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BARRBIZTM
Volume 2, Issue 4 March 2011
Establishing a Business
In the United Kingdom
UK GOVERNMENT:
The UK provides an unrivalled and highly term, legally binding framework to ad-
Department of Business cost effective environment for global compa- dress climate change through renewable
Innovation & Skills energy with a target of 26% reduction in
nies to thrive. It is a recognised leader in the
greenhouse gas emissions by 2020, and
Business Link fields of creativity and innovation, and is the 80% by 2050;
sixth largest economy in the world, with a
Companies Act 2006 UK commitments to low-carbon targets
Guidance GDP of US$2,174 billion1.
are driving market demand for products
and services in renewable energy/low
The World Bank report ‘Doing Business 2010’
carbon/green technologies;
RECOMMENDED: states that the UK is the best place to do
business in the EU and the G8; the UK also Special infrastructure projects, including
The path to strong,
topped the Ernst and Young European At- the 2012 London Olympics, continue to
sustainable and bal-
anced growth - Novem-
generate demand for a wide range of
tractiveness Survey 2010 as the most attrac-
ber 2010 products and services, including safety/
tive destination for FDI. security equipment.
The World Bank—Doing
Business 2011—OECD The UK is the easiest place to set up and run In this publication, we’ve provided a high-
2
a business in Europe . It ranks first in Europe level overview on market opportunities, how
The World Bank—Doing
Business 2011—UK and fourth in the world for ease of doing to do business and the related costs associ-
business. ated with conducting business in the UK to
assist you in making that very important deci-
Inside this issue: Further it is a leading global economy and sion to grow your business overseas.
the business centre of Europe. It’s a country
Register a Company 2
at the forefront of global research and devel-
opment, with a highly skilled workforce and 1
World Bank, 2009;
Accessing Capital 3
a robust economy. A country, which after
2
According to the World Bank, it takes just 13 days
the USA, attracts more foreign direct invest-
to set up a business in the UK, compared to the
Office Space 4 ment than any other country in the world! European average of 32 days and the world aver-
age of 35 days.
Market Opportunities
Taxes 5 Source: All information in this publication was obtained
The UK is a highly sophisticated market from the UK Trade & Investment.
with strong demand for products and
Exporting 6
services that improve productivity, in-
cluding ICT software and services that
Barr Trade Services 7 lower costs and improve business effi-
ciencies;
There is ongoing, strong demand for a
wide range of equipment and services
for safety/security and, in particular, for
IT and cyber security;
Green Opportunities: The UK Climate
Change law is the world’s first long-
BARRBIZTM
Page 2
Registering a Company
The UK has long recognized the benefits of inward invest- contribute to the company’s assets if it is wound up;
ment and has welcomed overseas-owned companies look-
Private unlimited company – there is no limit to the
ing to do business in – and with – the UK. members’ liability;
How do I register & setup a company? Public company limited by shares (Plc) – the com-
It is a straightforward process to establish a company in pany’s shares are offered for sale to the general public
the UK and there are no separate rules for foreign nation- through a stock exchange and the members’ liability is
limited to the amount unpaid on shares held by them;
als.
Partnerships – overseas investors can establish a part-
To register a company, certain mandatory documents nership in the UK. The partners have ‘joint and several’
such as the ‘Memorandum of Association’ and ‘Articles of liability for all debts;
Association’ must be filed with Companies House (for Eng-
Limited Partnerships – consists of one or more persons
land, Scotland and Wales) or with Companies Registry (for called ‘general partners’ who are liable for all debts and
Northern Ireland). one or more persons called ‘limited partners’ who con-
tribute a sum or sums of money as capital, or property
» Read more (Info & Guide) valued at a stated amount. Limited Partners are not
liable for debts/obligations beyond the amount contrib-
» Read more (Companies Act) uted;
How long does it take to register my company? Limited Liability Partnership – this structure provides
The documentation can be prepared and the company the benefit of limited liability but allows its members
the flexibility of organizing its internal structure and tax
registered in a day, provided that standard Memorandum arrangements as a traditional partnership.
of Association and Articles of Association are adopted (it
can take considerably longer if tailor-made Memorandum You should seek legal advice before deciding the best en-
of Association and Articles of Association are required). tity for your business.
‘Ready-made’ companies are available from company for-
mation agents throughout the UK. How much money do I need to setup a company?
It costs £20 to incorporate a limited liability company at
How much does it cost to register my company? Companies House. To incorporate on the same day the fee
A new company comes into existence when the Registrar rises to £50.
of Companies issues a certificate of incorporation. A stan-
A full price list is available on the Companies House web-
dard incorporation costs £20.00.
site.
A same-day company incorporation service is also avail-
» Read more
able for an additional fee.
For advice on business structures visit the Business Link
What type of Company should I setup?
website.
The majority of foreign investors will establish a UK-
registered company when setting up in the UK. The differ- » Read more
ent types of UK-registered companies are:
Private company limited by shares (Ltd). The mem-
bers’ liability is limited to the amount unpaid on
shares they hold;
Private company limited by guarantee – the members’
liability is limited to the amount they have agreed to
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BARRBIZTM
Page 3
Accessing Capital
Accessing Capital Innovation and Skills and sponsored by Nesta and Kingston
First you will need to establish what form of finance your Smith.
business requires, i.e: equity or debt.
» Read more
London is one of the leading financial cities in the world
Floating a Company
and largest capital markets. The City of London and the
The London Stock Exchange is one of the world’s oldest,
standard clearing banks are well placed in securing capital
most respected and most international stock exchanges,
for industry.
whose three markets, Main Market, the Alternative Invest-
Currently set up to help plug the financing gap are pub- ment Market (AIM) and the Professional Securities Market
licly-funded English Regional Venture Capital Funds (PSM) attract significantly more international company list-
(RVCFs), which finance growth companies for amounts up ings than any other.
to £500,000.
» Read more
The new Enterprise Capital Funds, such as the IQ Capital
Main Market is the UK’s principal capital market and pro-
Fund will build on the RVCFs, encouraging investors to put
vides a world-class listing and trading environment for lar-
money into small businesses.
ger, more established companies and a unique focus on
» Read more innovative technology and healthcare businesses through
techMARK and techMARK mediscience.
Venture capital
The venture capital (VC) or Angel investor-funding route » Read more
may provide cash, but usually has conditions attached,
AIM is the world’s most successful market for smaller,
such as an imposed Board Director.
growing companies and for many companies represents
The UK has one of the strongest venture capital markets the first experience on a public market.
in the world. The BVCA is the industry body for the UK
» Read more
private equity and venture capital industry.
PSM is a market that allows the raising of capital through
Its membership represents the overwhelming number of
the issue of specialist securities to professional or institu-
UK-based private equity and venture capital firms and
tional investors. This innovative and highly specialized mar-
their advisers.
ket suits the specific needs of certain companies, particu-
» Read more larly those from outside the EU and from emerging mar-
kets.
Business Angels
Business Angels are another source of capital for new and » Read more
high growth potential businesses.
For those looking to raise smaller sums then the PLUS Mar-
The British Business Angels Association (BBAA) is the new kets Group (PMG) may be more appropriate. PMG trades in
national trade association for the UK’s Business Angel net- unquoted and unlisted securities and is a good way for
works and its associates and affiliates. young companies to raise finance to grow.
It has evolved from National Business Angel Network » Read more
(NBAN) and is backed by the Department for Business,
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BARRBIZTM
Page 4
Office Space options
The UK offers a range of property options from leased » Read more
offices to serviced offices.
The Korean Science Park is called iPark and is situated in
The UK offers a range of property options from leased London.
offices to serviced offices. The Instant Offices UK and
» Read more
Regus websites can give you an idea of some of the op-
tions. The Chinese Incubation Parks are located in Manchester
and Cambridge.
» Instant Offices
» Read more
» Regus
Manufacturing
Building a new premises in the UK
There is a wide range of support available to the manufac-
You will need to seek planning permission from the local
turing sector. The Department for Business, Innovation and
planning authority before commencing. The UK construc-
Skills has established the Manufacturing Advisory Service
tion sector is one of the most vibrant in Europe and will be
which aims to address the practical needs of manufacturers
able to meet your design and build requirements.
by delivering hands-on advice and assistance from experts
» Read more in a wide range of manufacturing disciplines.
In addition to the above, planning permission is required » Read more
when a business – or individual – wants to amend an ex-
isting building or change the purpose of a building (e.g
residential to business).
The UK planning system is discretionary and can be more
flexible than many European planning systems, which are
based on strict development codes or zones.
The majority of planning applications in the UK are
granted within eight to 13 weeks by local planning au-
thorities. More information is available on the Planning
Portal website.
» Read more
Incubators
There are a number of incubator facilities for businesses
new to the UK. The UK has approximately 100 Science
Parks that have been established to support the start-up
and development of knowledge-based businesses. Many
have formal links with universities, institutes and research
organizations.
The UK Science Parks Association has details of science
parks across the UK.
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BARRBIZTM
Page 5
Taxes
Business Taxes come on which an individual does not have to pay any tax.
In the UK you pay tax on any profits that you make. This Above the allowance tax is payable at 20 per cent for earn-
is called Corporation Tax and the rate for larger compa- ings up to £37,400 and 40 per cent for earnings over
nies has been 28 per cent since April 1, 2008. If you qual- £37,400.
ify as a small company then the rate drops to 21 per cent.
Earnings above £150,000 per annum are taxed at 50 per
You are also liable to pay Value Added Tax (VAT), which is
cent.
an indirect tax on the purchase and sale of goods and
some services (other than exempt supplies). An employee will also typically pay National Insurance con-
tributions of 11 per cent on a proportion of their weekly
You can reclaim tax that you are charged by your suppli-
earnings (between £95 and £884). An additional 1 per cent
ers against tax you add to your invoices; therefore the tax
is charged on earnings in excess of £844.
liability for many companies is minimal.
Tax rates, National Insurance contributions and Personal
A UK business will also pay National Insurance on behalf
Allowances are reviewed annually.
of its employees, currently at 12.8 per cent of their earn-
ings. For more information on tax visit the HM Revenue & Cus-
toms website.
Double Taxation
UK companies are taxed in the UK on all of their world- » Read more
wide income. The UK has over 100 Double Taxation Trea-
Taxes for Employees
ties – the most of any country – to avoid double taxation.
You will have to pay National Insurance Contributions for
An important feature of many treaties is the reduced rate your employees. The current rate, for tax year ending April
for withholding tax on the payment of dividends, interest 2011, is 12.8 per cent on earnings over £97 per week for
and royalties. each employee. This is one of the lowest social security
rates in Europe.
HM Revenue & Customs has a full list of treaties:
» Read more
» Read more
Tax Incentives
The UK does provide a range of tax incentives from tax
credits – covering areas such as R&D and film production
– to capital allowances for investment in plant and ma-
chinery.
» Read more (R&D)
» Read more (Film)
» Read more (Plant & Machinery)
Tax Rates
For the tax year to April 2011, there is an annual tax-free
personal allowance of £6,475. This is an amount of in-
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BARRBIZTM
Page 6
Exporting
An important aspect of the UK’s import and export policy destinations worldwide.
is its membership of the European Union, where imported
Export Duty Levels
goods can circulate freely within European Union member
Exporting from the European Union and the UK is a
states once customs duty and any other charges have
straightforward process. Many exports from the European
been paid.
Union receive preferential tariff rates of duty (often nil) in
Goods that are exported from the UK are not charged their country of destination.
customs duty.
The goods must meet the specified rules of origin con-
Due to the UK’s multiple international trading agreements tained in the European Union agreement with the particular
many exports from the UK also receive preferential tariff destination country.
rates of duty (often nil) in their country of destination.
In the UK, exporters of goods must present an export dec-
UK Free Ports laration to Customs before the goods leave the country
In the UK there are Free Ports in: (this also applies to goods that are leaving the European
Union via other member states).
England: Liverpool; Port of Sheerness (Kent); Port of
Tilbury (Essex); and Southampton; Most exports are cleared promptly by Customs via the elec-
tronic ‘New Export System’, but licenses, permits and cer-
Scotland: Prestwick Airport;
tificates are required for certain goods (either for exporting
The Isle of Man. Goods can be stored in each exempt from the UK or for presentation in the importing country).
from duty.
For further information visit the Department for Business,
Authorization to operate a ‘customs warehouse' allows an
Innovation and Skills website.
importer of goods from outside the European Union to
store them without payment of duty, Value Added Tax » Read more
(VAT) and other import charges.
Businesses in the UK must, for VAT purposes, maintain
There are two categories of customs warehouse: proof of exports, incorporating a valid commercial or official
evidence of export, supported by relevant commercial
The Public Warehouse for the use of any trader in the documents.
UK, and;
The Private Warehouse, which is reserved for the These may include the customer's order, contract corre-
warehousing of goods by the warehouse keeper. spondence, copy export invoices, advice notes, consign-
ment notes, packing lists, insurance and freight charges,
Major Airports
evidence of payment and receipts from abroad. All docu-
There are excellent air links to locations all over the world
ments must clearly identify the exporter and the goods.
from world-class international airports such as Heathrow,
Gatwick, Manchester, Stansted, Birmingham and Glasgow. A detailed guide to export procedures can be found at HM
For example: Revenue and Customs
London Heathrow – 1,154 direct flights daily to 165 » Read more
destinations worldwide;
Export Basics (Business Link)
London Gatwick – 331 direct flights daily to 122 desti-
nations worldwide; » Read more
Manchester Airport – 354 direct flights daily to 94
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OFFICE LOCATIONS: Letter from the Editor:
Middle East – Headquarters: The United Kingdom’s open and
P.O. Box 35243, Dubai, United Arab Emirates
Tel: +971-4-214-9749 agile business environment, lim-
Fax: +971-4-214-9501 ited regulation and favorable busi-
ness conditions mean it has never
United States – Trade & Investment Office:
Penny Ann Barr MBA, MD/CEO been easier for foreign investors to
110 Sunset Hills Extension establish a UK operation.
Tyrone, PA 16686, United States
Tel: +1-814-684-0620 Further, the UK's 4.8 million small and medium-sized enterprises are
Fax: +1-814-684-0623
Email: penny.barr@barrconsultancy.com vital to the economy. They provide 60 per cent of private sector jobs
and account for half of all private sector turnover. The Government is
United Kingdom – Trade & Investment Office: committed to ensuring that the UK has an environment where it is
Dr. Bob Vass, Consultant
5300 Lakeside, Cheadle Royal Business Park easier for new companies and innovations to flourish and where peo-
Manchester, SK8 3GP, United Kingdom ple who aspire to be entrepreneurs are encouraged.
Tel: +44-0-1612-466039
Fax: +44-0-1612-466100 The UK provides an excellent platform to sell your products or services
Email: bob.vass@barrconsultancy.com
to the European Union and within the UK. Capitalize on this great op-
Singapore & Malaysia – Trade & Investment Office: portunity to expand into new markets and grow your business by con-
Dr. Shelen Ho, Consultant
tacting us today.
Level 16, 1 Sentral
Jalan Stesen Sentral 5
KL Sentral, 50470, Kuala Lumpur, Malaysia Penny Ann Barr, MBA
Tel: +603-2092-9564
Fax: +603-2092-9201 MD/CEO
Email: shelen.ho@barrconsultancy.com
Website: www.barrconsultancy.com
Barr Trade Services
Our Trade & Investment Specialists can:
Assess the Marketability of your product;
Advise on the best Market Entry Strategy for your company;
Identify relevant Trade Events for your products and provide on-the-ground assistance;
Search for Agents/Reps/Distributors/Sponsors and provide a list of potential partners;
Penny Ann Barr
Arrange In-Country Appointments with Agents/Reps/Distributors and potential partners;
Serve as a Liaison between your company and other relevant organizations in the targeted country;
Provide support for your business at International Events and meetings with potential partners or customers;
Review and help fine-tune your Marketing/Promotional documents for the targeted market;
Provide basic Informational Reports on overseas companies.
Guarantee: We guarantee to deliver the highest quality customer service and deliverables or your money back.
“At Barr Management Consultancy, the customer comes first.”
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