So you recently moved to the United Kingdom and you wish to join the entrepreneur community. But the problem is, you don’t know how to register your business as a foreigner in the UK. If that’s you, keep reading. Registering your business in the UK is easy, whether you are a foreigner or a citizen.
As of the time of writing this, there are over 5.9 million registered businesses in the UK. However, before going about registering your business, you have to take the time to ask yourself these questions:
- What type of business do I want to run?
- What corporate entity will my business be?
- What will I name my business?
After answering a few of these questions and getting the right answers, you can then go ahead to get the requirements to register your business as a foreigner in the UK.
What are the requirements to register your business in the UK as a foreigner?
The good news is, that registering your business in the UK as a foreigner requires only a few easy-to-obtain documents and the registration can be processed online. You can also register it over the post or via the Company House website, which will cost you just £12.
If you already have an established business in your country that you wish to move to the UK or establish a new branch in the country, you must be honest and tell the registrars the number of your employees and exactly what you pay them.
1. Company Legal Structure
Before you can register your business with the Company House, you must first and foremost decide on the legal structure of your business. According to research, the most common structure entrepreneurs choose is the Public Company Limited (PLC) by Shares. We will discuss this further.
2. Tax Registration
One of the most important requirements for registering your company in the UK is to ensure your business is registered with the corporate tax department three months after you have started your business operations.
You can even qualify for the self-employed personal allowance grant when you have established your business successfully in the UK as a non-resident as long as you have a work visa. Just having a work visa shows you pay tax on any income you generate from your business.
You can register your business for tax online or over the phone with HM Revenue and Customs. You might also be required to provide proof of tax paid by your business in your home country.
3. Open a UK Bank Account
Having a corporate bank account for your business is not a requirement, however, you will be required to own a UK bank account in your name. this is because receiving payments from your customers using your native bank account will be expensive and tedious both for you and your customers.
You can also register with virtual banks if you are setting up a business in the UK that sends and receives money regularly. This can help you cut the costs involved in currency conversion and transfer especially when you still sell to customers in your home country.
4. Types of Legal Structures
As established at the start of this post, you need to pick a legal structure to make your business a recognized legal entity in the UK. Here are the legal structure types to take note of and decide on which is best and most suitable for the type of business you run.
1. Sole Proprietor/Trader
The easiest business legal structure to sign up for if you want to start a start business in the UK as a foreigner is the sole proprietor or trader structure. A sole trader structure allows you to own and manage the business without external influence.
You can choose to hire employees or just run the business as a freelancer or a one-person squad. Self-employed individuals in the UK fall under this legal business structure category.
To get your business registered under the sole trader structure, you need to head over to the Company House website and register your company. You will need your National Insurance Number (NIN), and you are required to register for self-assessment with HMRC.
Aside from the ease of setup, another advantage of registering your business as a sole trader is that every profit made from your business belongs to you seeing as you have no partners or shareholders to share them with.
This also means that you bear all the responsibilities that come with running your business like, arranging income tax, business debt repayment, and National Insurance payments.
2. Private Limited Company (Ltd)
Setting up this type of limited company, you separate its legal entity from yours and the other individuals running it. A limited company is incorporated by registering at Companies House. No public trading of Ltd shares is allowed.
3. Public Limited Company (PLC)
The key difference between a PLC and a Ltd is that shares in a PLC can be publicly traded, with a minimum capital share of £50,000, at least 25% of which is paid before setting up is required. This business structure offers you a number of advantages.
4. Business Partnership
Finally, you can register your company as a business partnership. In this legal structure, you and your partner will share the loss and profits of the business as well as the liabilities that come with it.
What documentation do you need to register your business as a foreigner in the UK?
The Company House in the UK requires the same documentation, processes, and fees from a foreign national as they do from a British national. Ensure to gather and prepare the following documents and information:
1. Business Name
Conduct your research to ensure your business name isn’t already owned and registered by another business. For sole proprietor legal structure registration, setting up your business name is as easy as registering your own name.
2. Business Activity
The Company House demands new business applications to specify their business activity type. You can achieve this by selecting the Standard Industrial Classification (SIC) code appropriate to your business.
3. Working Visa
You can start up a business in the UK without a working visa. Nevertheless, you can only work in the country with a working visa, depending on your nationality. It is advisable to apply three months in advance when applying for a working visa.
4. Director Information
If you plan to set up a Private Limited Company in the United Kingdom, you need to provide at least one director. The director does not have to be a resident in the UK. Collect and prepare the following details in regards to the director:
- Full name
- Date of birth (must be at least 16 years and above)
- Residential address (does not have to be in the public register)
- Service Address (residential or other address)
- Nationality
- Occupation
Also Read: 9 Investment Ideas for Foreigners in the UK
5. Shareholders Information
Similar to setting up a PLC, if the company you wish to start in the UK is publicly traded, you must issue shares upon business inception. You need to have a shareholder, it can be your business director or another trusted individual to be able to register.
The shareholder also doesn’t have to be resident in the UK, but you’re required to provide their information.
If the shareholder is a Person with Significant Control (PSC):
- Full name
- Date of birth
- Nationality
- Residential address
- Service Address
- Nature of control (percentage of shares controlled)
- Three security details (to serve as an online signature):
i) First three letters of town of birth
ii) First three letters of town of father’s surname
iii) First three letters of town of mother’s maiden name
If the shareholder is not a Person with significant control (PSC):
- Full name
- Date of birth
- Nationality
- Residential address
- Service Address
- Nature of control (percentage of shares controlled)
- Three security details (to serve as an online signature):
iv) First three letters of town of birth
v) First three letters of town of father’s surname
vi) First three letters of town of mother’s maiden name
6. Share Allocation
When you register your business as a private limited company, you have to assign shares to your shareholders.
7. Document of Formation
When registering a private limited company in the UK, two sets of documents are required:
1. Memorandum of Association
2. Articles of Association
In plain terms, these documents are contracts of accountability among the involved parties. The agreements are set in black and white on the matter of running the company. After collecting all the information and information required, you can then proceed to the Company House and HMRC to register your business.
How long does it take to register a business in the UK as a foreigner?
Depending on the operations of your business, you can register your company within 24 hours. To ensure your application gets attended to promptly, file your application to the House Company on or before 3 pm.
Registering your business as a foreigner in the UK is a straightforward experience that doesn’t require extra charges. If however, you wish to bypass all these, you can get a trust business registration agency to do it for you.
Also Read: 7 Best Payment Processing Gateways in the UK [2023 Updated]
Conclusion
At any point you decide to change your company information after registration, you can. You can change your business address when you move and other important details as you advance in business.
