Starting a business in the UK: A guide for Indian residents with requirements, fees, and opening a UK business account

With its deep ties with India, the UK can be a great place to consider starting a business. The UK, which includes Wales, Scotland, England and Northern Ireland, has one of the largest GDPs in the world and London is a hub for entrepreneurs. And while non-citizens can technically open a company, there are requirements to meet. Learn more about what you may need to have a business in the UK and what you can expect from the process.

Table of contents

Can you register a company in the UK from India? Different types of companies in the UK Sole Trader/self-employed Limited company Business Partnership Social Enterprise Requirements to start the UK company from India What does it cost to run a UK company? Starting costs for setting up the company Taxes and Government Fees VAT Starting a business account for a UK company Moving to the UK from India Startup / Entrepreneur Visa Program

Can you register a company in the UK from India?

Yes, technically you can register a company in the UK from India. You can complete the process yourself or hire an agent to help you at a cost. The UK allows for company registrations online or by post.

If you already own a company in India but want to set up a business in the UK, you must register with the Company House. You can do this by completing Form OS IN01 and the guide to completing the form is available online. A local permanent representative and an application fee payment of £20 are required. This option is best for corporations or mature companies that are looking to be established in the UK.¹

Registering a business in the UK can help you reach a new market, provide legal protections for your business and build credibility for your firm. You can contact the Department of Business and Trade to get more information and support.

If you don't have a business yet and are looking to start a new company in the UK, the first step is to figure out what type of business structure is the best fit for you. Check out the next section to learn about the different types of structures available in the UK.

Different types of companies in the UK

There are four main types of business structures you can open in the UK:

Sole Trader/self-employed

This type of company is a business that is owned and operated by only one person. Sole traders tend to be self-employed and the business is not a separate taxable entity. The owner is personally responsible for all parts of their business, including profits and losses for tax purposes. To start a sole trader business in the UK, you do not need to register with Companies House, but you will need to register for self-assessment with HM Revenue and Customs (HMRC).

If you are self-employed but have earned more than £1,000 in a fiscal year, you will need to be set up as a sole trader.²

This is easiest to set up when compared to the other options and can be a solid choice for freelancers.

Limited company

A limited company is where the business is separate from its owners, unlike a sole trader. There can be more than one owner and they have limited liability, which means that they are not personally responsible for the debts of the company.

Limited company businesses need to register with Companies House. You will need to provide information about your company, such as its name, address, and directors, and pay a registration fee. This is a relatively simple process and can be done online.

Once your company is registered, you will need to open a corporate bank account in the UK. Overall, a limited company is more expensive than a sole trader and has more paperwork, but owners are personally protected to a certain extent from the business.³

Business Partnership

A partnership is where you and your partners share responsibility for the business. You can have more than one partner and another company can be considered a partner too. Each partner shares the profits and is taxed accordingly. Partnerships require an agreed-upon written agreement which decides how the business is split up.

Business partnerships are required to register with the HM Revenue and Customs (HMRC) online. You are also required to appoint a nominated partner who is in charge of tax returns and maintaining business records.

Partnerships can be set up in different forms like a Limited Partnership or a Private Fund Limited Partnership (LP), for example.⁴

Social Enterprise

Social enterprises gained popularity in the UK so if you are interested in opening a business that also helps people or communities, you can consider a social enterprise. A social enterprise can be in the form of a limited company, sole trader or business partnership, as well as a charity or cooperative. If you intend not to make a profit, then an unincorporated association can be a better structure instead of a business. ⁵

Most private businesses fall within the first three structures. Choose a structure that matches your business size, employees and current and future needs.

Requirements to start the UK company from India

One of the key aspects of starting a UK company is having a National Insurance Number(NIN). A National Insurance Number is to connect your taxes and insurance to you, and is available to anyone who is:⁶

• Living in the UK
• Has the right to work in the UK, or
• Is working, looking for work or has an offer for work.

Anyone living in the UK with the right to work will easily meet the requirements to open a business. And if you are in or from India and have the right to work in the UK, you can technically start a UK company as well although the process may take longer from abroad. If you don’t meet any of the criteria, you won’t be able to start a business in the UK.

If you have a NIN, here are the main steps to start a company in the UK:

1. Choose a business structure: Find the business structure that works best for you and your business. While sole traders are easier to set up, limited companies offer personal liability protection.
2. Choose a company name: Your company name must be unique and not already in use by another company in the UK. You can search for business names that are already taken on the Company name availability checker.
3. Register the company: You can register the company online through the UK government's website if you are a business partnership or a limited company. Sole traders will need to register through the HMRC.
4. Open a corporate bank account: Once your company is registered, you will need to open a corporate bank account. You can open a corporate bank account with any bank in the UK.
5. Apply for any necessary licenses and permits: Depending on the type of business you have, you may need to obtain certain licenses and permits to operate.

Companies and partnerships will also need to appoint directors and nominated partners before being able to register the business. Do your research, prepare documents and comb through the UK government website beforehand to make sure you have everything you need before you register.

What does it cost to run a UK company?

Like other geographies, the operating costs of a business in the UK depend on its size, market and structure. Here are some common cost categories when running a business in the UK:

• Employee salaries and benefits: Generally the largest expense for a business, employee salaries and benefits can differ depending on where the business or personnel reside. Employees in London are likely to require a larger salary than employees in rural areas.
• Rent and utilities: The cost of rent and utilities will vary depending on whether you and your employees Work From Home, or if there is an actual office.
• Equipment and supplies: Businesses need to invest in equipment and supplies, such as computers, furniture, and office supplies. Many businesses provide computer equipment to staff who are working from home.
• Marketing and business development: Employees for business development, online ads and social media are all expenses that can fall under this category.
• Taxes: Whether through your personal or business entity, ensure that your taxes are paid on time.

You may have additional costs if you have overseas suppliers or teams, export or import shipments from India.

Starting costs for setting up the company

Compared to other countries, the costs of registering a company in the UK can be low. Here are the registration costs when filing with the Companies House:⁷

	Amount in GBP	Amount in INR*
Company incorporation (online)	£12 GBP.	₹1,218 INR.
Company incorporation (By paper)	£40 GBP.	₹4,059 INR.
Limited liability partnership (LLP)	£40 GBP.	₹4,059 INR.
LLP confirmation statement online fee (required for the first confirmation statement filed each year.)	£13 GBP.	₹1,319 INR.
Limited partnership	£20 GBP.	₹2,029 INR.
Private fund limited partnership (LP)	£10 GBP.	₹1,015 INR.
Overseas company incorporation	£20 GBP.	₹2,029 INR.

*As of 16 October, 2023.

There is no cost for Sole Traders to register with the HMRC. Businesses registered in Scotland may have additional fees.

Taxes and Government Fees

Sole traders are expected to file and pay for their income taxes by Self Assessment through the HMRC. It can be completed online and there is a penalty and interest if you don’t file and pay on time. The bill is usually due by 31st January. ⁸

Companies are required to file a tax return, even if there is a loss or you don’t have any Corporation Tax to pay. The tax return can be filed by an accountant or yourself, and there is a penalty for filing late. ⁹

If you have an overseas business registered in the UK, you must file a tax return with the Companies House. The fee is £20 to file.

VAT

Your business must register for VAT if your total VAT taxable turnover for the last 12 months was more than £85,000 or you expect it to be in the next 30 days. If your turnover is less than £85,000 in the UK, you can choose to register for VAT voluntarily.

Registering for VAT is required, no matter the turnover, if your business meets any of the following:

• you’re based outside the UK.
• your business is based outside the UK.
• you supply any goods or services to the UK or expect to in the next month.

You can register for VAT online. If you are late to register, you will need to pay the VAT on sales backdated to when you started meeting the requirements.

The UK government has a guide on how to know if you qualify and register for VAT. ¹⁰

Starting a business account for a UK company

A UK company will need a business account to separate payments from the owner’s personal bank accounts.

The first step is to find a bank that is a good fit for how your business operates and its size. While larger banks can be a good idea for companies that can meet any minimum requirements, a smaller local bank for a small business can be better for a hands-on approach and opening an account with a smaller balance. Some UK banks will also provide services specifically for entrepreneurs or startups.

Make sure you have your business registered, a UK proof of address and identity documents for the business owners ready when opening an account. You can open an account online for most UK banks or go to a branch in person.

A business account can pay local expenses like employee salaries, earn revenue and make international transfers, especially if working with India or other countries. But watch for transfer fees and exchange rates with mark-ups that can eat into your money.

If you want to save on international transfers for your business, check out the Wise Business Account.

Meet Wise Business

With an award-winning mobile app and low-cost transfers, managing a global company just got easier with the Wise Business Account. Wise Business account enables you to send seamless global transfers and get bank details for multiple currencies in a single account. So now you can make payments to your distributed team or freelancers, wherever they are, and provide account details for clients to make payments in the currency easiest for them.

Our online process lets you open and verify your UK business account from India. With our commitment to providing a seamless digital experience, Wise offers an ideal alternative to traditional banks for your business abroad.

Business categories supported on Wise 👉

Moving to the UK from India

One of the biggest hurdles Indians may find when trying to start a business in the UK is having the right visa. You will need to have the right to work in the UK - which means you can’t start a business if you are on a tourist or visitor visa, and generally most student visas too.

The India Young Professionals Scheme is a visa that allows Indian citizens between the ages of 18 and 30 years old to live and work in the UK for up to two years. This scheme also means you can start a company and be self-employed. You will need to meet certain requirements to apply, pay the application fee and a healthcare surcharge and have at least £2,530 in savings.¹¹

Startup / Entrepreneur Visa Program

The UK offers founders and entrepreneurs a path to starting a company in the UK with the Innovator Founder visa. It requires having a business idea that is innovative, scalable and new to the market or having your idea endorsed by the appropriate organizations. This visa costs £1,191 if you apply from India.¹²

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This article is intended to solely be an overview and not offer personal, financial, business or immigration advice. Each person and company are unique so consult professional advisors in India and the UK before making decisions for your company or yourself.

Sources used for this article:

1. Register as an overseas company - GOV.UK.
2. Set up as a sole trader - GOV.UK
3. Set up a private limited company
4. Set up a business partnership
5. Setting up a social enterprise - GOV.UK
6. Who can apply for a National Insurance number - GOV.UK
7. Companies House fees - GOV.UK
8. Self Assessment tax returns: Overview - GOV.UK
9. Company Tax Returns: Overview - GOV.UK
10. VAT
11. India Young Professionals Scheme visa: Overview - GOV.UK
12. Innovator Founder visa: Overview - GOV.UK

Sources verified on 4 November 2023.

Cover photo by Stephen Dawson on Unsplash.