Are you ready to set up a business in London?
If you are interested in starting and setting up a business, better pack a travel-size umbrella and head on to London! The UK capital is one of the most forward thinking, dynamic and exciting cities in the world. The ease of doing business in London, the skilled workforce, strong government support, innovation and infrastructure are some of the reasons why international business are tempted to setting up here.
London, with six airports and far-reaching high-speed rail links, brings you closer to new and existing customers across the UK, Europe1 and world. London is also the leading location for European headquarters, attracting more foreign investment than any other European country.
No matter how many times you have visited the UK and its capital, here are some tips to help you make the right choices when it comes to deciding on legal entities, establishing a bank account, networking and finding office space.
Setting up a legal entity
When you decide to start a business, you have many decisions to make. Arguably the most important decision you will make is which form of a business entity to establish. Immigration applications for inter-group transfers can only be made if you have set up your UK entity as either an establishment or a subsidiary. The two most common legal entities are a UK private limited company (PLC), or a UK branch of your existing overseas company, known as a UK establishment. If you want to build up trust, it is useful to know that most customers and suppliers prefer to do business with a UK company, so setting up a PLC is usually the best option.
Opening a bank account
If you decide on setting up a subsidiary company in London, then you are more likely to open a UK bank account so you can handle your business transactions. Different banks will offer a range of services to suit businesses, so it is worth researching which one best suits your needs best. Once you come to a decision, make sure you have all the required documentation to satisfy the bank criteria. Since the 2008 financial crash, banking regulations have been tightened up significantly and have much tougher checks in place for overseas-based customers setting up here.
You will need to show paperwork detailing your company activities, your company registration number, certificate of incorporation for overseas companies, projected turnover, transactions details, directors and beneficial owners and principal controllers, including the personal addresses and dates you moved in the country. Once you have your business banking in place, it would be advisable to look into payment integration initiatives that aim to simplify bank transfers conducted in Euros, such as the Single Euro Payments Area (SEPA) for example.
Whether recruiting staff from the UK or Europe or bringing in experienced staff from overseas, you should ensure that you put in place employment agreements to outline areas such as remuneration, termination of notice provisions, restrictive covenants, etc. Determining employment status is important for such matters as National Insurance Contributions and the level of taxation of income.
There is an obvious advantage to hiring local talent from London. Firstly, they will already be familiar with local customs; they may have already worked with business partners you wish to deal with; and will have the same mind-set as your target consumers. Relocating staff from overseas may seem advantageous because of their work experience, but you have to consider the extra expense it generates. They will need to find a new home to move to, find school places for their children, sell or rent out their existing home, all of which is distracting and time consuming and could affect your productivity in a negative way.
Establishing Your Office
Great care must be taken when planning to set up an office in London. Finding and moving to a new office can be a stressful time as it requires months of planning and lots of organisation, from finding new premises to liaising with fit out contractors and coordinating movers.
Before you choose a commercial property to rent or buy in London, you should think about which of the premises is most suited to your business. You may also wish to consider the space, facilities, budget, productivity, legal requirements, but most importantly – an area that often gets overlooked – IT infrastructure. Connectivity and communications are the lifeblood of most organisations. If your systems are not working, you are unable to send or receive emails or if your phones are not ringing in your new offices, you are unable to communicate with your customers effectively.
Once you have a plan set out, you will then need to search around for suitable office space within the city, and consider what sort of contract or lease you want to sign up for. Remember to set a realistic timetable for your search. Take into consideration the length of time you will need to negotiate and fit out your office, as well as the time needed for connection to essential telecommunications and IT solutions. Most overseas companies setting up office in London are not aware that it can take up to six weeks to install digital telephone lines and up to sixty working days to install and equip leased internet provision.
Never assume that service costs will be the same as what you are used to at home. You may be able to negotiate a lease agreement for more favourable terms, but if you are not confident about doing this, or are not familiar with the statutory regulations, contractors and suppliers yourself, you may end up spending out more than you anticipated.
Leasing practices are based upon UK land law, so it’s always best to seek advice from professionals, and in the long-run, it may be wiser to go with a professional fit-out company that has experience of setting up overseas company offices in London.
Are you ready yet?
According to the World Bank, the UK is the easiest place to set up and run a business in Europe2. However, our experience suggests that setting up in the UK can be complex because there are so many factors to consider when moving here – decide on a type of legal entity, establish a bank account, organise Visas, employ staff, find the right office space, etc. KSBC offers a helping hand to overseas companies looking to operate in the UK market and provides services aimed at making your UK expansion as seamless as possible.
The key to any successful set up is careful planning. Our IT experts will work closely with your team during the planning phase of your office to make sure your technology is integrated into the design and fit-out of your new office. While we take care of your IT and communications requirements, we have a professional network of commercial property agents, lawyers and workplace planning consultants who can assist you in every aspect of the process, ensuring that your office move runs smoothly. All you have to do is seek KSBC’s advice from the beginning of your UK setup.