It can be a daunting task taking the leap and starting your own business in the UK. But when you’re not from the UK there are extra steps required before you can start your business venture. From ensuring you have the right UK visa to registering your business with HMRC there is plenty of preparation required. In this article we will lay out the key steps for a foreigner to start a new business in the UK.
Before you can consider applying for the correct visa and legal status to start a business in the UK, you need a strong business plan. This plan will outline the key ideas behind your future business, how you intend to operate it, your financial projections as well as some insights into the chosen industry which suggest there is a gap for your future business to exploit. By putting one of these together you can, to an extent, prove to the UK government that you have researched this enterprise and that the figures suggest it will be a success. This plan will also be vital in securing additional investment should you require it further down the line.
How to start your own business in the UK
Once you’ve prepared your business plan and are ready to start your business in the UK as a foreigner, you will have to complete the following steps in order to be approved.
1. Check your visa status
Study your current visa status. Depending on what visa you hold and your nationality you may be entitled to an entrepreneur visa which allows you to start a business, buy property or invest in the UK. Alternatively, if you are not entitled for this visa immediately (likely if you are coming from outside of Europe), you will have to apply for a work visa first. However, with Britain’s withdrawal from the EU imminent this could change the regulations for EU citizens and may then require to apply for a working visa too. For up to date advice on this, check out the UK Border Agency website.
2. Decide on your company’s legal structure
What type of business do you want to operate in the UK? You will need to decide on whether you wish to start as a sole trader, in a partnership or as a limited company. This company formation will likely be outlined within your business plan.
By operating as a sole trader you are agreeing to run the business by yourself and be self-employed.
This is a UK business run by two or more people or companies. Each of the partners are equally responsible for the business and share profits and liabilities.
Private Limited Company (LTD)
These companies are operated with at least one director and one shareholder and are a separate legal entity from the people that run the business. The shares cannot be traded publicly.
Public Limited Company (PLC)
These are similar to LTD companies in their structure with the exception that they are able to sell their shares publicly.
There are a range of other types of business legal structures to consider other than the ones listed above. So if your business differs from these in some way, for example being a non-profit, you will simply have to list it as so when you register the business with Companies House.
3. Apply for the correct visa
The UK immigration system works on a points-based system which varies over a range of different tiers. To be able to set up or run a business in the UK you will require a Tier 1 entrepreneur visa. As part of your application, you will need access to the correct maintenance funds, put together a business plan and pass the Genuine Entrepreneur test.
4. Register with HM Revenue & Customs
If you are planning on starting a limited company then you will have to register this with Companies House, which can be done online or by post. Once you’re registered you will have to the register for tax with HMRC to ensure you are paying the right tax for your business. Even if you plan to work from home as a sole trader or freelancer there are still business taxes you will have to pay.
Once this is complete and your applications have been approved, you’re ready to start your business.
If you need help applying for your own entrepreneur visa to start a business in the UK or are looking to become a UK citizen then get in touch with our expert team who are on hand to help. We can aid you with any of you visa or immigration issues to make the whole process smoother.