Have you ever wondered why the UK is the first choice of companies be it start-ups, small businesses, freelancers, construction industry to establish their business compared to other European countries?
The reason is simple for International companies to re-locate to the UK:
- Get access of new and existing customers
- It offers better opportunities to develop new products
- Easier of finding new suppliers and partners
- It gives an edge in doing business in other European countries
Another big advantage is companies that are located in the UK can easily connect with more than 500 million consumers across Europe.
Additionally, no duties are applied on products imported or exported within the European Union (EU) . Free or favoured trade agreements also allowed in the UK with many non-EU countries. The UK also allows ease of doing business as compared to other major European economy.
The UK as per International Businesses
1. Business Opportunities in Various Sectors
The UK offers investment opportunities in diverse sectors:
- Advanced manufacturing
- Asset management
- Electronics and IT hardware
- Energy generation
- Financial technology
- Food and drink manufacturing
- Information Communications Technology
- Life sciences
- Marine energy
- Offshore wind
- Oil and gas
- Rail industry
- Space technology
- Waste management
2. Tax in the UK
2.1 20% Corporation Tax rate
Corporation tax is 20% currently in the UK. Amongst the world’s largest 20 economies that are in G20, the corporation tax in the UK is the joint lowest. There are double taxation agreements in the UK through various treaties it has with countries. Most of the companies that are based in the UK will not give Corporation Tax on foreign dividends.
2.2 Indirect taxation
Most goods and services supplied in the UK attract Value Added Tax (VAT), the rate of which is 20% currently. VAT is also applicable on goods imported or purchased. When a company’s taxable revenue goes beyond certain limits, it has to charge VAT.
2.3 Research and Development (R&D) tax credits
Companies that are concerned in R&D have tax credits. They pay lower corporation tax rates. On work related R&D, companies are allowed 100% deduction of corporation tax. The companies that are larger in size may get more deductions from their taxable income, which is 30% of their current expenditure on qualifying R&D. SMEs are entitled to more deductions from their taxable income of 125% of the existing expenditure or eligible R&D
42.4 Patent Box
Lower rate of corporation tax of 10% on incomes gained after 1 April 2013 can be applied by companies from patented invention and some assured creations. If your company pays corporation tax and generates profit by taking advantage of patent creations, you can also benefit from the Patent Box
Requisites for your company
- own the patents or entirely license-in them
- arry out qualifying development on them
3. Skills and Recruitment in the UK
The UK has a workforce of more than 30 million people, which is 2nd largest labour force in the EU. In the next 15 years, the UK is one of a few EU countries that are expected to increase its labour supply capacity.
The UK has:
- An efficient workforce with strong skills
- The UK labour market is flexible
- There are regulations to protect employees
Flexible labour law in the UK means the companies can employ staff as per their business requirements. If labour costs in the UK are very reasonable as compared to other countries in the Western Europe. This is assisted by contribution of low employer social security. The overall cost of labour in the UK is lower than other European countries, for example Netherlands, France, Ireland and Germany.
3.1The Employment Guide of People in the UK
Jobcentre Plus networks can be of great help if you are looking to recruit people. You will get free service that will also include guidance on:
- How to advertise for jobs
- Filling the vacant positions
- Methods and procedures of recruitment
- Availability of suitable applicants
- Guide to employ people with physical or mental disabilities
4. Assistance from the Department for International Trade
Overseas companies and investors that are planning to locate or invest in the UK can contact the Department of International Trade, which can help them with number of free services that includes:
- Market research
- Advice on taxes
- Help you in applying for visas and entry to the UK
- Searching for right employees
- Assist you in your entrepreneurship
- To identify opportunities in the markets of the UK and Europe
- Can help you introduce to the right people
- Establishing business in the UK
- Finding out the right location for your business
- Support from the ongoing government after setting up in UK
For any assistance, overseas companies and investors can contact the Investment Services Team for information about setting up in the UK.
5. Developing Infrastructure in the UK
Strong infrastructure is one of the most important factors for a business to be successful. Some of the big infrastructures projects are in:
5.1 Improvement in Transportation
The transport system of the UK is being helped by a £120 billion investment programme.
The UK already has the:
- Most developed rail network in the European Union
- Second largest ports industry in Europe
- Europe’s largest air transport system
The UK has planned 7 year investment programme to make improvements in its road network. This will make moving people and goods easier in and out of the UK.
The major rail projects include:Crossrail
To bring an additional 1.5 million commuters within a 45 min commuting distance of Central London, the UK is coming up with this new high frequency railway known as CrossrailHigh Speed
High Speed railway will connect 8 of Britain’s ten largest cities, serving 1 in 5 of the total population.
6. Graduates and Entrepreneurs
Those who want to establish their own business and start entrepreneurship, the UK welcomes them. The entrepreneurship programmes by the UK that makes you eligible for setting up business:
- Global Entrepreneur Programme – this is focused at beginners who have just started their entrepreneurship or businesses
- Sirius Programme – this is aimed at university students who are in their final year or just passed out graduates with plans for start-up businesses
7. Export Business from the UK
If you establish your business in the UK you can also benefit yourself from the same support system to grow your export as UK companies.
8. Finding a Business Location
Both industrial and commercial premises are available on rent and sell for business purposes in most parts of the UK. Specific business planning approval might be required for some business activities and these can be restricted to allocated areas. If you have any plans to extend your business premises and build your business area then the planning procedure is very simple.
Getting construction permits and permission for planning process in the UK is one of the easiest in the European Union and superior than France, Ireland, Switzerland and the Netherlands, as per the World Bank.
8.1 What are Enterprise Zones?
In the UK there are Enterprise zones located across the country that offers incentives to companies to establish their businesses in those locations.
- Financial assistance
- Reduced taxes
- Simpler rules for business planning
There are employment clusters in many Enterprise Zones, and in those clusters businesses from the same sector are located.
9. Registering a Business in the UK
Registering with Companies House is a must if you are establishing your business in the UK. Regulations are there on the use of names for business. Licence or permissions are required for some of the sectors like as defence, finance and oil exploration. For establishing a new limited company too in the UK, one has to register with Companies House. The cost for registering is £20 and it takes approximately 24 hours. Bodies that are partnerships and unincorporated can’t register as a foreign company in the UK.
10. Visas and Migration Processes
There are different visas in the UK based on the situations, such as:
- General visa
- Graduate entrepreneurs
- Representative of an overseas business
11. Financial Assistance
In the UK, businesses can get grants and tax allowances. The assistance helps in financial benefits for research and development work and expenditures in business.
11.1 Opportunities of Funding
In the UK, businesses may be eligible for national and European Union funding including:
- Support in Business
- Grants from Government
- Finance and loans
- Start-up or SME (small and medium-sized enterprise) funding
11.2 UK Regional Growth Funding
Private sector investment are used by the Regional Growth Fund endorses projects and programmes to create economic development and jobs in different parts of the UK.
11.3 Business Funds Providers
Business funds providers are individuals or groups that provide financial assistance/capital to start-ups or early stage entrepreneurs. These Angels invest their personal finance, experience they have gained in their business or profession to invest in the growth of small businesses.
11.4 Private Equity and Venture Capital
If a private equity firm provides financial assistance they would take majority stakes in businesses that have high possibility for growth. Venture capital funding companies also make equity investments in businesses with high expansion possibility, while providing financial support to businesses. These are the types of companies that are often found these days in the beginning supporting start-up or early stages of development in businesses.
11.5 Grants/Financial Benefits
Financial benefits given to individual or business for specific reason or project are called grants.
The specific criteria that you have to meet include:
- Address and location of the person applying
- How the money provide will be invested
- What difference it will make
11.6 Loans for Start-up
Start-ups or entrepreneurships that are less than 12 months of age are given assistance to arrange start-up loans. Entrepreneurs who are unable to get loans from banks can get help from British Business Bank. This economic development bank manages £3.9 billion of UK government funds is supported by the government to create efficient smaller market that are business-friendly. The bank is working with over 70 partners and uses government funding and encourages the private sector in investment and lending.
12. Intellectual Property Rights (IPR)
The Intellectual Property Office (IPO) of the UK manages the International Intellectual Property Rights (IPR) agreements.
12.1 Patents and trademarks for Product/Services and Business
To protect the inventions from getting copied or stolen patents are done, which includes:
- What the invention is
- How does it work
- How the invention is done
- What they are made of
- How they are made
Trademark differentiates the goods and services of one company from other companies or businesses.
Trademarks can be:
In the UK, trademark can be registered under about 45 types of business activities.
Cost of registering a trademark:
- £170 online
- £200 for a paper application
- £50 extra for each type of business activity added to an application
Either companies can submit applications for trademark or can hire a trademark adviser.
12.2 Copyright of Work
In the UK, one doesn’t need to register for copyright. An item becomes copyright when documented or recorded and covers:
- Computer programmes
- Technical drawings
The copyright work is protected outside the country too as it is protected in the UK.
12.3 Registering Designs
How your products looks after being manufactured in the design of that product. Two Law are there to protect the designs:
- Registered: The UK Intellectual Property Office and other international bodies evaluates the design and appearance of the product and registers it, which comes with a cost
- Unregistered: This is automatic but has less protection
Specific regulations are there in some specialist sectors. Intellectual Property Rights (IPR) can be complex at certain areas and companies are advised to hire professionals to understand this.