Are you a non-resident looking to start a business in the UK? The United Kingdom remains the top country for startups. According to the FundSquire findings, nearly 77 new companies are registered in the UK per hour in 2022. That’s 1,843 companies every single day!
This shows that startups are booming, and people are flocking to the UK to make their entrepreneurial dreams come true. But while the UK may be the right place for your business, it does not come without challenges.
Before you start your journey as a non-resident business owner in the United Kingdom, you will have to look into the practical matters that will help you. In this article, you will learn about the formalities required to start a business in the UK from anywhere across the globe.
Guide for non-resident planning for a startup in the UK
Here is a guide on the factors you need to consider before setting up a startup in the UK as a non-resident.
Have a business structure
There are four main business structures in the UK. Find out which type of structure works the best in the UK, as well as the legal position and tax payment of each to start your business.
Remember, the system you choose for your company decides the amount of tax you pay. The four structures that you can choose from are:
● Sole trader: This is the simplest type of structure in the UK. This structure has no difference between the owner and the business. To start a business with this structure, you must register your company with HMRC before the end of the year.
● Partnership: In this structure, two parties are involved in starting a business. Both parties must be involved in registering the business with HMRC.
● Limited liability partnership (LLP) and limited partnership (LP): In both types of structures, the business is owned by more than one owner. The difference between them is that in the case of LLP, the partners receive the profit and losses as agreed. In the case of the LP, the limited partners receive their proceeds only after the general partners have obtained their profits.
You will need to open and register a business bank account
There are no restrictions on opening a bank account for non-residents in the UK, but the anti-money laundering policy may be challenging. Even if it can get complicated and lengthy, this step is a must to start a business.
Since you’re a non-resident, the only option for you to have a separate UK business bank account is to opt for international banking. It’s safest to opt for a reputable bank; you will be asked for international documents to open a bank account. These include a national identification card, valid passport, and proof of residential address.
Several UK banks allow non-residents to open an account, but their terms and conditions may differ.
Register your business for taxation
Tax is mandatory for every business. Your business may be terminated without paying taxes. Hence, choose a suitable legal structure for your business and register it for tax.
Once your company is registered, the HMRC will send you the formalities required for tax registration. They will ask for the following information on your business:
● Start date of business work
● End date when your accounts will be prepared annually
● Your business registration number
The profits earned by sole proprietors and partners are taxable. In contrast, all limited companies must register for Corporate Tax, levied at 20% on the profits, after deducting any exemptions.
Moreover, other tax registration formalities may be involved, depending on the type of goods and services you specialize in and the areas you plan on selling them.
Manage business accounts
After registering for the tax, you must keep track of the following:
● Bank statements, chequebooks, and proof of payments received electronically
● Cash books
● Credit notes
● Order and delivery notes
● Purchase and sales invoice
● VAT records
● Annual Accounts of the business, including profit and loss
● Other related business information
Keep all these in mind before you start your business. It may be a little difficult to register first and get the permit. But once you have the correct information and a complete plan, you can enjoy doing business in the UK.
Have a registered office in the UK
Since you're a UK non-resident, you will naturally not have a physical residential address within the country. But an official address is mandatory as per the law. If you have a friend or family member living there, you can give them their address.
All official correspondence will be sent to this address. However, it is best to have a virtual office address to which your company can be linked. This usually involves the completion of a formal application process.
Does a non-resident need a visa to start a business in the UK?
The good news is that you do not need a Visa to set up a business in the UK as a non-resident. Plus, the country does not demand proof that you're able to work.
However, does this mean you can start a business remotely and later travel to the UK and work there? No, your rights are limited to starting a business there, not working. In case you wish to travel to the UK sometime in the future for work-related purposes, you will need to apply for a Visa, be it a Work Visa, Innovator Visa, or Startup Visa.
Easy business registration with Business Globalizer
Despite the flexibilities permitted in today’s day and age of eCommerce, the process of setting up a fully functional business in the UK can be a complex and daunting one. There are many formalities to take care of and legal obligations involved that may seem overwhelming. Business Globalizer makes it easy to register your company in the UK from anywhere in the world. Not only that, but we also take care of all the lengthy and challenging paperwork and send you the official documents. You can maintain complete control over your business without worrying about how you will get the permit. Just fill out the registration form, submit company details, make the payment, and avail of our end-to-end ‘business beyond the border’ services with 24×7 customer support!
Some top benefits you can enjoy include -
· Company formation
· Virtual office registration service
· Setting up of business bank account
· Annual confirmation statement filing
· Full-service accounting
· International mail forwarding for an entire year
· Stripe/PayPal account
Get the help you deserve!
So, if you've been wondering whether you need to live and work in the UK to set up a business there, the answer is a simple no. Run a startup remotely from wherever you are via professional expert help!
Since there will be legal, accounting and even insurance formalities involved should you might hire employees. The experts will ensure all paperwork is up-to-date and relevant. Before you know it, your UK business will flourish and grow smoothly.