Establishing Business by jolinmilioncherie

VIEWS: 4 PAGES: 7

									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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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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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.



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