Despite the pros and cons of Brexit, the UK remains a viable, business-friendly environment to invest, trade, and expand. Note that the UK boasts of a mature, high-spending consumer market and an open, liberal economy, world-class talent, and a business-friendly regulatory environment.
Have it in mind that the language, legal system, funding environment, time zone, and lack of red tape ensure that the UK maintains its stand as one of the easiest markets to start and grow a business even as a foreigner.
As a foreigner in the UK, starting a business ensures you get access to a market of more than 60 million people, a vast range of suppliers and partners, and also gain from a wide array of programs primarily meant to help businesses of all types and sizes succeed, including a £100 billion infrastructure spending commitment.
However, note that numerous alterations have started to emerge in the UK, making opening a business in the UK a daunting task. One of the notable issues foreigners face is the immigration system.
According to reports, certain recent changes in the immigration system of the UK have made it very challenging for foreigners to obtain the legal document necessary to start a business. Although the UK is a very multi-cultural country, it is imperative you understand the “English way” of doing things and also the culture, which may vary exponentially from your own.
Starting a business in the UK as a foreigner may seem like a very challenging task, but it can be quite easy as long as you go about it the right way with an effective business plan. Note that going via the right channels ensures that you do the right thing once and for all.
Steps and Requirements to Start a Business in the UK
The process of starting a business in the UK is the same for foreigners and UK nationals alike. While it is very possible to start a successful business as a foreigner in the UK, have in mind that there are necessary criteria you have to meet. These criteria and steps may include;
1. Understand Your Visa
Right before you start thinking of starting a business in the UK, you have to first ensure that you can live and work legally in the UK. As a foreigner, you will need a visa. There are numerous types of visas in the UK and the process will depend on the country you are applying from.
EU citizens were in times past allowed to live and work freely in the UK without a visa – and vice versa – but since the Brexit transition period ended on 1st January 2021, all EU nationals are now expected to obtain a valid visa just the same way non-EU foreign nationals do.
However, anyone already living in the UK or applying for the EU Settlement Scheme before the transition period ended may have been permitted to continue living in the UK with permission to keep living and working freely. Nonetheless, there are specific visas for those who wish to start a business in the UK. Eligibility criteria can also be strict and very demanding.
Business Visa Types Available for Foreigners
Truth be told, the UK remains a melting pot of various cultures and is well regarded amongst foreign nationals as a place to start a new life and, along with it, a new business. If as a foreigner you are eager to live and do business in the UK, here are visa types to consider;
Innovator Visa
This visa is mainly for individuals who are eager to start an innovative business in the UK. The business is expected to be different from anything else on the market, and an approved body must have to endorse that idea. Eligibility criteria are quite stringent and you will be expected to have access to at least £50,000 in investment funds and show where this funding came from.
You will also need to show you have enough personal savings to support yourself. You’ll be required to show that you’ve had at least £1,270 in your bank account for 28 consecutive days before you apply for, extend, or switch to this visa.
You will need to be fluent and also prove that you can speak, read and write English to level B2 on the Common European Framework of Reference for Languages (CEFR) scale. With this visa, you can stay in the UK for three years and there’s no limit to the number of extensions you can get. You can check the Innovator visa section of Gov.uk for further information on eligibility and requirements.
Start-Up Visa
Just like the Innovator visa, you will be expected to have an innovative business idea that’s quite different from anything else on the market. While there are no mandatory investment funding requirements, you will have to prove you’ve had at least £1,270 in your bank account for 28 consecutive days before you apply for (or switch to) this visa.
In addition, you also have to be endorsed by an authorized body that is either a UK higher education institution or a business organization well recognized for supporting UK entrepreneurs. Nonetheless, you are only allowed to stay for two years and can’t extend the visa, although you may be able to switch to an Innovator visa.
Also, have it in mind that the English language requirement is the same as the Innovator visa (level B2 on the Common European Framework of Reference for Languages (CEFR) scale). Fees can be less exorbitant when compared to the Innovator visa, at £363 to apply or £493 to switch, and there’s the same £55 reduction for eligible countries too. You can check the Startup visa section of Gov.uk for further information on eligibility and requirements.
Global Talent Visa
Also note that you are allowed to apply for a Global Talent visa if you are a leader, or potential leader, in Academia or research, Arts and culture, or even Digital technology. However, your application will have to be endorsed by a notable authority with expertise in your field.
Although the Home Office most often handles this for you, have it in mind that how you apply depends on your field. Note that individuals on a Global Talent visa can be self-employed or directors of companies and can live and work in the UK for up to five years at a time.
Tier 1 (Entrepreneur) Visa
This visa is no longer available to new applicants in the UK; however, those currently in the UK with this visa can apply to extend theirs. Howbeit, you will have to be eligible and also satisfy certain criteria.
- You must have invested at least £200,000 in a UK business (excluding any commercial property or director’s loan), or £50,000 if your initial application was based on having funds from an approved funding source
- You must have registered as a director or as self-employed no more than six months after you were permitted to stay in the UK under the original visa
- Show you’ve been self-employed, a member of a partnership, or working as a director of a business three months before you apply
- Have created at least two full-time jobs that have existed for at least 12 months
You can check the Tier 1 entrepreneur visa section of Gov.uk for further information on eligibility and requirements.
2. Choose a Name for Your Business
Choosing a name of your business is the first port of call when starting a business. When you come up with a name, it is always advisable to run the name via the Intellectual Property Office search on GOV.UK to ensure that the name you choose is not an already trademarked name by another company.
Your business name must not have any profanity in it and it must not be similar to the name of a company that is legally registered at Companies House or else it will not be approved.
3. Write Your New Business Plan
Starting a business in the UK as a foreigner, just as with every other business, requires a viable business plan. Have it in mind that a well-researched business plan will provide adequate information about the viability of the idea.
Owing to that, it is necessary to invest adequate time into researching the market and also arrange your financial forecasts. Even if you already have an existing business, you still have to put together another business plan to direct and accommodate your entry into the UK market.
4. Choose a Legal Structure
The United Kingdom has a wide array of options that you can choose from if you are looking for a business structure to build your business on. When setting up a business in the United Kingdom, You must choose a structure for your business. This structure will define your legal responsibilities, like:
- the paperwork you must fill in to get started
- the taxes you’ll have to manage and pay
- how you can personally take the profit your business makes
- your personal responsibilities if your business makes a loss
You can change your business structure after you’ve started up if you find a new structure suits you better. Business structures that you can choose from include;
Sole Trader
A sole trader is a business-type where one person owns and runs the entire business. It is the simplest business structure you could adopt. It is very suitable for one-person businesses; this includes independent accountants, web developers and gardeners among others.
A sole trader is an individual entitled to all/any profits of the business but is also liable for any debt/damages incurred. In the UK, there are currently over 3 million registered sole traders, and the number is growing with a massive influx of skilled freelancers.
Limited Company
A limited company is a legal business structure, that means a business that is separate from its owners. This means the owners are only liable for any business debts to the extent of the amount of money they have put into the business, thus limiting any exposure for business owners beyond their total investment. There are two types of limited companies you can incorporate in the UK.
Private Limited Company (LTD or Ltd)
In a private limited company, the owners privately hold shares. This is the most common and preferred incorporation structure for most small businesses in the UK. Over 5.2 million limited companies are operating in the UK now.
Public Limited Company (PLC)
In a public limited company, shares are available to the public for ownership and purchase. A public limited company must have a value of at least 50,000 pounds before it can trade as a PLC. PLC is commonly used as a structure for major companies after they make an initial public offering (selling a large portion of their shares in the capital markets).
Limited Liability Partnership (LLP)
An LLP is a partnership structure used by many businesses including vets, dentists, law firms or accountancy firms. An LLP is made up of at least one limited partner and one general partner (there can also be more than one of each), and these partners have different responsibilities and exposure regarding the business. Partnerships in Scotland (known as ‘firms’) are different, and have a ‘legal personality’ separate from the individual partners.
Guarantee Company (LBG)
Guarantee Company (LBG) is a structure used by not-for-profit businesses such as social enterprises that seek a legal structure to operate. This structure is somewhere between a charitable status and a limited company. In an LBG, no share capital is issued, instead, the members act as guarantors for the company. It’s commonly used by trade associations, schools, and other businesses.
The bottom line is that if you have plans to grow your small business beyond yourself (one person) and then sell it, then a Private Limited Company would likely be the most suitable structure for you.
If you are considering operating a mom and pop kind of business, then a Sole Tradership would probably be the best structure to build your business on. But if you have plans to build a business brand that has a significant amount of senior management, capital and that deals in services, then a Limited Liability partnership would be the best choice.
5. Register Your Business
Just like it was noted above, aside from visa requirements, the process of registering or starting a business in the UK is the same for foreigners and UK nationals alike. In the UK, there are no extra immigration criteria to be met or extra fees or charges for foreign nationals. However, to register your business with the Companies House, you’ll need the following:
- A company name (You can find more information on naming your company below).
- Valid ID
- Address for the company.
- One or more directors’ names and details (if it is just you that is fine).
- Details of the company shares, shareholding, and shareholders (with at least one shareholder).
- A Memorandum and articles of association. This is a standard document that shareholders create and agree to that outlines the company’s written rules.
- Detailed information on anyone who owns a significant interest or control in the company (this means anyone who owns 25% or more shares or voting rights in the company).
Agencies in Charge of Registering Business
The agency in charge of registering business and licensing business in the United Kingdom is the company house. Companies House is the United Kingdom’s registrar of companies and is an executive agency and trading fund of Her Majesty’s Government. It falls under the remit of the Department for Business, Innovation and Skills (BIS) and is also a member of the Public Data Group.
All forms of companies (as permitted by the United Kingdom Companies Act) are incorporated and registered with Companies House and file specific details as required by the current Companies Act 2006.
All registered limited companies, including subsidiary, small and inactive companies, must file annual financial statements in addition to annual company returns, which are all public records. Only some registered unlimited companies (meeting certain conditions) are exempt from this requirement.
Legal Documents Needed to Run a Business
- Business Plan
- Confidentiality Agreement
- Directors’ Resolution
- Joint Venture Agreement
- Non-Disclosure Agreement
- Partnership Agreement
- Purchase of Business Agreement
License and Permits Needed to Do Business
When setting up a business in the UK, you may need to apply for a licence, depending on what your business is. Popular licences may include;
- Temporary Events Notice – A Temporary Event Notice is for carrying out a ‘licensable activity’ on unlicensed premises.
- Occasional licence – In the United Kingdom you need an occasional licence if you want to sell alcohol from unlicensed premises.
- Food business registration – Food business registration if carrying out ‘food operations’ in a food business.
- Business license – You will need this to operate any business at all.
How to Register as an Overseas Company in the UK
In the UK, an overseas company is any company that is not incorporated in Scotland, England & Wales or Northern Ireland. Note that any overseas company with a UK “establishment” is expected to register information of both the overseas company and establishment at UK Companies House.
While the rules are explicitly noted in the Companies Act 2006 and The Overseas Companies Regulations 2009 (Regulations), have it in mind that these only apply to overseas companies and not other forms of business vehicles, such as partnerships.
Once an overseas company has established a UK establishment, it is expected to fill and submit a form OS IN01 to Companies House coupled with a copy of its constitutional documents and latest annual accounts (with a certified translation into English if necessary). Note that besides the basic details of the overseas company, Form OS IN01 also warrants that:
- The overseas company pick a name for the UK establishment, and this will have to be used as the overseas company’s name when trading in the UK (note that the overseas company is expected to adhere to trading disclosure rules when using this name)
- Once registered, have it in mind that the Companies House will assign the overseas company with a code beginning with “FC” and each UK establishment will be assigned a “BR” code.
- Appointing an agent or distributor;
- Appointing a franchisee; or
- Incorporating a Scottish or English company as a wholly-owned subsidiary of the overseas company.
- Overseas companies should note that documents filed (such as accounts) are always publicly accessible through the Companies House website.
6. Register For Tax
Once you have completed all the steps above, the last step will be to register for tax. This is, without doubt, one of the most vital steps that require a little homework. In the UK, you are expected to register for corporation tax if you are incorporated, and whatever your structure, self-employed people are also mandated to register as a Self Assessment taxpayer with HMRC.
Once the registration and legal structure of a new business have been decided, it will have to be ‘incorporated’. This simply entails registering with Companies House and HMRC for tax purposes. Forfeiting your tax payment may lead to the closing of your business, which may also affect your residency in the UK.
Once you have registered your company, you should expect the organization tasked with handling the national register of companies – Her Majesty’s Revenue and Customs HMRC – to send you the information required to register your business as it relates to tax matters. The following information will be required:
- Company’s registration number
- Start date of work
- The end date when accounts will be prepared annually
Once you have registered your business for Tax Corporation, it is also necessary that you keep records of the following:
- Annual Accounts of the company, including the profit and loss
- Purchase and sales invoices
- Order and delivery notes
- Bank statements, checkbooks, and electronically evidence of payment received
- Cash books
- Credit notes and debit notes
- VAT records
- Payroll records
- Any other relevant business information
7. Apply for Trademark or Patent for Your Business Name and Brand
As a new business owner, it is important that you apply for trademark or patent for your business especially if you have a unique product or service or business idea or technology or business process. With that, you will legally own your brand and company name, and prevent anyone from making use of your idea without due consultation.
A trademark is a legally registered symbol, word or words representing a business that legally owns it, protecting the business from anyone else using this name or symbol. A patent is an exclusive right granted for a product, invention or process that provides a new way of doing something or provides a new technical solution to a problem.
Please note you will only be qualified to apply for a patent only if you have successfully invented innovative technology or product that could be copied by others. A patent grants your legal ownership of this invention and the exclusive right to it, hence providing your business with the needed legal protection.
8. Purchase the Needed Insurance Policy Cover for Your Business
It will be a grave mistake not to buy insurance policy cover for your business. As a matter of fact, in the United Kingdom, you cannot legally run a business without buying insurance policy cover. With the right insurance policy cover, your business will be protected when unforeseen happens.
The truth is that if you don’t have the right insurance policy in place and when things go wrong, it can threaten the existence of your business and your business can go bankrupt. In the United Kingdom, there are a number of important insurance covers that every business owner should consider buying and some of them are;
Public Liability Insurance (PLI)
PLI protects businesses against losses suffered by people or customers injuring themselves due to the activity of the business. It is one of the most common types of small business insurance. It is of particular importance if you operate physical premises and regularly interact with customers in a third party or business owned premise.
Professional Indemnity Insurance (PII)
PII is for businesses and professionals that provide advice or services to customers. It protects your business against any claims for damages or legal costs which arise due to omission or breach of professional duty in the daily course of operation. It actively protects your business if advice or a service provided negatively affects a customer.
Employers Liability Insurance (ELI)
ELI protects a business that employs staff from financial losses incurred when a staff member experiences a job-related illness or injury. Workplace injuries can be extremely costly for an employer if they are liable. ELI offers protections against this and it’s particularly relevant for business who have many staff involved in physical work on their behalf, i.e. manufacturing, event planning, construction et al.
Product liability insurance (PLI)
Product Liability insurance (PLI) policy cover protects your business from damage to property or personal injury caused by products your business/company has supplied or sold.
Key Man Insurance (KMI)
Key man insurance policy cover protects businesses from the loss of a key employee such as a CEO by paying out a large sum on the event of their death or incapacitation. It is effectively life insurance against anything critical happening to a key employee. If your business is entirely reliant on one employee or a small group, this insurance can often help save the business from bankruptcy in a disaster situation.
Landlord Insurance (LI)
Landlord Insurance policy cover (LI) protects business owners who own property from losses sustained as the result of renting that property. If a business owns its office and rents it out to other companies, this type of insurance will protect you from damages caused by a tenant.
Trade Credit Insurance (TCI)
Trade credit insurance policy cover is an insurance package that protects private companies from their customers being unable to pay back a debt due to bankruptcy, default or insolvency. It’s most relevant for companies that operate under a B2B model and have a range of key customers who use offered credit facilities.
9. Rent or Lease an Office Space
No matter the type of business you intend running, it is the norm for you to operate from an office space; an address that will be linked to your office. It could be operating from your home or renting or leasing an office space. In the United Kingdom, here are the options available to new business owners who are looking towards renting or leasing an office space;
Rent a Co-working Space
Co-working spaces allow you to flexibly rent office space or an individual desk at a relatively low cost compared to traditional serviced or private office options. They also offer an environment designed for start-ups with a great community of like-minded entrepreneurs.
Apply for a Business Accelerator
Accelerator programs provide seed investment, mentorship and office space for a limited time to start-ups and other small companies. If you are a technology business, there are many accelerators where you could apply for in many major cities in the UK.
Rent a Business Incubator Office
If you don’t have enough cash, then one of your options is to rent a business incubator office space. Incubators are effectively low-cost office space that offer some level of community and network. Non-for-profit companies, charities or universities typically run them.
Rent Office Space from Another Local Business
In some cases, there are businesses that have enough office space they may not need. It is not out of place to find businesses subletting office space to other businesses as long as they abide by the terms and condition of the rent agreement
Rent a Serviced Office
Serviced office is suitable for business owners that most probably do not have plans to stay in a location for a long time; they might want to try out their business idea in a location to see if it will fly. No doubt, renting a service office does not come cheap, but you are going to get the comfort and ambiance that will help project your business to high profile clients.
5 Best Cities to Do Business in the UK
- London
- Glasgow
- Manchester
- Birmingham
- Liverpool
10. Set Up Your Business Facility
In setting up your business facility, you are expected to put in place all that is needed to effectively run your business. You need to buy the needed office furniture, create filling system (both online and offline), buy the needed software apps, apply and obtain telephone line preferably landline, install your business signage and install CCTV and alarm system amongst others.
Please note that having a landline number for your business gives your business a legitimate image and it makes it easier for customers to call your office.
Good enough, in the UK, it is easy to set up a business line with your phone package. You can still buy a business landline in London and many other cities in the UK that will route to your mobile phone, allowing you to take calls via that number and make calls online using that number.
As regard business signage, it is compulsory that you must display a sign showing your company name and your registered business address as well as any other address where your business operates in your business premise. You only exempted from this law if your home address is where your business is based.
11. Source for Funding for Your New Business
In the United Kingdom, loads of entrepreneurs have launched their businesses by leveraging on business loans and startup grants. So, if you know you don’t have enough money to bankroll your business idea, you can apply for business loan or start up grant.
Interestingly, the Start Up Loans Scheme was launched in 2012 by the British government. It made available £150+ million pounds of public money to entrepreneurs in the form of a favorable, low-interest loan up to the amount of £25,000. Eligibility and facilitation of a start-up loan are carried out by delivery partners who assess each business plan or business case.
The loan is typically payment free for the initial year where you only pay nominal interest each month, with the bulk repayment starting on the second year and being paid back over as much as five years. Please note that even though the loan terms are very favorable, you are still obligated to the debt hence you must work hard.
12. Develop Your Sales and Marketing Strategy
If you are in business, it means that you have a product or service or a combination of both to sell to you target market. This is why it is very important to ensure that you develop your own sales and marketing strategy.
You should be able to come up with strategy that will help you get a fair share of the available market in the location where you intend selling your products or services. Trust me, the market in the United Kingdom is highly competitive and if you don’t have a workable sales and marketing strategy, you will likely struggle to stay afloat with the business and if care if not taken you will be pushed out of business.
13. Hire the Needed Employees to Kick Start the Business
If you intend operating a standard business in the United Kingdom, you would definitely need a workforce. The truth is that the quality of staff you have will go a long way to determine how profitable your business will be. You might not have what it takes to hire the right candidate which is why some business owners usually contract that aspect of their business to HR and recruitment consultants.
The bottom line is that you must ensure that you hire people that are qualified, honest, customer centric and are ready to work to help you build a prosperous business. Please be informed that employment law in the UK is strict and well set up to protect both businesses and employees and you are mandated to pay each employee at least the minimum wage.
The maximum number of hours anyone can work for an employer in a week in the UK is 48 hours, except the employees agree to work overtime and they will be paid for it. You cannot unfairly discriminate by race, gender, disability, or any other factor regarding recruitment, pay, promotion, access to training, or termination.
So also, if you choose to employ anyone in the UK, you will need to pay several monthly employment taxes on their behalf including national insurance contributions for each employee. These taxes are typically paid via PAYE; this system is the primary method of collecting employment taxes from UK companies by the government. In the United Kingdom, it is mandatory that you provide pension for all your employees.
14. Open Your Doors and Start Welcoming Customers
If you have bee able to successfully carry out step one to eleven, then you have indeed come a long way and it shows that you are truly ready for business. You cannot generate sales from your products or services if you do not open your door for business.
In essence, the last step to take when starting a business in the United Kingdom is to ensure that you open your door for business; launch out with a bang so as to attract people. There you have it; some of the most important steps that you are expected to follow if you want to launch your business in the United Kingdom.
Economic Analysis
Economic growth is projected to continue at a robust pace over the coming years, driven by domestic demand. House prices have continued to rise, although housing supply is edging up. The unemployment rate has stabilised at around 5.5%, and recently wage growth has picked up.
Projected increases in labour productivity should underpin real wage growth. The trade deficit has remained contained, but weak global trade and past currency appreciation are holding back exports. Inflation is expected to increase towards the 2% inflation target as pressures on capacity emerge.
This projection assumes the Bank of England will begin to raise its policy rate, and then raise it gradually through in the years to come to ward off excess demand pressures. The pace of fiscal consolidation has appropriately been smoothed to around 1% of GDP per year and now involves smaller reductions in spending on public services than earlier planned.
However, the decision to significantly lift the minimum wage will increase labour costs, possibly lowering the contribution of employment to GDP growth.
The United Kingdom has made significant progress in its climate-change mitigation efforts. It has established a long-term framework with a unilateral commitment to reduce greenhouse gas emissions to 80% of their 1990 level by 2050, delivered through five-yearly reduction targets. To help reach this ambitious objective at low cost, carbon emissions could be taxed more uniformly by increasing the low implicit rates now faced by some sectors.
Possible Challenges and Threats in the UK
The UK is one of the world’s leading business locations and the number one destination for inward investment in Europe, but growing businesses still face several hurdles when expanding in the country.
It takes an average of 13 days to start a business, with the lion’s share of that time spent dealing with Her Majesty’s Revenue and Customs (HMRC) and registering for a withholding tax on incomes called PAYE (pay-as-you-earn). Although little or no fee is charged, the number of procedures can make the process quite laborious for businesses. Challenges may include
- Dealing with Construction Permits
- Getting electricity
- Registering property
- Getting credit
- Protecting investors
- Paying taxes
- Trading across borders
- Enforcing Contracts and resolving Insolvency
- Cultural barriers
Facts and Figures of the UK That Will Interest You as an Investor/Entrepreneur
The United Kingdom has the fifth-largest national economy (and second-largest in EU) measured by nominal GDP and ninth-largest in the world (and second-largest in the EU) measured by purchasing power parity (PPP). The UK economy currently makes up 4% of world GDP.
The UK has been the fastest growing economy in the G7 for four consecutive years with 2.1% year on year growth in Q1 2016. In 2014 the UK was the ninth-largest exporter in the world and the fifth-largest importer, and had the second largest stock of inward foreign direct investment and the second-largest stock of outward foreign direct investment.
The UK is one of the world’s most globalised economies. The UK economy comprises (in descending order of size) the economies of:
- England
- Scotland
- Wales
- Northern Ireland
The service sector dominates the UK economy, contributing around 78% of GDP; the financial services industry is particularly important and London is the world’s largest financial centre. The British aerospace industry is the second- or third-largest national aerospace industry depending on the method of measurement.
The pharmaceutical industry plays an important role in the economy and the UK has the third-highest share of global pharmaceutical R&D. The automotive industry is also a major employer and exporter. The British economy is boosted by North Sea oil and gas production; its reserves were valued at an estimated £120 billion in 2011.
There are significant regional variations in prosperity, with the South East of England and southern Scotland the richest areas per capita. The size of London’s economy makes it the largest city by GDP in Europe.
- Import and export activity is a main contributor to the economy of the UK. The UK’s trade deficit in goods and services was estimated to have been £4.8 billion in February 2016, a narrowing of £0.4 billion from the revised deficit for January 2016.
- The narrowing of the trade-in-goods deficit reflected an increase in exports of £0.3 billion to £23.2 billion; attributed to a rise in the export of chemicals. In the three months to August 2016, the total trade deficit in goods and services widened by £3.8 billion to £13.7 billion. This is the largest quarterly deficit since the three months to March 2008, when the deficit was £14.4 billion.
- In the three months, the trade-in-goods deficit widened by £3 billion to £34.6 billion. This widening reflects a £1.7 billion fall in the export of goods (of which, oil fell by £0.7 billion and other fuels by £0.4 billion).In the three months to February 2016, trade-in-goods deficit with the EU was £23.8 billion – the widest on record; reflecting a 1.3% decrease in exports and a 1.1% increase in imports.
- The deficit for the previous three months (to November 2015) was £22.8 billion – the second largest on record. Before then, the most recent record deficit with the EU occurred in the three months to February 2015 when the deficit reached £22.4 billion.
- In 2013 the UK was the leading country in Europe for inward foreign direct investment (FDI) with $26.51bn. This gave it a 19.31% market share in Europe. In contrast, the UK was second in Europe for outward FDI, with $42.59bn, giving a 17.24% share of the European market.
List of 10 Well Known Foreign Brands in the UK
British brands are appreciated around the world for their quality and heritage. Many of them, though, are also owned by foreigners. For some “British” brands, it’s well-known they have foreign owners. They include:
- Branston pickle
- Robertson’s
- Rolls Royce
- Weetabix
- Cadbury
- Newcastle brown ale
- Jaguar Land Rover
- Camelot
- Boots
- Raleigh
- Asda
10 Most Popular Indigenous Entrepreneurs in the UK
The United Kingdom has long been a hotbed of entrepreneurial activity, and hundreds of thousands of people in Britain have achieved financial independence by way of starting their own businesses. Even amongst Britain’s many successful entrepreneurs, there’s always a small percentage of people that rise to the upper echelons of high net worth status.
- David and Simon Reuben
- Philip Green
- Sir Richard Branson
- James Dyson
- Laurence Graff
- Alan Sugar
- J.K Rowling
- Duncan Bannatyne
- Simon Cowell
- Peter Jones
List of 10 Well Known Indigenous Businesses in the UK
Almost half of Britain’s biggest City firms are owned by foreign investors but there are few indigenous people who are making the United Kingdom proud.
- Victoria Beckham
- AUDEN MCKENZIE
- Boohoo
- Supergroup
- Bet365
- AO world
- Softcat
- Kelway
- RUFFER MANAGEMENT
- Virgin group
How Brexit Affects Foreign Investors in the UK
The Brexit transition period ended on 31 December 2020, therefore new rules kicked in on 1 January 2021. This simply entails that people from the EU, Switzerland, Norway, Iceland, or Liechtenstein who now want to start a business in the UK are expected to apply for a visa, in the same way as non-EU citizens. There are numerous ways Brexit has affected or is still affecting foreign investors in the UK. These ways include;
Confidence in the UK
Since Brexit, reports have it that the FTSE 100 share index has been fickle, and the Sterling rate hasn’t returned to pre-Brexit levels. According to experts, confidence in UK businesses will continue to be unstable and unpredictable for the foreseeable future, and this has in many ways affected foreign investors. However, there are still numerous legal services available to foreign investors looking to reduce the negative effects of Brexit.
Disruption in Supply Chain
According to reports, a good number of companies stockpiled before Brexit, primarily to skip tariffs for importing EU goods. However, to ensure good relations between UK and EU businesses, it’s necessary to guarantee transparency about any charges or tariffs. Also, note there are logistical problems with the supply chain – delays haven’t been helped by the pandemic of recent years too.
Less EU Restrictions
After Brexit, note that the UK is less restricted by certain EU regulations. Experts believe that Brexit has had a positive impact on the mindset and willingness of foreign investors since they can now trade more freely even with non-EU markets. Presently, the UK is working to put in place new trade agreements with many non-EU countries around the world and this is good news for foreign investors in and outside of the UK.
Becoming an AEO
Have it in mind that foreign investors in the UK can now apply for Authorized Economic Operator status. This more or less means you’ll have an easier time moving goods between countries, as you are seen as ‘trusted’. Note that the HMRC awards AEO recognition, and acceptance depends on things like compliance, records, and dedication to customs. Howbeit, becoming an AEO business can be quite challenging, and smaller businesses may prefer to use a broker or agent.
Opportunity For Growth
According to recent reports, emerging markets like China, South Africa, and Brazil now account for more consumer spending every year. Note that the fall of the pound makes British products cheaper for international markets, which could genuinely increase their demand, and also create a viable opportunity for foreign investors.
However, as a foreign investor in the UK, it is still imperative you research which countries need your products and services and work them into your strategy.
Conclusion
Indeed, starting and running a new business in a foreign land or expanding into new markets like the UK can be a vital growth strategy that a good percentage of businesses need to take. However, you must take your time to research if this is the right move for your business.
Also, remember that there is a vast range of regulations connected with living and working in the UK as a foreign national. Immigration laws are rigidly enforced; therefore ensure you keep yourself updated. Also, consider getting professional legal and financial advice if you are not sure about the process or anything.