CORPORATE | PRIVATE CLIENT | FUNDS

Doing business
in the UK
 Foreword
Table of contents
The United Kingdom (UK) has long been
Part 1: Introduction: Doing business in the UK a nation of international trade, and is
Foreword 03
Why the UK? 06
recognised as one of the world’s leading
What you need to know before entering the UK market 07 global finance centres. Despite Brexit,
Part 2: Company incorporation
it remains an attractive investment
UK company registration 10 destination and a springboard for
A prime location for international holding companies 12 businesses seeking global growth.
Case study 14
Your trusted partner in the UK 16
Our services in the UK 17 Being the sixth largest When businesses are considering Hawksford’s team of UK experts
economy by gross domestic expanding their operations have extensive experience and
product (GDP), with its internationally, understanding local expertise in helping foreign
practices and market regulations can businesses tap into the UK market.
extensive tax treaty network,
make a huge difference to their initial We assist multinationals, small and
political stability and well- experience and ongoing success. medium-sized enterprises (SMEs),
regarded judicial system, This is especially true for the UK, and entrepreneurs from around
the UK continues to be a where doing business comes with the globe in starting, running and
key location for many of some unique benefits and challenges. growing their businesses in the
our clients’ international UK, while being ever mindful of the
expansion plans. This guide provides an overview implications the global political and
of what you need to know when economic landscape may have on
According to the latest UK government considering doing business in the
our clients and their businesses.
data, between 2021 to 2022 a total UK. It includes the fundamentals
of 1,589 foreign direct investment of investing, from setting up a
(FDI) projects landed in the UK, company in the UK to successfully
providing more than 84,000 new running a business.
jobs to the economy. The top three
sectors involved in these FDI projects Within this guide, you will find an
were software and computer overview of the various company
services; environment, infrastructure types available in the UK, as well
and transportation; and financial as the incentives, policies, and key
services. Whether you are a start-up, considerations to be aware of.
a medium-sized or family business, a
corporate or an institutional investor,
the UK can support the realisation of
your international business ambitions.

02 Hawksford Doing business in the UK 03

 Part 1: Doing business in the UK

04 Hawksford Doing business in the UK 05

Why the UK?
The UK offers a robust, business-friendly
environment to reliably expand,
trade and invest.
It has a mature, high-spending
consumer market and an open,
liberal economy, world-class
talent and a business-friendly
regulatory environment.
The language, legal system,
funding environment, time
zone and lack of red tape
helps make the UK one of the
easiest markets to set up,
scale and grow a business.
1. World-class talent
The UK is both a magnet for global
talent and a deep pool of high-skilled
homegrown talent. Employers can
benefit from a diverse workforce
with deep global connections to every
corner of the world – 300 languages
are spoken daily. The UK operates
a National Minimum Wage and a
National Living Wage, encouraging
people to work and prevent businesses
from competing unfairly. Yet, average The UK is the leading market in
UK labour costs are still the most
competitive in western Europe.
2. Business-friendly
environment
The UK has one of the lowest
corporation tax rates in the G20 and
is highly competitive within Europe.
Setting up in the UK means your
business can benefit from flexible
entrepreneur law and low-cost legal
structures, entrepreneur visas and
a series of tax incentives and reliefs
for both domestic and international
companies such as the Research and
Development Tax Credit, Venture
Capital Trust, and Enterprise
Investment Scheme (EIS) to name
a few.
06
3. A global innovation hub with
various grants and schemes to
support businesses
The UK is one of the most innovative
countries in the world – ranked
in the top four countries in the
Global Innovation Index 2022. More
than half of all UK-based research
and development (R&D) business
expenditure is undertaken by foreign-
owned companies. This is partly due
to the generous financial support and
tax incentives for innovation in the
UK. The UK also has a world-class
intellectual property (IP) regime to
protect innovative ideas. The UK’s
Patent Box also offers companies a
lower corporation tax rate of 10% on
profits from inventions patented in
the UK.
4. A leading market in Europe
for funding and investments
Europe for venture capital (VC) and
leads in terms of volume of funding
provided to start-ups, with total
funding exceeding US$19.6 billion in
2022. A variety of UK government
policies that incentivise VC investing
makes investors eager to explore
opportunities to fund companies in
the UK. Furthermore, the London
capital market is the largest
international stock market in the
world and was recognised as Europe’s
most active equity market in 2021.
5. An ideal location for
headquarters
The UK is centrally located and in
convenient time zones for companies
bridging the United States (US), Asia
and European markets. Sitting at the
nexus of European, Asian and US time
zones, the business opportunities in
the UK are extensive, attracting more
European headquarters (HQs) than
any other city. The UK also boasts an
extensive number of international tax
treaties, which is extremely relevant
when choosing a group HQ.
In conclusion
The UK’s business-friendly
environment offers investors access
to a market of more than 60 million
people, diverse suppliers and partners,
as well as benefits from a range of
programmes to help businesses of
all shapes and sizes grow.
What you need to know before
entering the UK market
With a range of tax, accounting,
and commercial issues to consider, it is
important to ensure your business is
set up correctly from the start and in line
with your strategic business objectives.
Although many foreign
companies have succeeded,
many have failed due to
inadequate planning before
establishing in the UK. Here’s
what you need to consider:
Incorporating a UK entity
■ What type of UK entity to set
up? (limited company/branch/
representative office)
■ Location of registered office?
■ How to deal with director
appointment and share issuance?
■ Will you have a physical or virtual
office in the UK?
Hawksford Doing business in the UK
Opening a UK bank account
■ What are the requirements to open
a UK business bank account?
■ How long does it take to open a UK
business bank account?
Complying with tax and
reporting obligations
■ How to register for VAT?
■ How to maintain accounting
records? (in-house vs outsourced)
How to align the accounting date
■
to that of your parent company?
■ What are the UK audit
requirements?
■ How to deal to transfer pricing?
Becoming a UK employer
■ How to hire UK employees and/or
have secondees from overseas?
■ How to prepare UK employment
contracts and staff handbooks
correctly?
How to manage payroll and
■
salaries, pension and national
insurance contribution?
■ How to apply for the right UK visa?
Reviewing and improving your
business
What does long-term success
■
look like?
■ Are mergers, acquisitions and
fundraising in the planning?
Where to expand to from the UK?
■
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 Part 2: Company incorporation

08 Hawksford Doing business in the UK 09

UK company registration
Foreign companies looking to establish
their presence in the UK have several
options that could be considered.

The principal ways for a foreign
investor or company to carry
out business in the UK are as
follows:
1. Limited company (subsidiary)
A limited company is a separate legal
entity with its own limited liability.
This is much more substantial than a
branch and offers greater assurance
for customers and others who come
into contact with the business.
Overseas companies establishing
a limited company in the UK may
do so by setting up a subsidiary.
The overseas company, as the
parent company, will have complete
ownership and shareholder oversight
of the UK subsidiary. The most
popular corporate vehicle is a
private company limited by shares.
Advantages of private limited
companies are:
2. Branch
The overseas company retains
ownership and control of the branch.
The branch will not have a separate
legal personality, so the overseas
parent company is liable for the
debts and obligations of the overseas
establishment.
A branch is often a favoured option
for overseas businesses in the early
stages of international expansion.
Once a solid business presence has
been established, branch activities
are usually transferred to limited
companies.
3. Limited liability partnership
(LLPs)
Limited liability partnerships (LLPs)
are separate legal entities and
must have at least two designated
members, which can be natural
persons or body corporates.
■ Corporate ownership – LLPs can
appoint two corporate entities
as members of the LLP (in an Ltd
company, at least one director
must be a real person).
■ Flexibility between designated and
non-designated members – you
can operate the LLP with different
levels of membership.
■ No capital maintenance
requirements.
■ Tax transparency – the profits,
losses, gains ‘flow through’ the
LLP to the members in accordance
with the provisions of the private
members agreement (ancillary
agreements) and associated profit
share entitlements.
4. Limited partnerships (LPs)
Limited partnerships (LPs) formed
under the Limited Partnerships Act
1907, are business associations made
up of one or more general partners
and one or more limited partners.
These partners may be natural
persons or bodies corporate.
General partners are partners
who have responsibility for the
management of the business,
and do not have limited liability
Limited partners do not have any
control over business decisions or
the operations of the business
(with some exclusions if it is a Private
Fund Limited Partnership) but their
liability is limited to the amount they
contributed to the partnership.
Similar to companies and LLPs, LPs LPs are often used as vehicles
must register with Companies House. for investment purposes in highly
complex and multi-layered investment
However, under the Partnership Act
structures and pension schemes.
1890 Scottish limited partnerships
(SLPs) exist as legal entities that
are separate from their partners.
This means that unlike those based
in England and Wales or Northern
Ireland, the Scottish variation has
‘legal personality’, allowing them to
hold assets and enter into contracts in
their own right.
Like all types of business partnerships,
LPs provide organisational flexibility
and tax transparency. What makes
this structure unique, however, is the
extent to which it can accommodate
the specific requirements of individual
investors as ‘limited members’.

■ Separate legal personality – the Advantages of LLPs are:

subsidiary can sign contracts on
its own behalf, own assets
and is liable for its own debts.
■ It can be formed with a single
member but has no statutory limit
on the number of shareholders.
■ Limited liability protection
– the liability of a company’s
shareholders is limited up to the
amount they have paid for their
shares in the company.
■ Incorporation can be undertaken
quickly in one day.
■ Only one director is required and
company secretaries are optional.
■ It is possible for a private limited
company to re-register as a public
company, subject to satisfaction
of certain requirements.
■ LLPs are a separate legal entity
from the members – the liability
of members can be limited to the
amount of their capital investment
in the LLP and limited liability
protects the members’ personal
assets from the liabilities of the
business.
■ No statutory upper limit on the
number of members (although
there must be a minimum of two
members).
■ Flexibility – the operation of the
partnership and distribution of
profits is determined by a private
written agreement between the
members, which allows greater
flexibility in the management of
the business.
■ The LLP is deemed to be a legal
entity – it can buy, rent, lease and
own property; employ staff; and
enter into contracts.

10 Hawksford Doing business in the UK 11

A prime location for
international holding
companies
The UK is considered to be
an excellent jurisdiction
for international holding
companies for many reasons,
including the following:
■ Most foreign dividends are exempt
from UK tax. Dividends received by
a UK company are exempt from UK
tax subject to certain conditions.
These conditions vary depending
on whether the recipient is a small,
medium or large company.
■ No UK withholding tax on dividend
payments to shareholders. The UK
does not impose withholding taxes
on the distribution of dividends to
shareholders or parent companies.
This is regardless of where in the
world the shareholder or parent
company is resident.
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■ No capital gains tax on the disposal
of shareholdings in subsidiaries,
subject to meeting certain
conditions.
■ No capital gains tax on profits
from the disposal of UK holding
company shares by non-resident
shareholders. Non-UK resident
shareholders are not subject to UK
capital gains tax on disposals of
shares they hold in a UK company.
■ The UK has an extensive double tax
treaty network, thereby minimising
withholding taxes on dividends
received.
■ No capital duties on paid-up or
issued share capital. A stamp duty
of 0.5%, calculated on the transfer
value of the shares, is payable on
subsequent transfers.
Hawksford Doing business in the UK 13
Case study

Hawksford helps
Gobi Cashmere
expand in the UK

Client profile Our solution Service provided

GOBI Cashmere is a Mongolian
cashmere producer, established
in 1981. It has become one of the
five largest vertically integrated
manufacturers specialising in
cashmere products made by
goat wool in the world, placing
sustainability, quality and
affordability at the heart of
its business.
We worked closely with GOBI ■ Incorporation services
Cashmere to help expand its
business into the UK market, ■ Company secretarial services
starting with incorporating a ■ Director services
UK entity, providing a UK director
for the client, and opening a UK ■ Accounting services
bank account. Within a short time,
■ Tax compliance
our client had established itself
within the UK and was operating ■ Payroll administration
successfully and efficiently.

Client’s objective In addition to assisting GOBI

Cashmere with its UK company
Following its success in reaching
incorporation, we provide annual
out to customers in Europe, the US
accounting services, financial
and internationally, GOBI Cashmere
statements, tax declarations, and
established a subsidiary in Germany
other ongoing general administrative
and was looking to establish a similar
services. We continue to act as a
setup in the UK. The company was
trusted partner to the business,
in need of a reliable professional
proving support through every
services provider that could help
step of its growth journey.
with incorporating its UK entity,
while assisting with accounting
and tax compliance and
administrative services.

“Hawksford has helped us from the beginning by helping

us incorporate a UK entity for our business, providing a
UK director, registering us for VAT, and opening a UK bank
account. Within a short time, we were established in the
UK and operating successfully and efficiently with their help.
They are well suited to providing us with accounting services,
financial statements, tax declarations, and other general
administrative services.”
Anujin Baasanjav, Head Accountant, Gobi Cashmere UK Ltd

14 Hawksford Doing business in the UK 15

Your trusted partner in the UK
Our service philosophy focuses on guiding
you through the steps of starting, managing
and growing your business in the UK.
Our clients range from SMEs to large
corporates and multinationals.
Hawksford is an international
provider of Corporate, Private
Client and Fund services, with
more than 500 people globally.
With extensive experience and
expertise in providing company
incorporation and outsourced
corporate services in the UK, we
offer customised solutions for your
incorporation, tax and accounting;
and business support needs.
We understand and navigate the
regulatory and tax environment
and guide you through the steps of
starting and managing a business.
With a global presence, including
offices across Europe, Africa,
Asia and the Americas, our
multilingual team of experts have
extensive experience supporting
global businesses with entering,
establishing, and flourishing in
international markets.
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We are familiar with helping
businesses of all sizes with their
business journey – from starting-
up, raising venture funding, listing
on a global exchange, acquiring, or
merging with another company,
and using the UK as a base to
expand into other markets.
Our specialists in the UK will assist
you through all stages to ensure a
smooth expansion for your business
into the UK. Our comprehensive
services means that you can remove
yourself from the stress of local tax,
compliance and regulatory burdens,
allowing you to focus on your
business growth, with the
right partner by your side.
We offer:
■ Local knowledge
■ Leading service providers
■ Industry experts
■ Account manager models
■ Multilingual teams
Our services in the UK
Our core services in the UK
include:
Business establishment
■ Incorporation of local companies
and registration of representative
office, subsidiaries and branches
of overseas companies
Provision of registered office address
■ fund and National Insurance (NI)
■ Provision of company directors
■ Provision of virtual office
■ Registration of company changes
(such as legal representative,
registered capital and address)
■ Ongoing corporate secretarial
services
■ Bank account opening
Hawksford Doing business in the UK
Tax, accounting and
HR solutions
We provide ongoing business support
with services and expertise in:
■ Bookkeeping and preparation of
year-end financial statements
■ Payroll calculations – PAYE, pension
Contribution
■ Corporate tax return preparation
and filing
■ Quarterly VAT preparation and
submission
■ Audit liaison
■ Personal tax filing
■ UK employment contract
Immigration advice
and applications
We work closely with, and can
introduce you to, a third-party
service provider who can assist
you with various visa applications
and renewals, as well as various
permanent residence schemes.
Tailor-made services
■ Special purpose vehicle
(SPV) management
■ Real estate investment
management
■ Financial Conduct Authority
(FCA) outsourced services
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 Thinking beyond
tomorrow

www.hawksford.com
Hawksford comprises a number of companies operating in multiple jurisdictions. For further information regarding these
entities and their regulatory status, please visit: www.hawksford.com/regulatory. This guide is designed to provide introductory
information to clients and does not constitute professional advice. It is of a general nature only and is not intended to be
comprehensive. Readers are therefore advised that before acting on any information obtained from this document, they should
discuss their particular situation with a professional tax adviser. While care has been taken to prepare this report accurately,
Hawksford accepts no liability for any errors or for any loss, of any nature, to any person by reliance on this report.

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