apply for a Tier 1 visa if you are already staying in the UK or if you are from outside the UK. To do so you will need to show that you have a certain amount of money in your bank account. You will have to show that you have invested around £50,000 in the UK in the last 12 months or that you have at least £50,000 in investment capital.
Once you have got your visa sorted out you can move on to the next steps.
Step 2: Understand your business
You will also need to consider the legal structure of your business. You cannot start a business in the UK unless you’re legally cleared.
Before you start, it is possible to decide your own legal course and structure for your business especially if you already know what you want to do. You may also hire a legal advisor or lawyer to complete this step in order to avoid legal troubles later on.
There are various types of business in the UK:
- Sole Trader
- Limited Company
- Limited Liability Partnership (LLP)
Understanding what type of business you are looking to start will help you when you start filing out all the formal administrative information. Visit the official Gov.uk website to learn more about setting up your business.
Step 3: Register your business
If you are planning to start a company you will need to get it registered with Companies House before starting operations. Companies House is the United Kingdom's registrar of companies and is an executive agency and trading fund of the Government. It is an institution you need to become familiar with if you want to start a business as a foreigner in the UK. Registering your business is part of the legal process, so you can defer to legal experts here, but it can be achieved quite easily if you receive proper advice.
Step 4: Register for tax
Once you complete all the steps above, the last step is to register for tax. This is one of the most important steps and requires a little homework.
If you run an incorporated business you will need to get registered for Corporation Tax. Even if you plan on starting a business from home, you will be required to register as a self-employed taxpayer with HMRC.
Nationals from member countries of the European Union (EU) do not need special permissions or additional visa requirements to start a business in the UK with the exception of Bulgaria and Romania.
This is the current situation which may change over the period of time depending on how and when the UK government decides to change their visa policies again. For all other foreign nationals who wish to start their own business in the UK these four steps should help you get started. Once you’ve completed them you can then start thinking about all the exciting elements that come with starting a new business.
Using Small World
Once you’ve started your business in the UK you may want to start sending some money. You can do this easily with Small World’s international money transfer service that helps millions around the world transfer money overseas.
If your business in the UK is successful you will be able to support your loved ones wherever you are based in the country. Small World is here for you!
Your first transfer online is always free of fees!