If you’re a U.S. company looking to expand internationally, the U.K. is one market that might be on your horizon.
The barriers to entry for international companies are pretty low. In fact, in 2014, Matthew Hancock, who previously served as Minister for Small Business, Industry, and Enterprise, highlighted some of the measures the government had put in place to attract inward investment, including reducing the corporation tax to 20 percent, the joint lowest in the G20.
The measures aren’t just aimed at big business, but also at attracting entrepreneurs. The Sirius program invites overseas entrepreneurs, usually recent graduates, to set up businesses in the U.K. The program provides incentives including living expenses and work visas with the aim of keeping innovative businesses in the country.
Doing business in the U.K. may also give you access, because of proximity, to networking opportunities with European entrepreneurs, which could be helpful when it’s time for further expansion.
So how do you get started with doing business in the U.K.? Some of the resources below will help.
Resources In The UK
1. Companies House
One of the first steps is to check that your chosen business name is available for incorporation. You do this at Companies House, which also allows you to file paperwork relating to your incorporation application, country of registration, type of company and details. This is a relatively inexpensive process (ranging from £15 online to £40 by post). If you need to incorporate your business on the same day; however, it will set you back £100.
2. VAT and PAYE Registration
Even U.S. businesses who only sell downloadable digital products into the U.K. are supposed to be paying a type of tax common in the EU known as a Value Added Tax (VAT) as explained here.
If you’re going to supply more than £82,000 worth of goods within the U.K., then you must also register for VAT with Her Majesty’s Revenue and Customs (HMRC). In most cases, you can do this online and pay VAT online after registration.
If you plan to employ local staff, you will also have to register for PAYE, which handles income tax and national insurance contributions (covering health care and the state pension, among other things).
3. Company Formation Agent
But there’s more to setting up a business than simply doing the government paperwork. That’s why some businesses moving into the U.K. choose to use a company formation agent to provide a range of related business services. For example, 1st Formations will take care of filing, setting up registered and service addresses for the business and its directors, establishing business bank accounts and even setting up a .co.uk business site, which can help you achieve more prominence in the local market.
Resources for Understanding the UK Business Climate
If you’re going to do business in the U.K., then you need to understand the business climate. Here are some additional resources to help you with that.
4. Commercial Guide for the UK
The U.S. government has a commercial guide aimed at U.S. businesses wanting to export to the U.K. Written by trade experts who have served around the world, it gives you an overview of the market and political environment as well as trade regulations, customs requirements and standards.
5. UK Trade and Investment
Similarly, U.K .Trade and Investment helps overseas companies get started in the U.K. Its site has a huge list of resources about doing business in the UK, including specific guidance on different industry sectors.
6. Startup Advice
Small business owners will find great advice on Startups.co.uk, an independent resource bringing together a huge entrepreneurial community. With more than 50,000 members in its forum, you can find advice on practically anything that you need.
Must-Reads for Doing Business In The UK
Several sites serve as hubs for business information. Some worth noting are:
7. Small Business Trends
Small Business Trends (this site) is an online publication for small business news and information, with content provided by more than 400 vetted experts. It is a trusted source of independent information for small business owners and entrepreneurs — including many articles related to doing business in the U.K.
8. Great Business
Great Business is a U.K. government site which covers all business areas, including information on markets, skills, innovations and finance. It’s also another place to learn about regulation and business support programs.
9. Federation of Small Business
The Federation of Small Business describes itself as “the U.K.’s largest campaigning pressure group promoting and protecting the interests of the self-employed and small business owners.” If you want to know what’s happening behind the scenes and how it will affect your ability to do business, this is a must-read.
10. A Cultural Guide
George Bernard Shaw described the U.S. and U.K. as two countries divided by a common language. That’s why the last tip is to learn everything you can about the British culture.
There are dozens of resources online, covering everything from the British love of queuing and complaining about the weather (not always at the same time) to the different (sometimes offensive) meanings of words that are perfectly normal in the U.S. A good starting point is the book Notes from a Small Island, written by American Bill Bryson after he’d lived in England for quite a while:
These resources provide a great starting point for doing business in the U.K.
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Source: Small Business Trends