What is treasury management? Find out in this helpful guide to companies trading overseas.
The United Kingdom is one of the largests economies globally, with a GDP of over 2.2 trillion GBP in 2022.¹ The UK has been an attractive country to start a business for citizens and immigrants, both in time past and today.
However, changes have begun to occur in the country, making opening a business in the UK a challenge. Nevertheless, foreigners can own a business in the UK today, with a well-executed plan and enough room for optimism.
One of the challenges that foreigners face is the UK's immigration system; recent changes in the immigration system has made it difficult for foreigners to get the appropriate legal document required to incorporate a UK company.
In this article, you will learn how to start a business in the UK for foreigners, how to incorporate a company in the UK, and the necessary information to get your company off the ground.
Before starting a business or launching your idea as a foreigner in the UK, you need to consider the following steps:
Getting a visa is dependent on your nationality; according to gov.uk, there are over 40 countries that need a visa before entering into the UK. You will need a visa before entering the UK if you are from any of the countries listed by the UK government, and more so, a visa to allow you to live legally in the UK and work before starting a business.²
Applying for a visa may seem difficult; however, it is easy with just the right information. There are different types of visas, and it is therefore important that you ask questions to your travel agent and apply for the correct visa. UK visas are usually declined or accepted within three weeks.
Before starting a business in UK as a foreigner, you must find out the kind of business structure that exists and thrives in the country. Find out about the legal position and tax payment of every business structure.
After getting a visa, which makes you legally eligible to start your own business, the second step is to create a legal structure. You must note that the legal structure of your business affects the amount of tax you pay. There are four categories of business structures in the UK³:
Sole trader: the simplest type of business structure available in the UK. There is no difference between the owner of the business and the business. To start a sole trader business in the UK, you need to first register your business with HMRC before the end of the year.
Partnership: business types that involve more than one person managing the company. To open a partnership business, you need to register with HMRC, and both parties must be involved with registering the business.
Limited liability partnership (LLP): the type of business structure where partners have limited liability with the business obligations based on how much they’ve invested in the company.
Limited company: can be limited by shares, so the shareholders liability is based and limited to the money they invested, and their personal assets are protected. Limited companies must pay incorporation costs to get registered by the Companies House.
Opening a business bank account is an important step when starting a business in the UK, in order to keep your personal and business assets separated. Opening a business in UK can be complicated, but getting a business account doesn't need to be!
Wise Business multi-currency account is an amazing alternative to traditional banks, which may have an extended requirements list to open a business account for a foreign. As a digital and flexible alternative to banks, with Wise Business you can send, receive and manage your money internationally, without crazy fees or even-crazier exchange rates – just a small, fair charge when your money moves between currencies. Wise is a safe provider, who is fully regulated.
After selecting your legal structure, you need to register your business with a UK tax corporation. Forfeiting your tax payment may lead to eradicating your business, which may also affect your stay in the UK. After registering your company, the organisation responsible for handling the national register of companies - Her Majesty’s Revenue and Customs HMRC will send you the information needed to register your business as it relates to tax matters.⁴ The following information will be needed:
- Company’s registration number
- Start date of work
- The end date when accounts will be prepared annually
After registering your business for tax corporation, ensure that you keep records of the following:
- Annual Accounts of the company, including the profit and loss
- Purchase and sales invoices
- Order and delivery notes
- Bank statements, cheque books, and electronically evidence of payment received
- Cash books
- Credit notes and debit notes
- VAT records
- Payroll records
- Any other relevant business information
Finally, opening a business in the UK may be challenging, however, the United Kingdom is a vibrant place where business can flourish. If you choose to run this path, Wise can make your life easier - so you focus less on the admin, and more on connecting with customers.
With the Wise Business UK company formation service, Wise can support you from choosing and registering a powerful business name, to registering with Companies House, setting up a handy Wise Business account - and starting to trade. The service is available for single director and single shareholder companies, limited by shares - and can mean your business is set up in anything from a couple of hours to a couple of days.
As well as registering your company, you’ll get a Wise Business account, to hold and exchange 50+ currencies with the mid-market exchange rate, and linked debit and expense cards for easy spending. Get local bank details for 10 major currencies, and send payments to suppliers, contractors and staff in 80+ countries, with the low, transparent fees every time.
- UK GDP 2022 | Statista
- UK visa requirements - GOV.UK
- Choosing the right business structure - Companies House
- Register for Corporation Tax - GOV.UK
Sources last checked March 29, 2023
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from Wise Payments Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
A guide to international treasury management for UK entities, including what it is and best practices.
Are you looking to start a business in Romania? Explore steps, entity types, challenges & opportunities in this guide to success in a thriving market.
In the fast-evolving world of pet e-commerce, one company has ridden to the forefront with its dedication to top-notch care, products, and helpful content...
New research by Wise Business has revealed the reality of international payments for SMEs in the North of England and what this means for expansion plans
Ramp is a partner of Wise and a leading finance operations platform that brings together spend management, price intelligence, and finance automation to help...