IN077 - Starting up a Business in the UK

In recent years we have identified an increasing number of individuals and businesses from outside of the UK, wishing to start up business in the UK. The UK is frequently chosen as the first country outside an individual’s normal country of residence in which to expand internationally.

Why is the UK such an Attractive Location for International Expansion?

1. Access to a home market of 59 million people and to the EU market of 380 million people.

2. Respected jurisdiction for access to capital markets.

3. The most comprehensive tax treaty network in the world.

4. Low corporate taxes.

5. Comparatively low employment taxes.

6. Central time zone between the USA and the East, enabling you to deal with the east in the morning and the USA in the afternoon.

7. A legal system that is much used for international transactions.

8. Excellent infrastructure.

Factors to Consider

Starting up a business in a different country requires much greater assistance than starting up a new business in the normal country of residence. In general clients are unaware of many of the rules and regulations, or, indeed, of normal business practice. It is very easy to breach regulations without even being aware that they exist.

Dixcart recognises this, and has built a team in its Esher office who are able to assist clients not only in complying with regulations, but also in taking advantage of the many benefits available to overseas businesses and individuals coming to the UK.

Included in the team at Esher are business advisers, accountants, lawyers, employment specialists, insurance brokers and tax specialists, all with extensive knowledge and experience in assisting international businesses starting up in the UK.

Recommended Steps to Follow

We strongly recommend that any company contemplating starting up a business in the UK should meet with us prior to setting up a UK company or branch of an overseas company. Tax minimisation structures can often be put in place prior to setting up in the UK.

For individuals moving to the UK it is also very important that assets are arranged for maximum tax saving. These opportunities are often lost if not dealt with prior to the move to the UK.

We take care to evaluate our advice from ‘every angle’. Advice, whilst perfectly correct in isolation, if not thought through, can have a negative impact on a business.

A client came to us after having set up a UK structure under advice from some London lawyers. The lawyers had advised that sales would be exempt for VAT, which would mean that they would not have to charge VAT on the sales. Whilst perfectly correct, the business impact of this advice had not been followed through.

It had not been pointed out to the clients that this meant they were not able to recover any VAT that they spent. It was therefore very important to minimise the outsourced expenses, and to do as much as possible within the UK company because this would considerably reduce the VAT. As VAT was not recoverable and was an expense to the business, we had to assist the client in completely restructuring its organisation in the UK.

Comprehensive Professional Services

Dixcart offer a number of professional services, designed to ease and enhance the setting up of a business in the UK:

• We assist in the design of international structures, particularly taking into account tax minimisation and exchange control problems. Structures are not just set up for the UK, but also for any anticipated expansion of the business into other countries.


• We offer advise on the formation of the UK company, or as appropriate the registration of a branch of the overseas company or, occasionally, the formation of a Limited Liability Partnership. We are able to form these and deal with all the registrations etc. in-house. We can check to see if any particular name is available, advise on who the shareholders could be, register the directors and, if necessary, provide a company secretary and the registered office.


• Our lawyers can draw up legal agreements, particularly shareholder agreements where there are more than one shareholder, trade agreements and intellectual property agreements.


• We can liase with insurance brokers to organise insurance for a new business. Public liability and employers’ liability is compulsory in the UK and no business should commence without these. Other typical insurances required include office contents, property, motor, loss of profits insurance and product liability.


• Our employment specialists can assist with recruitment and advise on salary levels. The employment lawyers can draw up employment contracts and all the other paperwork to comply with regulations and minimise the risks taken by the business with regard to employees.


• We have a specialist immigration lawyer who can deal with obtaining the necessary clearance for individuals to come to the UK to run the business.


• A specialist property lawyer, can assist with the purchase or renting of property, making sure that these are dealt with correctly and that risks to the business are minimised.
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• We can also offer accountants and bookkeepers to record the transactions of the company, keep the company’s accounting records, advise on appropriate software and ensure that the company complies with the numerous regulations.


• Dixcart has tax specialists to deal with tax returns, both VAT and corporation tax, run payrolls and deal with employees’ tax matters.


• We can provide both virtual and fully serviced offices.

Additional Services

Whilst we provide a comprehensive range of business services, we are also happy to assist individuals moving to the UK. We are experienced in providing assistance on where to live, how to get children into schools and how to go about everyday normal life in the UK, whether it is “Where are the best restaurants?” or “How do I find a plumber?”

Contact

For further information please contact Laurence Binge in our UK office or speak to your usual Dixcart contact.