Expanding your Spanish business into the UK is a brilliant way to tap into new markets and start earning Sterling. The UK is a dynamic business hub, with a strong support system that entrepreneurs love.
Entering a new market requires careful planning and an understanding of local regulations and business practices. But, with the right guidance, registering your business in the UK can be super straightforward. In this guide, we'll walk you through all the essential info you need to get started smoothly.
Laine Redpath
Things to think about and do when registering your business in the UK:
How to register a business in the UK?
Opening and running a business with a physical presence in the UK, or anywhere else in the world for that matter, creates all sorts of responsibilities. These include keeping on top of your taxes, managing and caring for your staff and maintaining your customer base for starters. Here’s a checklist to work through if you're ready to get started.
#1. Understanding the business structure
Before you dive in, you need to decide on the structure of your business. Common options include:
- Branch or representative office - this allows you to operate as an extension of an overseas company. The branch isn't a separate legal entity, but continues to operate under the umbrella of your existing company. This can be simpler in terms of management, but the parent company will be fully liable for the branch's debts and obligations.
- Subsidiary - a subsidiary is a separate legal entity from your Spanish company. It's typically structured as a private limited company (Ltd) in the UK. This gives you a layer of protection, as your parent company isn't directly liable for the debts of a subsidiary.
- Limited liability partnership (LLP) - this is best for if you plan to have partners inside the UK, as it offers flexibility in terms of profit sharing and management responsibilities.
#2. Appointing company members
You'll need to choose at least one director for your company, who will be legally responsible for its running. For companies limited by shares, you might also need to appoint guarantors that agree to contribute a certain amount of cash to the company if it's needed.
Additionally, you'll need to identify "People with Significant Control" (PSCs). A PSC is someone who owns more than a quarter of the company's shares, holds more than a quarter of its voting rights, or has the power to appoint directors. Any PSC must be recorded and submitted to Companies House as part of your registration.
Memorandum of Association (MoA) and Article of Association (AoA) The MoA is a legal document that all your starting shareholders need to sign to formally agree to starting the company. The MoA is automatically created when you register the company online.
#3. Registering your business
Once you've decided on your company structure, you'll need to register it with the UK authorities. Here's how:
- Choose a business name - The name needs to be unique (check the register here), and you should check that a suitable domain is available for your online presence before you commit.
- Register with Companies House - The UK's company registrar. Online registration costs £12 and usually takes around 24 hours. Paper registration (best for complex company structures like LLPs) costs £40, and can take up to 10 days.
Information required for registration:
- Company name & registered UK office address
- Details of directors and company secretary (if applicable)
- Statement of capital (shares and shareholders)
- Standard Industrial Classification (SIC) code describing your business activity
- Memorandum and Articles of Association (templates are available from Companies House if you don't want to draft your own)
- Register for Corporation Tax - You must register for Corporation Tax within 3 months of starting operations. You can register online using your Unique Taxpayer Reference (UTR), which will be sent to you by HMRC after your company is registered.
#3 Compliance and reporting
Once your company is trading, you'll be required to file annual accounts with Companies House. This includes a balance sheet and a simple profit/loss statement. If you're running a small company, you might qualify for simplified accounts, which drastically speeds up this process.
You'll also need to submit a Confirmation Statement each year you trade. This makes sure your company details are up to date, and costs £13 to file online. If your annual taxable turnover exceeds £85,000 you'll also need to register for VAT.
Finally, if you plan to hire UK employees you'll also need to set up a PAYE (Pay As You Earn) system to manage income tax and National Insurance contributions. This can be done easily through HMRC's online platform.
Check, check and check again
Our biggest piece of advice here is to really take your time with every step before moving onto the next to make sure everything's in order and above board.
Working with a third-party accountant can be really useful at this stage. They'll have lots of experience with UK startup businesses, and can help you work out the fine print requirements and legal hoops you need to jump through.
Importing from Spain to the UK
When you're importing anything into the UK you need to comply with the British customs regulations, which have become extra complex post-Brexit. Here's everything you need to check, do and arrange before you begin importing.
- Classify your goods - Determine the tariff classification for your products using the UK government's tariff guide. This classification will dictate the import duties and VAT you’ll need to pay.
- Get an EORI Number - You’ll need an Economic Operator Registration and Identification (EORI) number to move goods between Spain and the UK. This number is used by customs authorities to track and register your shipments.
- Hire a customs broker or freight forwarder - While this isn't a requirement, a customs broker can help with paperwork and make sure goods comply with customs regulations. They can also help you understand the duties and taxes applicable to your products.
- Arrange transportation - Choose a logistics provider to transport your goods into the UK.
- Prepare shipping documents - Ensure all your documents, including commercial invoices, packing lists and certificates of origin are prepared accurately to avoid customs delays.
- Customs Clearance - If you hire a broker, they'll handle the customs clearance process. If you don't hire a broker, you'll need to liaise with UK customs to make sure you've complied with regulations and paid duty correctly. Once cleared, your goods can be delivered to your UK customers.
How to do E-commerce in the UK from Spain
Utilizing E-commerce Platforms
An online presence is crucial for a successful move into the UK market. Ready-made e-commerce platforms can help you to reach a broader audience and manage your sales more efficiently.
Popular platforms
- Shopify offers a user-friendly interface, excellent customer support and plugins to help international sales run smoothly.
- WooCommerce is a customizable platform that integrates straight into WordPress, which is perfect if you want close control over your site's design and functionality.
- Amazon UK gives you direct access to millions of UK customers. Plus Amazon handles most of the logistics for you through its Fulfilment by Amazon (FBA) service.
Every e-commerce platform is designed to help you manage inventory, process payments and handle customer services as efficiently as possible.
By integrating with one of these platforms, you can streamline operations and enhance your customer experience. Which is invaluable for your brand, especially when you're just setting out.
Digital Marketing Strategies
To succeed in the UK market, you’ll need a robust digital marketing strategy.
Social media platforms, email marketing, and search engine optimization (SEO) can help you to reach potential customers. Focus your content on keywords that UK consumers are likely to use, and consider running targeted ad campaigns to boost visibility.
Customer Relationship Management (CRM)
Start as you mean to go on by setting up a CRM from day one.
A good CRM will help you manage customer interactions and ensure a seamless purchasing experience for your UK customers.
Platforms like Salesforce, Hubspot and Zoho CRM are all great options, depending on your requirements. Each will help you to manage your sales pipelines and automate your marketing.
Integrate your CRM with your e-commerce platform to better track customer purchases, manage returns, and personalize your marketing as closely as possible.
Ideally, all your support communications for UK customers should be in British English. Any phone numbers listed on your website should be British, and your support hours should align with UK time zones for a slick customer experience. All of these little micro-details are crucial when you're trying to build up brand trust and a loyal customer base.
You should offer multiple channels for customer support including email, phone, and live chat. Try to respond promptly to messages and resolve issues efficiently. Excellent customer service can set you apart from competitors and enhance your reputation in the UK market.
Managing Currency Exchange and Payments
Currency Exchange Solutions
As you start earning in Sterling, it's essential to efficiently manage your currency exchange to minimize costs and maximize profits.
Business accounts like wamo offer competitive exchange rates and low fees, designed to help you save on currency conversion costs.
Streamlining Payments
A payment gateway is a service that authorizes credit card or direct payments on the behalf of e-commerce businesses, ensuring that funds from your customers reach your account smoothly.
There are a few payment gateways you can choose between to process online transactions. To choose the one that's right for you, you should consider:
- Compatibility - Ensure the gateway integrates smoothly with the e-commerce platform you've chosen. Popular options include Stripe, PayPal and Square. Each offer compatibility with all the e-commerce platforms we mentioned above.
- Currency support - Since you'll be operating in both Spain and the UK, choose a gateway that supports multi-currency transactions to accept payments in both Euros and Sterling.
- Fees - Compare transaction fees, setup costs and additional charges. PayPal is known for its ease of use, for example, but it does charge higher fees for international transactions over other gateways.
- Local payments - In the UK, many customers prefer using local payment methods like Apple Pay, Google Pay or even bank transfers through BACs. Ensure your gateway supports all these to keep conversion rates low and customers happy.
A wamo business accounts integrates easily with all the gateways we've mentioned here, giving your customers seamless transactions, and giving you smooth payments.
Managing Returns: Exporting Goods Back to Spain
Handling returns is part of running any goods business, and it's becoming increasingly critical. In the event that a UK customer needs to return one of your products, you'll need a process in place to export those goods back into Spain.
Return Policies
Establish a clear, efficient and customer-friendly returns policy before you ever begin selling. The policy should outline the conditions under which returns are accepted, the timeframe for returns, and who's responsible for the costs to ship a returned item. Even if you've chosen to structure your business as a branch, your returns policy will still need to comply with British consumer protection laws.
Re-Importation to Spain
When goods are returned from the UK, they must be re-imported. This involves:
- Customs declarations indicating that the items are returns (so you don't pay a second round of import duty)
- Proof of export and import to reclaim any duties or taxes
- Logistics partnership to ensure that the goods are transported efficiently and that all the paperwork is up to scratch
- VAT reclaim if applicable.
How to open a UK business account from Spain
Even though it's become easier over the past few years, expanding your business into the UK involves a long list of legal and administrative legwork.
If you prefer to focus on growing your business, rather than getting bogged down in the bureaucratic complexities of UK regulations, you might want to consider outsourcing the whole company registration process.
Benefits of Hiring an External Company
Hiring an external company to handle your UK company registration offers a few advantages:
- Expertise and knowledge - Professionals who specialize in company formation are armed with in-depth knowhow of regulations and requirements. They'll ensure your business is set up correctly and is fully compliant from day one.
- Time-saving - The registration process can be time-consuming - doubly so if you're unfamiliar with UK procedures. Outsourcing saves you time, letting you focus on your core business activities.
- Avoiding mistakes - Errors in company registration are easily made, and they can lead to fines, delays and even legal issues. External companies have the expertise needed to handle everything for you while avoiding common pitfalls.
- Cost-effectiveness - While outsourcing obviously costs money, the efficiency and accuracy of the pros can save you money in the long run by side-stepping costly mistakes.
When you're looking for a company formation agent, look for someone with a solid reputation, who offers a range of services at a competitive price point. Choose a company that provides the customer support you need, including access to advice on UK business practices, and quick assistance to resolve any issues.
İlayda Birol
Start doing international business locally, with minimal hassle
If you're a Spanish entrepreneur, freelancer or small business owner looking to expand your international presence without actually moving, the UK is a great starting point.
The UK economy is developed and the business scene is filled with talented people and interesting companies. You can easily start doing international business in the UK like a local, from the comfort of your home in Spain. Here are some things to think about as you get started:
Setting up your new company in the UK: We’ve gone into the detail on choosing a UK company structure and registering with Companies House. This is, though, only one of the options open to you.
Laine Redpath
Incorporating your existing Spanish company into an existing British entity: If you've already got a Spanish business up and running, and want to branch out to the UK, you can incorporate your company into an existing or new British entity. Many of the regulations are the same as setting up a new company in the UK, and third-party services can walk you through the process of doing business in the UK from Spain.
For companies facing Brexit-fueled complexity, integrating your Spanish company into a UK entity can streamline cross-border operations. It may also make future mergers and acquisitions smoother, and enhance your company's market reputation.
Registering yourself as self-employed: As a freelancer, you can operate in the UK as a sole trader. You'll need to register with HMRC within three months of starting to trade, set up National Insurance contributions, and file an annual Self Assessment tax return to report your income.
Open your business account with wamo in just 10 minutes
Getting started as an international businessperson is easier than it's ever been, especially with a business account like wamo on your side.
You can use a traditional bank like Lloyds TSB, HSBC or Barclays as your British bank account, but setting up an account is laborious, long-winded and costly. With wamo, you can open a UK-based business account in less than 24 hours, without the need for a UK address or phone number. Here's why a wamo account is helpful:
- Multi-currency accounts - Hold balances in both Euros and Sterling - ideal for cross-border freelancers as it minimizes currency exchange fees.
- Ease of setup - With no need for a UK address, setup is quick and easy. This is particularly useful for freelancers who are working remotely or travelling back and forth between Spain and the UK.
- Payment solutions - wamo integrates with your e-commerce systems to ensure you get paid quickly and securely, supporting all the payment methods you need for easy payment.
- Expense management - track your income, collate your expenses and effortlessly prepare for tax season with a wamo account. Stay organized, stay compliant.
As a financial management service provider and a payments platform in one, wamo is much more than a traditional institution. Our services and features are streamlined to best suit small businesses and entrepreneurs, with human-centered support available at every step of the way.
You can open a business account from Spain with wamo by downloading wamo Business from Google Play or the App Store, or directly from the wamo website. Once you're set up, you can access wamo from your browser or in the app.
Our flexible payment tiers make it easy for you to choose the plan that's perfect for you and your team, and no credit check means there's literally no downside to applying for a wamo account.
We're absolutely dedicated to providing the best customer services on the market, supporting and empowering you along your entire business journey. We hope this article has helped you to understand what's involved with expanding your business into the UK. Please reach out to our Support Team at support@wamo.io, or via the wamo website live chat if you've got any questions, or want to share your own business insights.
