Setting up a business in the UK from abroad

16 April 2021

With renewed optimism and an increase in companies considering setting up a business in the UK from abroad, we have highlighted some of the initial considerations to help you plan.

For some North American companies, expansion might be through a joint venture or may be a result of acquiring an existing UK company. However, for many, setting up internationally means starting from scratch – a new company, new tax registrations and, notably, new employees.

What follows is an overview of what a North American company may need to deal with in the first 12 to 18 months when setting up a business in the UK from abroad, together with any observations we think you need to be aware of from the outset.

No two global expansions are the same. Every company will have its unique requirements and we aim to ensure our services at each milestone reflect this.

Planning Phase (1-6 Months Before Launch)

How much planning you can do is often limited by other aspects of the set-up (for example, there might be a commercial need to launch earlier than your Finance or HR team would like) but clearly the better prepared you are, the greater the chance of success when setting up a business in the UK from abroad.

In some cases, an expansion to the UK will require communication with and possible regulation from the UK authorities. During the planning phase, we can assist with introductions, applications, procedures and planning to ensure you have dealt with every requirement.

If your intention is to relocate someone from HQ to the UK to lead the set-up, then this planning time is crucial as it will allow you to deal with UK immigration rules and apply for a work permit for the employee coming over. It would also mean that the employee would have time to research where to live, the costs of living in the UK and the practicalities of moving (e.g., driving, healthcare considerations, insurances, schools etc.).

Key tasks:

  • Immigration considerations
  • Tax and HR advice for the company and individual in relation to the relocation

Setting Up (1-6 Months After Launch)

The UK is a great location for incorporating a company and regularly finishes in the top 10 of global studies into ‘business friendly’ countries. Whilst the UK has worked hard to simplify its set-up and registration procedures, there is still a lot to do in this initial period to set up a business in the UK from abroad. However, many of the tasks performed will be one-off requirements and it is useful to think of the costs incurred as an investment in your future UK operation.

Getting it right first time

If you get the banking, VAT, payroll and other key processes understood and established, the process should grow with the business rather than become issues that need revisiting as the business evolves.

In many cases, the most difficult task is opening a bank account and the complexity is unfortunately unaffected by the simplicity of your banking requirements. UK banks are expected to understand and identify their clients in detail and this can lead to delays in opening an account as forms, identification and other information is exchanged with the bank. In most cases, you will get a bank account, but it might take months to be operational.

Our short term banking solution

There are ways of managing payments during this period by opening a ZEDRA London Client Bank Account. There are rules about which clients we can do this for, but it is a popular workaround for our clients. Typically, a business will open a Client Bank Account with us for that initial period whilst the corporate account is in the process of being opened. When that corporate account is available, companies often keep the Client Bank Account active to handle HR and payroll payments going forward.

Key tasks:

  • Incorporation of company
  • Opening an ZEDRA London Client Bank Account facility
  • Registrations with HM Revenue & Customs (corporation tax, VAT, payroll, STBV, stock option plans)
  • Preparing an employment contract, offer letter and checklists for local hires
  • Compensation benchmarking and recommendations (including benefits)
  • Accounting system set-up
  • Company Secretarial support (registered office address, commercial registry filings etc.)
  • Monthly payroll calculations, issuing payslips, dealing with HMRC and employees
  • Monthly benefit plan management, dealing with joiners, leavers, changes to plans and communicating with employees and providers
  • Monthly accounting requirements might include processing receipts, payments, purchase invoices, staff expense claims, preparing income statements, balance sheet and other key reports and filing VAT returns

At the End of the First Year (12-24 Months After Launch)

The company will need to deal with annual filings relating to the financial accounts and in relation to the payroll. Some annual filings are with HMRC and some are with the UK commercial registry, Companies House.

Each filing has its own deadline and we monitor these deadlines for our clients to ensure compliance.

Key tasks:

  • Filing payroll end of year forms
  • Review of benefit providers to obtain better terms from existing or new providers
  • Filing stock plan end of year forms in respect of any employee stock grants, exercises etc.
  • Preparation of UK statutory accounts suitable for public filing; preparation of the corporation tax return and advice on any payment required
  • Statutory audit if you exceed certain thresholds. You can find out more about whether you would need to appoint an auditor at year end. Read more here.

What Should You Do Now?

That depends on when you envisage expansion into the UK.

If it is anticipated to be in the next six months, please get in touch with Brieanne Runsten or Adam Dunnett.

If it is likely to be more than six months, you are still welcome to contact us now but if you do not feel quite ready for a conversation just yet, you could choose to:

  • Keep this page bookmarked and refer to it later
  • Read our client testimonials and case studies.
  • Click here to sign up to our weekly business newsletter, London Calling.
  • Follow us on LinkedIn for information on events we are putting on in your area, so you can meet the team in real life!

Get In Touch

Our award-winning team is ready to advise you on all aspects of doing business internationally and accelerate your expansion into the UK, throughout Europe and beyond.

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