A guide to doing business in the UK

Doing business in the UK for the first time can be exciting but complex. In this inward investment guide, we identify ten key points to help you plan ahead for success

19 October 2022

Understanding local market regulations and practices can make a significant difference to your experience of doing business in the UK. Our Launchpad team of experts have identified ten key issues to help inward investors plan ahead for success when setting up in the UK.

For any inward investor, careful planning and forethought is required before doing business in the UK. Failure to satisfy local market regulations can materially affect your commercial operations. Our Launchpad team of legal experts and project managers enable clients to design, deliver and fast-track UK market entry strategies that anticipate and manage the issues, challenges and delays that sometimes occur when setting up a new business in the UK.

We work closely with the Department for International Trade (DIT) in the UK and overseas and are delighted to be included in the DIT's UK Investment Support Directory as a specialist provider to inward investors.

Here is a checklist that will help you as you consider expanding into the UK and identify how best to navigate your way through the uncertainties and risks you will encounter:

1. UK market entry strategy – can locally-based project analyst support help you identify your UK route to market options and analyse the data on your target customers’ requirements and preferences? We can help connect you with the relevant DIT specialist team(s) in order to assist you in testing your business plan against different market, technology and risk-based scenarios and their likely impact on factors such as target customers, supply chains, workforce, location and financial forecasting.

2. Business set up - establishing a presence in the UK may seem like a big step but we are here to guide you through the process. There are two common ways of setting up in the UK– incorporating a private limited company as a subsidiary of an overseas parent company or setting up a UK establishment (more commonly known as a 'branch') of an existing non-UK entity. There are advantages and disadvantages associated with each approach although in our experience the majority of our clients set up a new subsidiary. Our company secretarial team can handle this set up for you and assist you with your ongoing UK Companies House filing obligations. Remember in particular that the UK requires any person who exercises significant control over a company to be notified to Companies House. If, on the other hand, you are considering entering into a joint venture arrangement or investing in or buying a business in the UK, there are a number of issues to consider which our corporate finance experts can advise you on. Whichever entry route you adopt, if you are intending to take on a directorship of a UK company, you need to be aware of the responsibilities and duties which you will be assuming under UK law.

3. Taxation – before establishing a branch or subsidiary in the UK, you may require advice during your business planning phase to understand how the relevant UK taxation rules will apply to your company. Very broadly, a UK tax resident company is generally subject to corporation tax on its worldwide profits and gains. Non UK tax-resident companies can be subject to UK tax in certain cases. For example, a non-resident company that is carrying on a trade in the UK through a UK permanent establishment is generally subject to corporation tax on profits and gains attributable to that permanent establishment. In addition, a non-resident company which has an interest in UK real estate may be subject to UK taxes in certain circumstances. Registration with the tax authorities and compliance with other tax rules (e.g. VAT, payroll taxes) will also need to be considered as appropriate.

4. Bank accounts – opening a UK bank account is often a complex and time consuming process for new market entrants. Each UK bank will need to perform checks on any newly established UK entity client, and its directors and shareholders. Naturally, banks have different approaches and requirements and the overall process can take several months when dealing with centralised anti-money laundering approval processes. Engaging with banks at an early stage can avoid delays on initial set up.

5. Intellectual Property – IP (including trade mark) registration in your home country won’t necessarily protect you in the UK. Before using your brand in the UK, you may need to carry out clearance searches to check that you won’t infringe UK third party rights. You may wish to register your trade mark in the UK to help to prevent others from using or protecting an identical or similar mark. You should also consider registered designs and patent protection

6. Employment & Immigration– You will need to consider how to employ an individual in the UK (either directly or via an employer of record). The approach taken will depend on various factors such as how many employees will be based in the UK and what the business plan is for UK operations. Under UK law, employers should have in place robust contracts of employment for their workers and need to ensure they are complying with UK employment laws, in particular in relation to the national minimum wage and working time restrictions. UK employers also need to deduct income tax and social security benefits from employees' remuneration at source, contribute to employees' pension schemes and hold employer's liability insurance to cover personal injury and other claims by employees. In addition, UK employers wishing to employ workers from outside the UK and the European Economic Area (or EEA) must first obtain a sponsor license from the UK Home Office. The non-EEA workers would also need to apply for a work visa unless they already have separate immigration clearance.

7. Real Estate – we can assist you in identifying your property options and selection of real estate professionals. We can also assist you with all of your occupational requirements, whether involving lease negotiations or property purchase and regulatory compliance depending on the nature of your business operations. We can also assist you in your understanding of recent real estate tax changes and the regulatory requirements in relation to beneficial ownerships for overseas entities purchasing UK real estate.

8. Regulatory compliance – any businesses entering the UK will need to understand and comply with the UK regulatory landscape relevant to their business model. This can include investment regulations and restrictions on foreign ownership, imports and import duties, safety regulations, financial services regulation and compliance with financial crime legislation, and standards for commercial goods and services. We can assist you with assessing the impact of UK regulation and help you produce an action plan to ensure compliance.

9. Commercial law - you are likely to need a comprehensive set of English law commercial contracts to operate a business in the UK. They may for example include commercial joint venture agreements, collaboration and partnering arrangements, supply arrangements, sale and purchase terms and conditions, distribution and agency agreements, consumer contracts and services agreements. Our commercial lawyers can also advise whether you have the most robust contractual terms in place to help you manage any changes brought about by Brexit.

10. Marketing and business development – finding the right sales team with strong industry connections and an excellent track record is one of the most important first steps for any business entering the UK market. Our Launchpad team can introduce you to, or assist you in appointing, highly experienced consultants in your sector who can help you build your new UK team.

Our Launchpad team of project managers and legal experts, together with specialist service providers, provides a full service offer, helping you to fast track the UK set up process and focus time on winning new business. You can read here about how our project managers supported a US healthcare client with the establishment of a new UK business venture.

To discuss how we can support you to achieve success in the UK, get in touch with Paul Browne or contact our Launchpad team at launchpad@burges-salmon.com.

Key contact

Paul Browne

Paul Browne Partner

  • Head of Real Estate
  • Head of International Trade
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