Starting a Business in the UK as a Foreigner

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What should you know before starting a business in the UK?

Starting a business in the UK as a foreigner can be life-changing, but it’s important to be prepared. Depending on your nationality, you may need a visa to enter the UK, if you’re from any of these government-listed countries. As long as you have the right to work and live in the UK, you can begin to make your business dream come to life.

Before you get started, you’ll need to consider the following:

Legal structure: You’ll need to decide the appropriate legal structure for your business. You may choose to operate as a sole trader, which means you’re self-employed. As a sole trader, you’re solely responsible for running your business which includes being responsible for paying income tax and National Insurance. Alternatively, you may prefer to start a limited company. As a limited company, you and your business are treated as two separate entities, meaning the business itself is responsible for its liabilities, known as limited liability protection. Another option is operating as a partnership, which is where several individuals sign a partnership agreement to decide how the business is shared between them. In a partnership, all partners are responsible for the business’ debts and finances.
Visa: As mentioned above, make sure you have the right visa and work permits to start a business in the UK.
Taxation: Read up on the UK’s tax laws for businesses. Familiarise yourself with how corporation tax works, for example, which is calculated based on your company’s profit each year. The rate of corporation tax as of April 2023 is currently 25%.
Employment laws: Looking to hire some employees to help you get your business off the ground? Make sure you understand how the UK’s employment laws work, such as working hours, minimum wage, holiday pay and redundancy.

The benefits of starting a business in the UK as a non-UK national

If you’re looking to start a business in a globally-connected country with a buzzing business scene, there’s no better choice than the UK.

Here are just some of the benefits of starting your own business in the UK:

Support when you need it: Starting your own business can feel overwhelming - but you’re certainly not on your own. There are several useful resources available across the web, including the UK Government website which details everything you’ll need to set up your business. Looking to form a limited company? A company formation agent like SUAZ can take care of the complicated stuff for you, so you’ll be up and running in no time. We’re also there whenever you need us - if you’re worried about anything or need some advice, we’re a phone call away.
Thriving economy: With a population of over 67 million, the UK isn’t short of potential customers! In 2022, the British economy’s gross domestic product was 2.23 trillion pounds, making it the fifth-largest global economy. This enables new businesses to thrive, with funding and investment opportunities readily available. There’s even a government-backed Start Up Loan to help you get your business off the ground.
Skilled workers: By putting down roots in the UK, you’ll gain access to skilled and specialised workers who will put the work in to make your business a success.
Financial hub: London is home to the Bank of England and the London Stock Exchange (LSE), and is the world’s second-largest financial centre. It's known for its thriving business environment and reputation, so if you’re looking to make your mark in the business world, there’s no better place.

Are there any limitations a foreign national must overcome when starting a business in the UK?

There’s no doubt that setting up your business in the UK will be an adventure. Becoming an entrepreneur can be life-changing, but there are obstacles you may face - particularly if you’re looking to operate in the UK as a foreign national.

While you can register a business in the UK regardless of the passport you hold, you will require a physical UK address. This is where your official correspondence and business mail will be sent to.

If you’re not planning on renting a physical office in the UK, a virtual office may be the solution you’re looking for. A virtual office provides your business with an official address, without you needing to rent a physical space. This can save you a significant amount of money, help you get your business’ name on the map, and help you establish your professional image. As a limited company, you can choose to use a virtual office address when registering with Companies House - ideal if you don’t have a residential address in the UK.

Does a foreign national need a visa to start a business in the UK?

While you can start a business in the UK without a visa, you won’t be able to travel to and work under your company name in the UK without one. Having a business in the UK doesn’t give you the right to physically work there - so make sure you look into what visa you may need beforehand.

Not sure if you need a visa to start your business? The government’s website has a helpful tool to help you work out whether you’ll need a visa or not.

Innovator Founder Visa

The Innovator Founder visa, formerly known as Innovator visa, is for those looking to set up and run an innovative business in the UK. This means your business must offer something different from anything else on the market. You’ll need to meet various eligibility requirements outlined on the government’s website. You can apply for the visa online but you’ll need to provide several documents to support your application, so make sure you leave plenty of time to do this.

When applying from outside of the UK, as mentioned you’ll need to prove your identity. How you go about this will depend on the passport you have. You’ll either need to use your fingerprints and have your photograph taken at a visa application centre, or use the ‘UK Immigration: ID check’ app to scan your identity document.

How do taxes work?

Choosing to set up your business in the UK and deciding to live here as well means you'll need to pay taxes. You may need to pay the following, depending on your circumstances:

Corporation Tax: Paid by limited companies only, Corporation Tax is calculated as a percentage of your business’ profits or taxable income. It’s self-assessed, so you’ll need to work out how much Corporation Tax you owe and file a tax return with HMRC, along with your payment which is due nine months after the end of the business’ accounting period or year end. Currently, Corporation Tax is 25% as of April 2023.
Value Added Tax (VAT): If you’re selling products or services, you may need to charge VAT. Generally speaking, VAT is set at 20% of the price. You can register your business for VAT whenever you like, but you must legally register when your turnover exceeds £85,000.
National Insurance: If you’re looking to hire some employees to help you on your way to success, you must pay National Insurance contributions. This is paid directly to HMRC when you pay your staff. As a director of a limited company, you’re treated as an employee and will need to pay National Insurance on your annual income if it’s over £12,570.

How to register a business as a non-UK national

The company registration process for non-UK residents is no different to those living in the UK. But while you don’t need to live in the UK to register a company there, you are required to have a UK address.

Here’s how to register your business as a non-UK national:

Address: Make sure you have a physical UK address. This is the address that will be shown on the public register, and all correspondence from Companies House will be sent to this address. If you’re looking to save yourself the cost of renting a physical office space, you could opt for a virtual office address. Here at SUAZ, our virtual office service gives you a business address right in the heart of Manchester to help get your name on the map and give your business image a boost.
Decide on a name: You’ll need to choose a company name that is compliant and not already taken - you can check the availability of your business’ name on our homepage.
Register with Companies House: To officially form your company, you’ll need to register with Companies House. You can choose to do this yourself for a £50 registration fee, or, to alleviate some stress, you can get us to take care of things for you. Our professional company formation service will register your company with Companies House on your behalf for free, and your company will be formed within a maximum of 48 hours. It really is that simple.

Get your business up and running in no time

Starting a business can feel both daunting and exciting all at once - especially when you’re a non-UK national. But you don’t need to go through the process alone. If you’re starting a business in the UK as a foreigner, our company formation service could be just what you need to make things that bit easier to manage. We’ll handle the tricky stuff so all that’s left for you to focus on is your new adventure. Apply to form your company today and make your dreams a reality.