Setting up a Business in the UK
The United Kingdom is a renowned destination for international investors and entrepreneurs. Indeed, business innovation is something which the UK government has actively encouraged over the last couple of decades.
With one of the largest economies in the world and activity across many sectors, the UK is an extremely attractive place to do business. Sectors such as technology, finance, food and catering, service, renewable energy and agritech have seen tremendous growth and innovation over recent years.
In this post, we set out what you need to know if you want to start a business as a resident of Dubai. What you need to do depends on your own individual circumstances, the nature of your business and what you propose to do in the UK.
Setting up a Business in the UK as a United Arab Emirates Resident
Setting up a business in the UK from abroad is quite straightforward. In fact, the process of registering a business in the UK as a foreign national is no different from that of a British national.
It is possible to register a limited company in the UK from Dubai. You can set up a business in the UK or expand your current business activities through choosing how your company will operate in the UK. You can establish your business as a separate legal entity through the formation of a private limited company, as a sole trader or in a partnership.
The process of registering a private limited company online (otherwise known as incorporating) is less than 24 hours.
Before you begin the process of incorporating your business, it is important to have a business plan. You will need to research the UK market and prepare for budget forecasts. Your business ideas must be deemed to be likely to succeed and be sustainable too.
You will also need to decide on the structure of your business (more below).
How do I Start my Own Business in the UK?
If you want to set up your business in the UK, you will need:
- A unique name for the company
- A business address. (This can be any UK address)
- At least one director. This person must be at least 16-years-old, but they do not need to be a UK resident
- At least one shareholder. This can be the director or any number of people
- A company secretary
As part of the process of setting up a business, you will need two sets of documents when you set up your business which are the ‘memorandum of association’ and the ‘articles of association’. These are legal statements signed by all initial shareholders and involved parties who are agreeing to form the company.
As alluded to, it is not legally required for the director and shareholder to be resident in the UK to set up the company. However, it is important to note that many UK banks will require you to have UK-resident directors or shareholders before you open a UK business bank account.
Different Types of UK Business Structures
There are a number of different types of business within the main three categories of limited company, sole trading and partnership. You will need to determine the type most suitable for the structure of your business.
Setting up as a sole trader is the simplest method of starting a business in the UK. You will be responsible for the finances and accounts of your business, including business debts. As a sole trader, you can keep all of your profits.
Private Limited Companies
If you decide to form a limited company, you will be required to undertake reporting and management responsibilities. With a limited company, your personal finances are separate from the company’s.
If you are looking to set up a UK limited company from Dubai, our expert UK immigration lawyers can offer you all the assistance you may need. Call us now on 0333 305 9375 to book an appointment with one of our business immigration advisors.
Public Limited Company (PLC)
Public limited companies differ from private limited companies in that the shares can be traded publicly. You must have a share capital of at least £50,000, and 25% of this must be paid prior to the business starting.
A general partnership means two or more individuals or companies who set up together with shared responsibility from the business between the profits.
Profits are shared equally, and each partner must pay tax on their share and are jointly liable for debts and losses.
With this form of business partnership, at least one general partner runs the business and is personally liable for any business debts.
The partnership has one limited partner who contributes financially and is only liable for the amount which they choose to contribute.
Limited Liability Partnership
This is an agreement which means that neither party in the partnership is personally liable for debts which the business cannot pay. This type of partnership must be registered with Companies House and requires a written LLP agreement.
Registering a Business at a UK Address
The major stipulation for registering a business in the UK is that it must be registered to a UK address.
It is actually very simple for you to acquire a UK address from Dubai and once you have done so, you need to register it with Companies House.
The property can even be a property of a friend or family member, a rented property, a virtual or the property of anyone else who agrees to have your business registered to their address.
Registering for Corporation Tax and to HM Revenue and Customs
You will need to register for corporation tax when you set up your business. It is possible to do this at the same time as when you register your company. You must register for corporation tax within three months of the start of your business operations in the UK.
Business operations relates to any business activity including selling, buying, advertising, renting a property or employing someone.
You will be given a Unique Tax Reference which must be posted to your company address before you complete the registration.
You will need to register with HMRC for tax purposes once you have established the key roles in your business too. Limited companies must register with Companies House.
What is UK Corporation Tax?
The current UK corporation tax sits at 19%. However, this will rise to 25% from 2023. In spite of coming raise in corporation tax, the UK will still have the lowest corporation tax rate in the G7 group of leading nations.
The VAT rate in the UK currently stands at 20%, but UK businesses can benefit from tax credits for research and development.
A relatively healthy market and large workforce, in spite of the COVID-19 pandemic, makes the UK one of the most attractive countries in the world to conduct business in.
What are the Different Business Visas in the UK?
In order to run a business in the UK, you must apply for one of the UK business visas. There are different requirements for each of these visas.
The Start-up Visa is for new entrepreneurs who have a business idea which has been endorsed by an authorising body. You need to prove that your business idea is new, innovative and that there is potential for growth.
The Innovator Visa is for those with more experience. You must have at least £50,000 in investment capital and your business idea must have been endorsed by an authorising body.
This visa is for those who have at least £2 million to invest in the UK economy. This exclusive visa offers holders the chance to apply for Indefinite Leave to Remain status after just three years of UK residency, or even two (depending on business activities).
You can apply for any of the UK business visas from Dubai. To find out more about any of the visas, including the full requirements and application process, please call our friendly team now on…
How Much Does it Cost to Start a Business in the UK?
This all depends on the structure of your business.
The current fees are as follows:
- Registering as a sole trader: Free
- Registering a limited company: Costs between £12 and £100, depending on the method chosen
- Registering in a partnership: £20, or £100 for registration on the same day
- Registering as a limited liability partnership: Costs between £10 and £100 depending on the method chosen
I Want to Employ Staff in the UK. What Do I Need to Know?
If you want to employ foreign staff in the UK, you will need to ensure that you abide by the relevant laws and regulations.
Firstly, you will need to register as an employer with HMRC and get employers’ liability insurance. You will also need to apply for a sponsorship licence if you wish to hire overseas nationals to work in the company.
You must abide by minimum wage rules and make all necessary social security and pension contributions.
Last modified on February 14th, 2023 at 5:50 pm
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The Immigration Advice Service is a leading immigration law firm with a wealth of experience in the field of UK business immigration law.
We understand that the process of setting up a business in the UK from Dubai might be a daunting one, not to mention a complex one.
We can support you throughout the process with our application package. We can help you to set up your business and apply for one of the UK business visas too.
We will simplify the whole process and inform you of everything you need to know, helping to ease some of the stress you might be feeling.
Our immigration lawyers understand what it takes to set up a business in the UK and begin your journey as an entrepreneur and investor in the UK.
To find out more about our services, please call us now on 0333 305 9375.
The general procedure for starting a business in the UK is as follows:
- Ensure you are eligible for a visa
- Decide on the structure of your business
- Set out your business plan
- Register your business, which includes choosing a business name, a UK address and assigning a director and shareholder
- Register with HM Revenue and Customs for tax purposes, including corporation tax
Also, you ought to check whether you need to apply for any additional licenses and permits, as well as business insurance.
Yes, if you want to start a business in the UK you will need to register your business. You will need:
- A unique name for the company
- A business address. (This can be any UK address)
- At least one director
- At least one shareholder
- A company secretary
No, if you are a sole trader you do not need a business bank account. However, it is something we recommend to make account procedures simpler.
Most of those who want to set up a business in the UK will do so through sole trading, as a limited company or through a partnership.
However, there are other business structures in the UK, including:
This uncommon business type involves shareholders having joint unlimited liability for business debts. This means that shareholders can be covered with personal assets if business assets are not meeting debts.
A social enterprise is one which invests any profits made to charitable, social or community objectives rather than to distribute the profits among shareholders.
Social enterprises are structured similarly to limited companies.