United Kingdom - Establishing an Office UK - Establishing an Office
There are several steps to consider when establishing a local office in the United Kingdom. The process is generally straightforward and can be achieved in a relatively short space of time. The steps to consider are:
Decide on legal structure
- Why: Your commercial aims will determine the type of operation that you need to establish and help define your legal and tax status.
- How: There are two options: a UK private limited company, known as a subsidiary (separate legal entity), or a UK branch of your overseas company, known as a UK establishment (no legal identity distinct from the parent company).
- Timescale: n/a.
- Why: Under the Companies Act, an overseas business in the UK must register a UK establishment when it has some degree of physical presence in the UK (such as a place of business or branch). You can only make immigration applications for inter-group transfers (Tier 2) if you’ve set up your UK entity as either an establishment or subsidiary.
- How: To register a business, mandatory documents such as the “Memorandum of Association” and “Articles of Association” must be filed online with Companies House. The cost of doing this is £30 ($29). A professional advisor may also undertake this for you.
- Timescale: 1 day.
- Why: If you plan to transfer a non-European employee from an overseas office to set-up and run your new UK operation, that person should apply for a sole representative visa before you start trading in the UK. Sole representative visas are usually granted for an initial period of three years.
- How: You must apply online for a Representative of an Overseas Business visa. A Representative of an Overseas Business visa costs £683 (about $889). You’ll need to have your fingerprints and photograph taken at a visa application center as part of your application. You may be able to get your visa faster or other services depending on what country you’re in – check with your visa application center.
- Timescale: 3 weeks.
- Why: If you are intending to trade in the UK, then a UK bank account will be needed. Not only does it give your business credibility in the UK, but if you have numerous transactions it will be cheaper to handle these locally, rather than through overseas bank transfer which are invariably costly. In addition, (should you need to be VAT registered), having a UK bank account accelerates the process.
- How: When setting up the business bank account you will need to bring along the following: Business customer application form, Mandate for companies registered under the Companies Act, Registration of the company, identification and verification of address, company structure chart, bank statements and audited accounts. No matter where you intend to locate your business, you should contact the central inward investment banking team, usually located in London. Do not apply through a local branch, online or a call center. Tell the bank that you have foreign shareholders and/or directors of your business and that you need a UK business bank account.
- Timescale: 3 weeks – 3 months.
- Why: VAT – You must register for VAT with HM Revenue and Customs (HMRC) if your business’ VAT taxable turnover is more than £85,000 ($115,700). Corporation Tax – Any company with a UK branch or office must pay UK Corporation Tax on company profits. You must give HMRC specific information about your company within 3 months of starting up in business.
- How: VAT – Most businesses can register online. By doing this you’ll register for VAT and create a VAT online account. You need this to submit your VAT Returns to HMRC. Corporation Tax – You can do this online once you’ve got your company’s Unique Taxpayer Reference (UTR) – sent usually within a few days of the company being registered.
- Timescale: 2 weeks – 2 months.
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Why: As an employer, you are responsible for paying your employees’ tax and you normally must operate pay-as-you-earn (PAYE) as part of your payroll. PAYE is an HMRC system to collect Income Tax and National Insurance from employment. Employers must provide a workplace pension scheme for eligible staff as soon as their first member of staff starts working.
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How: Register as an employer with HMRC and get a login for PAYE Online. You must register before the first payday. Register as an employer with The Pensions Regulator online.
- Timescale: 2 weeks.
- Why: For companies setting up in the UK, the key property decision is whether to rent premises (known as “leasehold”) or to buy premises (known as “freehold”).
- How: The British Government inward investment agency, Department of International Trade (DIT) will be able to assist with a detailed property search – finding the right option that works for you.
- Timescale: Dependent on property option taken (>1 week) Signing the lease/buying the property (1-4 months).
- Why: To be successful in the UK, you need to recruit and develop the best staff.
- How: Several options exist for recruiting staff in the UK. DIT can help with introductions to recruitment agencies that can assist with the recruitment process.
- Timescale: 6-16 weeks (dependent on position).
- Why: In the UK, insurance protection is compulsory to cover you against a number of risks. You must arrange insurance as soon as your new company employs staff. UK law requires that you hold Employers’ liability insurance and commercial motor insurance. Other insurance to consider includes assets, income, liabilities, people and other risks.
- How: Insurance can be provided from a number of operators in the UK. DIT can help with introductions to commercial partners who can process these requests.
- Timescale: 2 weeks – 1 month.
Additional information for overseas companies looking to set up in the UK should contact the Department for International Trade.
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.