Looking to do some businesses in the UK? Here are important things to remember while doing business as an American Entrepreneur in the...
There are plenty of reasons why American entrepreneurs might want to expand their business to the UK: they have a stronger currency rate, London is a great financial hub, and tapping into the United Kingdom's market can be a smart way to increase your customer base and gain more exposure. You don't even have to be a giant company like JP Morgan Chase to set up a base in the UK. There are some hoops you'll have to jump through, but if you follow the country's requirements, you should be able to get your small business off the ground overseas.
To get a thorough understanding of what you'll need to do in order to either invest or do business in the UK, I'd recommend checking out this guide. If you're still at the stage of trying to decide whether it's worth it for you to expand to the UK, keep reading to learn some of the general steps you should take.
Register as an overseas company.
If you run a small business in the US but want to open up an office in the UK, you'll need to fill out a specific form (OS IN01) and send it to Companies House along with a £20 (current $33 US dollars with the exchange rate) registration fee. Companies House is the official UK government register for businesses, and they're also the organization with whom you'll have to file your company accounts and tax return.
Apply for necessary licenses.
Depending on the type of business you're establishing, you may need to apply for certain licenses. For example, if you're opening a restaurant and also want to be able to serve alcohol, you'll need a premises license, a food business registration, and a personal license to sell alcohol. The specific licenses you need will vary somewhat between England, Wales, and Scotland, so use this license finder to determine what type of licenses you'll need for your particular business in each region.
Set up a business bank account.
To avoid the cost of the exchange rate, you'll likely want to either open a new UK bank account or set up a UK sterling account with your own US bank, if that's an option they offer. If you decide to open up a UK bank account, you'll first need a physical address in the country.
Pay National Insurance.
If you're self-employed and make more than £5,725 (about $9,500) a year, you'll need to pay National Insurance Contributions. In some cases, you may also need to deduct National Insurance contributions from your employees' wages. You can learn more here.
Register for VAT.
If your UK business turnover is more than £79,000 (about $130,000), you'll need to register to pay value added tax (VAT). Once you've successfully registered, you'll be sent your VAT number, your date of registration, and information about when to submit your first VAT return and payment. You'll be responsible for charging the right amount of VAT, paying any VAT due to HM Revenues and Customs, submitting VAT records, and keeping detailed VAT records and accounts.
If you're planning to keep the American branch of your company open, many of your current employees will likely be staying in their home company, and you may need to make local hires for the UK branch. In order to start recruiting, post job listings on sites like LocalMart UK in order to primarily target people who already live in the area.
There's obviously a lot to be done when you decide to open a branch of your business in the UK, and this is just a general overview. However, if it's your dream to set up a business overseas, you shouldn't let yourself be daunted by the requirements. If you truly believe it's a smart business move to expand, then you should begin working on the registration process now so that you can set your plan in motion.
Juliana Weiss-Roessler is a freelance writer living in Austin, TX. Together with her business partner and husband Josh, she has written and edited hundreds of articles, press releases, and other marketing materials for a variety of publications and businesses. Learn more about her work on WeissRoessler.com.
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