Companies House has announced a number of updates on the process for setting up a business in the UK as an international entrepreneur. With the flexible requirements of the government and local opportunities for foreigners, the country has seen a huge hike in international businesses applying to open or expand their businesses in the UK.
The easiest way for international entrepreneurs to start their own business in the UK is by starting a limited company. A Limited Company has many benefits over forming as an individual, such as greater tax efficiency and protection from help-to-buy schemes like those available for young people starting out on their own. The process of setting up a limited company can be done online using Companies House's online services or by contacting their local office.
In this blog, we'll walk you through how to form a company remotely, in general, in the UK.
Minimum requirements to register a UK business remotely.
There are a few minimum requirements you will need to meet in order to register your business remotely. This includes establishing evidence of an active trade or professional engagement, such as contracts or letters from customers.
In the UK, you can register a business regardless of where you live or what passport you hold. There is, however, a requirement for a UK physical address.
1) If you don't live in the UK, you can get around this problem by getting a:
- A friend’s address
- A family member’s address
- Property that you may have purchased or rented in the UK
- A virtual office address.
2) Regular documents that you will need to apply for a business account and company registration.
3) Company registration application fee of £12 and £40 in case of postal registration.
4) A company that hires employees must have Employers' Liability Insurance. Additionally, some professions require Professional Indemnity Insurance, which protects you from liability during the course of your duties.
5) As an international business owner in the UK, you will have to pay taxes to the government and so it is important to register your business as soon as possible. The taxes you will have to pay depend on your company’s taxable income, your residence etc. Additionally, the tax you pay on dividends also differs as per your country of residence - There are many tax treaties that affect how much tax you must pay on dividends in both the UK and your country of residence.
Is the UK good for starting a business?
There are a number of reasons why the UK is a good place to start and run your own business. First, the government has many flexible requirements for setting up and running a business, making it easy for locals and everyone else alike to get started. Additionally, there are abundant local opportunities for the international crowd looking to invest in businesses or create their own ventures. The cost of applying for a company is also relatively low, which makes starting and expanding a business easier than in some other countries.
When we talk about the demand for your products and services, the UK is one of the most important markets that always have space for the blooming industries like tech, healthcare, fintech, E-commerce, food and beverage and more.
Moreover, multinational companies have ranked it as the number one destination for foreign direct investment. This means that there is great potential to attract investors and business personnel from all around the world to start or grow a business in the UK.
Best way to open a business in the UK
The most common types of businesses internationally favored in the UK are sole proprietorships and limited liability companies (LLCs). Sole proprietorships are simpler and easier to set up than LLCs, but both have significant legal advantages. For example, a sole proprietor can globally trade under his or her own name without having to establish separate businesses in each country, while an LLC enables its members to share certain legal liabilities.
To open a business in the UK:
- Complete an online application form with government agencies such as HMRC (the Department for Business, Innovation and Skills) or Companies House;
- Pay fees;
- Submit documents such as a business plan, Memorandum and Articles of Association and ID card or passport;
- Get your business account set up to meet taxation requirements, save your conversion and international transfer fees and manage all other financial matters in place.
Important to note: In the UK, you are required to follow all tax filing laws
It is important to keep in mind that starting a business in the UK involves following all of the necessary tax filing laws and operating on a legal structure. Failure to adhere to these laws can result in significant penalties, including fines and imprisonment. For example, you must file annual financial reports with HMRC, declare any capital gains or losses on your income taxes each year, and pay applicable VAT (value-added tax) rates. You should also make sure to get legal advice about taxation matters before beginning your business venture so that you are fully informed about all of your obligations.
As a new entrepreneur running a business in the UK, the process can sometimes get confusing or is more complicated than you would think.
Ready to open a business account in the UK?
After you're done with all the company registration process, now it's time for you to get your business account. While opening a business account in the UK may seem easy, it's important to remember that you still need to comply with various legal procedures and financial services system requirements. You might need to prove your business' financial stability, your ties with the UK, and your business' purpose for needing a UK business account.
Through wamo's multi-currency account, you'll be able to get the best out of UK's business opportunities and e-services, without having to worry about the hassle of managing multiple accounts in different countries. With wamo, you can focus on what you're good at - running your business.
Register wamo today and start growing your business instantly.