Setting up a business in the UK can be complex and there are pitfalls that you need to be aware of. Rather than spend hours researching what these are, we have put together a list of common key considerations to get you started on your exciting foray into the UK market.
You should always seek professional advice and create a legal and financial framework that meets your exact requirements. Here are the things you need to think about:
1. Bank Accounts
UK banks are notoriously slow and it can take weeks, sometimes months setting up both business and personal accounts. Having relationships with international banks can expedite the paperwork.
2. Company Incorporation
The incorporation and secretarial requirements of an entity and the relevant tax registrations (VAT) are simplistic. All Information and the registration process can be completed online at the UK Company Office. You will need a registered office (accountants can offer their physical location). Addresses and postcodes have perceived value in London. A Mayfair or City address will gain more respect from your clients than East London for example. This process can take up to six weeks.
Structure, transfer pricing and tax considerations are important to get right from the start. Specialty professional service firms will need to guide you through this process. If you’re from New Zealand Oury Clark provide fantastic insight and service, working closely with the New Zealand and Australian governments’ export agencies and visiting on a regular basis.
If are intending to employ staff, you will need to obtain Employer’s Liability Insurance as a minimum legal requirement. As always it would be advisable to obtain other types of insurance for your company that are typical in the UK. Whilst you may have your own insurance brokers it’s more appropriate to get local knowledge. Insurance company La Playa can guide you on the best policies for your business.
There are a plethora of visa options and work permits available to commonwealth citizens. Your visa type will be determined if you are an employer or employee. If a sole representation visa is required you must ensure the visa is applied for before the UK company is trading and before you employ any staff. This visa is only workable if a UK branch office or a 100% UK subsidiary is established. Seek professional advice from a trusted partner such as Oury Clark.
6. Legal Documents
Once your business is established you will need basic legal documents including, but not limited to, offer letters, employment contracts, NDAs, confidentiality agreements, IP protection and termination restrictions. If you are a technology start-up, specialty tech law firm Kemp Little offer a free library of legal documents via their online library. Registration is free and the library covers all your generic requirements.
7. Annual Filings
Like any business, you will need to maintain your company registry at the anniversary of incorporation. You will also need to complete annual accounts and tax returns, including the production of financial statements compliant for the UK. If your group turnover is greater than £10m or your staff count is more than 50 an audit may be required. Again, the likes of Oury Clark can manage all of this for you.
When entering a new market credibility is extremely important. While certain sectors may benefit from leveraging the ‘Kiwi Inc’ brand (think food and beverage), in general just because you’re from New Zealand does not provide a USP or a point of difference. To be successful in a global market you must be able to prove the following:
- Your offering is disruptive. It breaks the rules of the current ‘game’ and because of this gives your customers a competitive advantage.
- Your offering is scalable. Be prepared to grow significantly, have processes and systems in place that can handle an influx of new customers and their required support needs.
- Your offering solves a unique problem. While not unique to a new market, be sure that your offering solves a problem for your customer. If you are in the fintech or software sector, there may be additional legislative or compliance problems that your software can help with. Understand the problem(s) you’re solving specific to the market you are in.
- You’re global. Having a head office in New Zealand can be detrimental to achieving your goals. While technology has overcome the tyranny of distance, customers will seek assurance that you are locally located and can support them.
9. Marketing and Market Validation
Before you enter a new market it’s important to do your research and ensure that what you offer matches the needs of the local market. An inexpensive way to do this is to use a market entry specialist such as Citrus Tree Consulting to identify lighthouse customers, represent you on the ground and ensure you have a strong flow of leads and opportunity before committing to an office and staff on the ground. Ensure your marketing material is aligned with local references and contact details. Where possible use localised case studies to reinforce this fact.
10. Ecosystems and Support
Since Brexit the UK and London has placed increased importance on international trade, encouraging foreign investment and skilled staff inflows.
- London and Partners - The Mayor of London’s official site encouraging business in the capital.
- Department for International Trade - HM Government agency supporting UK exporters and international investors forming collaborate relationships.
- New Zealand Trade and Enterprise - New Zealand Trade and Enterprise has a significant office in London and can provide guidance and assistance to New Zealand companies wanting to grow internationally.
- Citrus Tree Consultants is very well connected and can assist with all of the above. Below is a list of organisations Citrus Tree has ongoing relationships with. R&D subsidies, investment tax breaks (EIS and SEIS), complimentary Chamber of Commerce memberships, subsidised office rents and a number of other incentives are all available through these organisations.
By Graham Dockrill
Graham is an entrepreneur with over 20 years experience in the information technology sector and founder of several hi-tech start-ups.
He is currently the President of Sales for Citrus Tree Consultants, a global business consultancy and President of Client Relations at WhosOnLocation, a visitor management software startup based in Wellington with global clients. Graham is also a strategy and client relationship advisor for many startups in New York and the United Kingdom.