Business Immigration: Guide to Business Expansion to the UK

How to Expand Your Business to the UK: An Overview

Expanding your business to the UK offers a wealth of opportunities. A stable economy, large and affluent consumer base, and skilled workforce ensure it’s an excellent place for overseas companies to expand. 

Expanding a business to the UK involves careful planning. It requires an understanding of the legal, regulatory, and operational requirements. This guide details the practical steps, including:

• UK Business structures
• Company registration
• Founder visa requirements
• Workforce visa requirements
• Compliance with local laws
• UK tax obligations
• Market research
• Benefits of UK expansion

Understanding Business Structures

When expanding to the UK, choosing the appropriate business structure is important. It adds clarity to your business plan, and helps you decide which type of business to incorporate.

• Subsidiary
• Branch

We will discuss these in detail below and three other models that multinationals have used to expand successfully into the UK market. These include:

• Franchise
• Acquisition
• Representative Office Model

Subsidiary

A subsidiary is a separate legal entity incorporated in the UK and wholly or partly owned by the parent company. 

• Amazon established a UK subsidiary, Amazon.co.uk, to maintain complete control over its operations while leveraging its global brand and resources. This allowed them to invest heavily in infrastructure and adapt its services to UK consumer preferences, establishing a strong market presence.

Branch

A branch is an extension of the parent company and not a separate legal entity. 

• IKEA expanded into the UK by establishing branches, maintaining full control over operations and branding. This model allowed IKEA to standardise its store layout, product offerings, and customer service, achieving significant market penetration.

Acquisition

Acquisiton allows an overseas business to buy a UK company outright, or in part.

• Tata Group expanded into the UK primarily through acquisitions such as Tetley Tea and Jaguar Land Rover. Tata integrated these companies into its global operations while respecting their established brands, allowing it to quickly gain a foothold in the UK market.

Franchise

Franchising is a popular model for business expansion allowing a business to use its name, reputation and/or offerings to attract franchisees.

• Starbucks expanded into the UK using a combination of franchising and licensing agreements, enabling rapid expansion with lower capital investment. By maintaining strict control over brand standards, Starbucks successfully established a widespread presence in the UK.

Representative Office

The Representative Office Model involves setting up a small, typically non-revenue-generating office in the UK. 

• Alibaba initially entered the UK market through a representative office focused on marketing, research, and establishing connections with UK businesses. This approach allowed Alibaba to gain valuable insights without the complexity and cost of full registration.

Registering an Overseas Business in the UK

To register a UK establishment of an overseas company including a subsidiary or branch, you must ensure you have the necessary documentation. Here’s a breakdown:

• Fill out and submit the form OS IN01, including the appropriate filing fee.
• Provide a certified copy of the company’s constitutional documents, such as the charter, statute, memorandum, and articles of association. If these documents are not in English, you must include a certified English translation.
• If your company is required to prepare and deliver accounts under its parent law, submit a copy of the latest set of accounts and a certified English translation if they are in another language.
• If the parent law mandates the preparation, auditing, and disclosure of accounts, include a copy of the most recent accounts disclosed as of the opening date of the UK establishment, along with a certified translation if needed.
• The cost to register is £71. To avoid rejection of your application, be sure to include the correct fee with your OS IN01 form.

These steps are specifically for overseas parent companies establishing a presence in the UK.

If you are registering an acquisition:

• You will need to update Companies House of any changes to ownership, registered address and directors
• Inform HMRC of the change of ownership, once you have successfully acquired the company. 

Business Types for ‘New’ Business Entity

It may be necessary to incorporate a separate entity in the UK if you wish for it to be detached from the parent company for any reason. The type of business you set up depends largely on if you are a sole trader, small business, medium or large corporation.

• Private Limited Company (Ltd)—Private Limited Companies are most commonly chosen by UK and overseas companies alike. They offer limited liability for shareholders and are also suitable for franchise business models.
• Public Limited Company (PLC) – Suitable for larger corporations, PLCs allow the public trading of shares. A minimum share capital of £50,000 is required.
• Sole Trader – Setting up as a sole trader is less common for overseas expansion. An individual is liable for business debts. Securing a visa may be more challenging.
• Limited Partnership (LP) – Limited Partnerships are less common. They consist of one or more general partners. One partner will have unlimited liability and one or more limited partners will have liability only up to their investment.
• Limited Liability Partnership (LLP) – A Limited Liability Partnership means all partners have limited liability and can participate in management.

Visa Requirements for Business Founders

Innovator Founder Visa

Suitable for entrepreneurs looking to establish a business in the UK, the Innovator Founder Visa requires endorsement by an approved body and a viable business plan. You can stay for up to 3 years on this visa if you can prove your progress, and apply for a further 3 year extension, after which you may be eligible to settle in the UK indefinitely. 

• Requires endorsement from an approved endorsing body. The endorsing body must assess and support your business idea.
• Must present a viable and innovative business plan that is scalable and aligns with the UK’s business ecosystem. It must be innovative and different to other UK businesses
• You must have enough personal savings to support yourself in the UK
• You must demonstrate sufficient funds for your business and provide evidence of the funding source. However, if your business is already established and previously endorsed for a visa, you do not need to prove additional investment funds.

You may also qualify for a:

Global Talent Visa

The Global Talent Visa is for talented individuals in specific fields such as digital technology, arts and culture, and academia or research. You must be endorsed as a recognised leader or an emerging leader in your field.

There is no need to demonstrate specific business funds, unlike other business-related visas. However, you must secure a Certificate of Endorsement from the relevant body. For example, in digital technology, you must apply to Tech Nation for endorsement.

• To apply for endorsement, you must submit evidence of your ‘exceptional’ ability showing any awards, achievements or public appearances. 
• You will also need to apply with 3-5 recommendation letters from industry-professionals recognising your ability.

Self Sponsorship Routes

Self sponsorship is not quite what it alludes to. However, it is becoming more prevalent after the UK ended the Entrepreneur Visa and the Investment Visa. You will need to gain sponsorship from a UK-based company.

You may be able to register your own business in the UK, apply for a sponsor licence and sponsor yourself as a worker.

Other routes are to acquire a business in the country, or that your partner incorporates your UK business branch in their name. In each scenario a sponsorship licence must be obtained and a CoS issued to sponsor you as a worker:

You may be able to sponsor yourself for one of the following visas for UK entry clearance. 

• UK Expansion Worker Visa (Global Business Mobility)
• A Senior or Specialist Worker Visa (GBM)
• Representative of an Overseas Business Visa (GBM)
• Skilled Worker Visa

Further details on these visa types can be found under the UK Visas for Overseas employees section below.

For help on submitting your visa application, or for advice on a pathway to settle permanently in the UK with Indefinite Leave to Remain and British Citizenship, you can get in touch with our expert lawyers.

Let us help you explore your UK visa options ideal for your unique circumstances. Contact our team of IAS immigration lawyers to determine your eligibility, and your route to business expansion in the UK. Call +44 (0)333 305 9375 or visit us online.

Workforce Considerations

You may consider creating jobs in the country or operate a dual approach where you transfer overseas employees for training UK-based employees, or to work long-term. Transferring existing employees involves understanding various visa options. You must have a sponsor licence before you can grant visas for existing employees to join your UK business.

Sponsor Licence

Obtaining a sponsor licence is essential when expanding your business to the UK and hiring workers from outside the country. This licence requires your company to demonstrate that it is a legitimate business with effective HR guidelines to monitor and manage sponsored employees. The process ensures that your business can legally employ non-UK workers while adhering to immigration regulations.

Costs for Obtaining a Sponsor Licence and Hiring Employees in the UK 2026

There are two types of sponsor licences available:

• The Worker Licence 
• The Temporary Worker Licence

A company can apply for one or both.

As of April 6, 2024, you no longer need to renew a sponsor licence every four years. Your sponsor licence will be valid for 10 years.

The following fees apply:

You normally qualify as a small business if your annual turnover is £10.2 million or less, your total assets are £5.1 million or less, and you have 50 or fewer employees.

Costs for Each Employee Hired

Once you have secured your sponsorship licence you must pay a fee for each Certificate of Sponsorship (CoS) you issue to an employee.

Certificate of Sponsorship (CoS) Costs:

• A Worker licence costs £239 per employee and covers the Skilled Worker Visa and the Specialist or Senior Worker Visa (which is a Global Business Mobility Visa)
• All other Global Mobility Visas come under the Temporary Worker licence which costs £25 per employee

Immigration Skills Charge

An Immigration Skills Charge is payable for the following Worker Visas:

• Skilled Worker Visa
• Specialist or Senior Worker Visa

This charge is applicable for each year an employee is sponsored, contributing to the cost of the UK’s immigration system.

• Small or Charitable Sponsors: £364 per employee per year
• Medium or Large Sponsors: £1,000 per employee per year

An additional 6 months costs £182 for small or charitable sponsors, or £500 for medium or large sponsors.

Visa costs & immigration healthcare surcharge

In addition to sponsor licencing, skills charges and Certificates of Sponsorship (CoS), visa fees are payable per employee. These vary depending on the visa chosen. Applicants must also pay the Immigration Healthcare Surcharge in full for their stay. 

It is recommended to seek advice from experienced immigration lawyers in order to comply with UK immigration law.

UK Visas for Employees (Global Business Mobility Visas)

UK Expansion Worker Visa (GBM)

• A UK Expansion Worker Visa allows senior managers or specialist employees of an overseas business to come to the UK to establish a branch that has not yet started trading.

Senior or Specialist Worker Visa (GBM)

• A Senior or Specialist Worker Visa allows you to come to or stay in the UK to do an eligible job at your employer’s UK branch. It has replaced the Intra-Company Transfer Visa.

Secondment Worker Visa (GBM)

• Apply for a Secondment Worker Visa if your overseas employer is transferring you to do an eligible job for a separate organisation. The company must have a high-value contract with a UK organisation.

Graduate Trainee Visa (GBM)

• A Graduate Trainee Visa is for overseas workers on a graduate training program leading to a senior management or specialist position, requiring them to undertake temporary work assignments in the UK.

Other Visa Types

Skilled Worker Visa

• Employees must have a job offer from a licenced sponsor and meet specific skill and salary thresholds. This is £38,700 for the Skilled Worker Visa as of 2024, but can be reduced for some job roles. This visa allows long-term employment and potential settlement in the UK.

Representative of an Overseas Business Visa

• You can apply for a Representative of an Overseas Business Visa if you’re an employee of an overseas newspaper, news agency, or broadcasting organisation assigned to the UK long-term.

Legal Requirements for Establishing a Business in the UK

Employment Laws

Compliance with UK employment laws is crucial. Businesses must meet National Minimum Wage and National Living Wage requirements, provide written employment contracts detailing salary, working hours, and job descriptions, and adhere to health and safety regulations to maintain a safe working environment.

Additionally, businesses must comply with anti-discrimination laws to prevent unfair treatment based on race, gender, age, disability, and other protected characteristics.

Following an acquisition, those who incorporate in the UK must also comply with the transfer of undertakings (TUPE) regulations. 

Compliance with Employment Acts

• Employment Rights Act 1996: Covers employee rights related to contracts, dismissal, and redundancy.
• National Minimum Wage Act 1998: Ensures employees receive at least the minimum wage.
• Health and Safety at Work Act 1974: Requires businesses to provide a safe working environment.
• Equality Act 2010: Prohibits discrimination based on protected characteristics like age, gender, race, and disability.

Right-to-Work Checks

Employers are responsible for conducting right-to-work checks to confirm that employees have the legal right to work in the UK. This involves obtaining and verifying original documents that prove the employee’s eligibility to work, such as a UK passport, immigration status document, or a valid work visa for non-UK nationals. Employers must retain copies of these documents and record the check date to ensure legal compliance.

UK Tax Obligations for Businesses

Corporation Tax

The Corporation Tax rate in the UK is 25% for businesses with profits over £250,000. For companies with profits of £50,000 or less, the rate is 19%. There is a tapered rate for profits between £50,000 and £250,000, where the tax rate gradually increases from 19% to 25% as profits rise. Subsidiaries may pay corporation tax on worldwide profits, while branches pay only on UK profits.

Double Taxation Agreements (DTA)

Global Income

• Income earned outside the UK may be subject to tax in the country of origin and may benefit from relief under double taxation agreements (DTAs). Most countries have a DTA with the UK. You can see if yours does here.

Business expansion to the UK from India

• The trade and investment relationship between India and the UK is robust, with numerous opportunities for collaboration in technology, pharmaceuticals, manufacturing, and other sectors. The India-UK DTA ensures that profits earned in the UK are not taxed again in the parent company’s home country.  This reduces the overall tax burden and simplifies compliance for companies expanding into the UK market.

VAT

Register if taxable turnover exceeds £85,000 per year. VAT is charged on goods and services provided in the UK.

Payroll Taxes

Employers must pay National Insurance Contributions (NICs) for their employees. Employees have NICs deducted from their wages. In 2024, this is at a rate of 13.8% on earnings above £9,100 per year, 10% on earnings between £12,570 and £50,270, and 2% on earnings above £50,270.

Auto-Enrolment Pension Contributions

Under auto-enrolment regulations, employers must contribute to employees’ pensions. The minimum employer contribution is 3% of qualifying earnings.

Market Research

Most companies launch an extensive period of market research before UK business expansion. This might include visiting the country to establish connections, gain valuable intel and identify gaps in the market. Typical activities include:

• Competitor Analysis
• Consumer Behaviour Analysis
• Determining Entry Strategy
• Forming Local Partnerships

A Business Visitor Visa permits short-term stays of up to six months. You cannot profit from your trip, and some business activities are prohibited. However, the visa is ideal for businesses looking to scope out the UK, attend conferences, and paint a picture of their business landscape.

It is suitable for assessing business locations and determining fees and laws involved in commercial leaseholds, as well as negotiating or signing business contracts.

Benefits Of Expanding In The UK

Access to a Global Financial Hub

The United Kingdom is a global financial centre with access to various funding sources, investment opportunities, and a solid economic infrastructure.

Gateway to the European Market

Setting up shop in the UK provides strategic access to the larger European market, enabling prospective alliances and commercial collaborations. The diversified and dynamic UK market offers numerous chances for firms to expand their product or service offerings and reach out to different consumer categories.

Innovation and Technology Hub with Skilled Talent Pool

The UK is an innovation and technology hotspot with London renowned around the world. The Uk provides access to cutting-edge breakthroughs and fostering collaboration with premier research institutes. UK businesses have access to a diversified, skilled workforce that can contribute to innovation and productivity.

Strategic Location and Infrastructure

The United Kingdom’s strategic location promotes efficient logistics and supply chain management, which is reinforced by a well-developed infrastructural network.

Networking Opportunities

The UK provides numerous networking opportunities through industry events, corporate forums, and professional groups, facilitating beneficial connections and collaborations.

Financial Incentives and Support Programs

Immigration Advisory Service is pivotal in facilitating a seamless expansion for Indian businesses into the UK. With a team of expert immigration specialists, IAS provides:

Businesses developing in the UK can take advantage of various financial incentives, subsidies, and assistance programmes designed to stimulate growth and development.

How IAS Can Help With Your Expansion In The UK

• Invaluable guidance on navigating the intricacies of UK immigration rules.
• Ensuring compliance.
• Determining the most suitable visa categories for your workforce.

From initial consultations to the completion of the application process, IAS offers comprehensive support, minimising complexities and maximising efficiency.

Trust IAS to streamline your immigration journey, allowing you to focus on the core aspects of your business expansion. For expert guidance tailored to your needs, call +44 (0)333 305 9375 or visit us online and embark on a successful venture in the UK.