If you’re a non-resident in the UK thinking about starting a business, you may be wondering if you’re able to. The good news is that, somewhat surprisingly, there are very few restrictions on starting a business in the UK, so literally anyone can do it.
There’s a massive number of opportunities for non-UK residents to start their own business in Britain. In fact, thousands of UK businesses are run by foreign nationals already, so you’ll be in good company.
But before you start designing your new business cards, there are a few things you should know. To help you get your entrepreneurial dreams off the ground, we’ve put together everything you need to know about UK business formation for non-residents.
Anybody Can Start a UK Company
You might assume that you’d need a visa to start a business in another country. While that might be the case in some countries, you don’t need one to form a company in the UK. This is one of the reasons that many non-UK residents choose Britain as their business base.
If you’re not a UK resident, you can form a UK business without needing an immigration agreement or working visa — unless you plan on visiting or living in the UK. You only need a UK-registered business address to get started. A UK-registered business address doesn’t mean you need to buy or rent property in the UK; you can use a friend or family member’s address, or better yet, get a virtual office address.
It might seem a little contradictory, but while you can own a UK business as a foreign national, you cannot work in the UK without permission. If you plan to move to the UK to start your business, there’s a good chance you’ll need a visa. You can check whether you’ll need to apply for a visa using the UK Government’s visa checker.
Registering Your Business is Easy
Setting up and registering a business in a different country can seem pretty daunting. Fortunately, the registration process for all UK businesses is surprisingly straightforward — for residents and non-residents. If you’re thinking of starting a business in the UK as a non-resident, we’ve outlined what you’ll need to do.
As we’ve already mentioned, you’ll need a UK address to register your company to get started. Companies House, the branch of the UK government responsible for registering new companies, requires all UK businesses to have a UK address. Without a UK address, you won’t be able to register your business.
Once you have a suitable address, the registration process is exactly the same for everybody. You’ll need to provide the following to register a limited company:
- Company name
- Business address
- Information about directors and shareholders
- Memorandum and articles of association.
If you’re not confident about producing the required documents or need a helping hand, there are lots of excellent guides online. Alternatively, you can use a company formation agent who will take care of registration for you.
Get a Digital or British Business Bank Account
One of the biggest challenges when running a British business abroad is avoiding transaction fees on international bank transfers. Most banks will charge transaction fees for currency conversions, which can damage your bottom line unnecessarily.
Getting a British or digital bank account can help ensure that transfer fees don’t damage your company’s profits. A British bank account will allow you to receive money without worrying about conversions. But getting a UK bank account can be tricky if you live abroad, due to international fraud and money laundering regulations.
If you can’t open a bank account in the UK, it’s worth considering a digital or challenger bank account. Digital banks like Fire, Wise, and Revolut offer the same services as a physical bank account without a physical branch. They provide a great alternative to traditional business banking.
Get to Grips with UK Tax
Unless you’re an accountant, tax can be a scary concept — especially if you’re paying it in a foreign country. If you plan to open a UK business, you’ll be liable for UK taxes and need to get up to speed with your responsibilities.
Even for British business owners, tax can get confusing. It’s a good idea to speak to a financial advisor or accountant about UK tax before starting your company. There are four primary types of tax that business owners need to pay in the UK:
- Corporation tax
- National Insurance (NI) for employees
- Pay as You Earn (PAYE) for employees
- Value-added tax (VAT)
While tax might seem terrifying initially, it can be relatively straightforward once you know more about it. It’s also worth bearing in mind that while you won’t be liable for business taxes in your home country, you’ll still need to pay any applicable income taxes.