Are you a foreign national wanting to start business activities within the UK? We’ve got good news for you; it’s not as difficult as you might think.
The UK is one of the largest economies on Earth. It’s the sixth richest country in terms of GDP, with one of the highest wealth per capita of all the economic superpowers. With a very stable economic system, extensive legal structure and diverse consumer market, every entrepreneur dreams of starting up a UK business.
But if it’s not difficult, how exactly do you do it?
This guide from Mint Formations explains how to start a small business in the UK. We’ll look at how you can start a limited company, the need (or lack of) for an entrepreneur visa and all other factors that international entrepreneurs want to know.
Skip to what you need to know:
- The Benefits of Starting a UK Business as a Foreign National
- Can a Non-Resident Start a Business in the UK?
- Important Things to Know about Starting a Business in the UK as a Foreigner
- How to Start a Business in the UK as a Foreign National
- Start a UK Limited Company Today with Mint Formations
The Benefits of Starting a UK Business as a Foreign National
Are you thinking about starting a business in the UK but not unsure if it’s the right decision? If you’re a non-resident, several benefits come with starting a business in the UK.
Access to European Markets
One of the significant benefits of starting a business in the UK is that you will have access to the European market. With over 500 million consumers, the European market is one of the largest in the world.
UK businesses export over £16 billion of goods and services to Europe annually. So, if you’re looking to tap into this vast market, starting a business in the UK is a great option.
Skilled Workforce
Another benefit of doing business in the UK is having access to a skilled workforce. Over 30 million people are employed in the UK, with a large proportion working in skilled occupations, giving businesses access to a large pool of talented workers.
In addition, the UK has one of the highest employment rates for university graduates in Europe. So if you are looking for highly educated employees, starting a business in the UK may be the right choice.
Low Taxes
The UK also has favourable tax rates for businesses. The corporation tax rate is 20%, which is lower than many other European countries. In addition, numerous tax reliefs and exemptions are available for businesses operating in specific sectors, such as research and development or environmental protection. This makes it an attractive destination for companies seeking to minimise tax liability.
Consumer Credibility
When running a business, building trust with your potential customers is crucial. After all, if they don’t trust you, they won’t hand over their hard-earned cash. One of the best ways to do this is to register your business in the UK. This sends a strong message that you’re a legitimate and trustworthy company.
But it’s not enough just to register your business — you must also ensure your registered address appears legitimate. One of the best ways to do this is to register your business from a London address. A London postcode is a quick and easy way to reassure potential customers that your company is based in the UK’s capital city and is, therefore, likely to be legitimate and trustworthy.
Can a Non-Resident Start a Business in the UK?
Yes. It may come as a surprise, but anyone of any nationality can start a business in the UK.
You don’t need residential status or even to be living in the country. The only stipulation is that the company must be registered to a UK address. This is for accountability and information correspondence, not for legitimising the business’s ownership.
Foreign nationals can easily acquire an address to register with Companies House. This can either be a purchased or rented property, the property of a friend, family member, or anyone who agrees to have your business registered to their address, or a virtual office address. Mint Formations can help you secure an address for your business.
Does a Non-Resident Need a Visa to Start a UK Business?
There is no need for a visa to establish a business in the UK. When you set up a business, you are not required to provide proof that you can work. Does this mean you can start the business and then travel to the UK and work under your own company name? No, it doesn’t.
You can start a business in the UK, but that does not give you the right to work in the UK. For example, you cannot start an electrical engineering business, then forgo working visas and start earning money as a member of the UK workforce. It’s just not possible.
Making Money through Your UK Limited Company without a Work Visa
Work visas give you access to the UK job market. They allow you to earn money as an employed member of the UK job market and enjoy all the perks that come with it. To access this, you must have the proper visa.
But you can still start a business in the UK and earn money from it without a visa. Let’s take a look at how it works.
There are two things you can do. By starting a business in the United Kingdom as a foreigner, you can actively trade goods through that business while working out of your home nation.
An example would be if you live in India and sell fashion products. You can start a business in the UK, register with Companies House and trade under that British brand. Your registered UK business does not make it easier to trade within the UK, as you can already sell to UK consumers from a company registered in India.
The benefit it does offer is that you’ve got a UK company. You aren’t a foreigner trading through a foreign business. You’re a foreigner trading through a British business, which gives your brand more sales power within the domestic market.
The other thing you can do is hire people allowed to work within the UK. They can then make money through your business in the UK, earning you profits on that income. You cannot work without the visa, but since your employees have the right to, they can.
You’ll pay tax on their earnings just as any other business would and corporation tax on business income, but you’ll be able to take a salary from revenue after tax is deducted just like any other UK business director.
Important Things to Know about Starting a Business in the UK as a Foreigner
So you don’t get caught off-guard, be aware of these essential nuggets of information when setting up a UK business.
You Don’t Need a Business Bank Account (But You Should Get One)
It is not a legal requirement for a non-British national to register a business bank account in the UK. However, it is very helpful. If you register for a UK bank account, you can avoid many costs in terms of money movement and fees for local trade.
Having money paid into your domestic bank account is not financially efficient as banks often charge a fee for international transfers — these can take away a big chunk of profit.
We recommend signing up for a UK bank account to improve money management. You should note that applying for more popular banks is difficult for foreign nationals without an entrepreneur visa. If you work with us at Mint Formations, though, we make partnership arrangements with banks to help progress your application and secure you a bank account, including Lloyds and Barclays bank account.
Read our complete guide on how to open a UK bank account.
You Cannot Earn Untaxed Income
When you start a new business in the UK as a foreigner, you are not entitled to the self-employed personal allowance grant unless you have a work visa. This means you pay tax on every penny you earn from your business.
You may also have to pay income tax in your home nation. Tax costs can start to ramp up if you’re not careful about managing your cash. We can put you in touch with expert accounting teams to help you optimise earnings.
If you’d like to know more about tax in the UK, watch these handy, easy-to-understand videos.
You Don’t Have to Set Up Your Business Yourself
The registration of UK companies may appear straightforward, but it can quickly get confusing if you aren’t familiar with the basic legal structure and UK business practice. Starting a business requires applying for numerous government approvals, including from Companies House and HMRC.
If you try to register yourself and make a mistake, you won’t be blacklisted or blocked from ever starting a business as a foreign national again, but you will face slowdowns and related costs.
The best step you can take to mitigate problems with setting up a business in the UK as a foreign national is to employ the support and services of an agent that already has experience with Companies House. Mint Formations can help you register a company in the UK as a non-resident.
Want to know more about formation agents? Read our complete guide to company formation agents for new business owners.
You’ll Want Insurance Set Up after Starting a Business in the UK
Once you open your UK business, you’ll want to grab some insurance quickly. Business insurance is a protective measure that helps you navigate the sometimes turbulent landscape of UK markets. Depending on what industry you enter, you may be liable for more responsibilities than others.
Insurance can give you reassurance and peace of mind that if anything goes wrong, you’ll have support. Registering for business insurance is not essential or mandatory, but if you’re unfamiliar with UK systems, it can be an important safety net.
Ready to set up your UK business? Explore Mint Formation’s non-resident company formation packages today.
How to Start a Business in the UK as a Foreign National
To register a limited company as an overseas national is no different from that of a British national. You have to provide all the same details and file the same documents. There are no immigration hoops to jump through, and the process is free of additional charges for non-residents.
So how do you register a company as a foreign national? First, you’ll need the following:
- Company Name — Every business needs a unique name. You can use the Mint Formations name check tool to find the perfect name for your company.
- Business Address — You must have a UK address registered to your business. If you don’t have access to a UK address, we can help you by registering your business at one of our prestigious London address.
- Director Information — A UK company needs at least one director, although there can be more. Details of this individual need to be gathered and prepared.
- Shareholders — If you are registering as a public trading company, you’ll need to issue shares when you start your business. To do this, you need at least one shareholder and all their details. This can be the director or a different individual.
- Documents of Formation — When registering a business, you need two sets of documents: a memorandum of association and articles of association. These documents are essentially agreements of responsibility by involved parties and arrangements on how the business should be run. At Mint Formations, we’re more than happy to help you put together these documents.
Once you’ve followed the steps of collecting all the information you need, you can move on to registration with Companies House and HMRC. Remember, you can change any of the details above if you need to at any point after you form your company.
For example, the business address you use now can be changed if you move to the UK in the future, or if you decide to sell your business, you can complete a form that allows you to transfer ownership of the business.
Start a UK Limited Company Today with Mint Formations
At Mint Formations, we understand this may all seem very complicated. If you need help setting up your business as a foreign national, don’t despair. We offer complete registration support for non-residents for as little as £129 + VAT.
This covers everything, from registering your business with Companies House and HMRC to providing you with a registered business address and helping you establish a UK bank account.
Discover the perfect service for non-UK residents who want to start a business in the UK.
