Business growth: Expanding into the UK opens up immigration routes
Sable International MD explains the changes in UK’s new immigration system post-Brexit
With a new immigration system post-Brexit, there’s more opportunity than ever for SA businesses to expand their operations to the UK. There are good business growth prospects and the opportunity for business owners to obtain residency and to sponsor their family members to live in Britain. Sable International MD Scott Brown explains the changes and the processes.
The World Bank Doing Business survey perennially ranks the UK in the top 10 for ease of doing business. With the new points-based immigration system, there’s never been a better time to capitalise on business growth opportunities in the UK.
Previously, small business owners struggled to qualify for visas. While the sole representative visa was an option for senior staff from large corporations, there were limited options for business founders and entrepreneurs.
Now, senior employees can come to the UK to oversee the start-up of a new branch, which presents tremendous business growth opportunities and use the newly formed entity as an immigration vehicle to sponsor you and your family members to a life in the UK.
How to expand your business to the UK
The first step towards expanding your business into the UK is to consult a business relocation expert who can handle all the logistics and operational aspects attached to the expansion process and ensure that your visa application has the highest probability of success with the Home Office.
Phase 1: Business expansion
Your business expansion needs will be prioritised before any immigration talks can start.
For immigration purposes, you need to be able to show the Home Office that your prospective UK business is legitimate and the role being sponsored is a genuine vacancy. This takes careful planning and consideration. The process will broadly include:
- incorporating the UK entity;
- setting up a UK bank account;
- registering the entity for all business taxes required, such as corporation tax, PAYE and VAT; and
- registering for auto-enrolment (the UK requires businesses to have employees registered for private pension contributions).
Once the operational aspects of the business are taken care of, you will need to hire your first staff member who needs to be either a British citizen or have indefinite leave to remain (ILR) to serve as the authorising officer (often a senior staff member or a senior employee who works in HR) who takes responsibility for the company’s sponsorship licence) for the potential immigration phase to be viable.
Phase 2: Immigration vehicle
Your business needs to be a registered licensed sponsor before you can recruit staff from abroad and issue them with a certificate of sponsorship. Once your business is registered, relevant skilled worker or intra-company transfer visas can be applied for. This process typically involves:
- Getting a sponsor licence to hire foreign workers. There can be multiple candidates sponsored and the licence needs to be renewed every four years;
- Issuing certificates of sponsorship. This is specific to the candidate and role that is being sponsored and will need to be applied for and approved before moving onto the last step. Certificates may be issued for up to five years, at which point the employee may be eligible for ILR; and
- Starting the process of applying for a visa. Using the certificate of sponsorship, a relevant visa can then be applied for by the main applicant. A spouse and children under the age of 18 can come to the UK as dependants and will be free from any work and study restrictions.
On receipt of the relevant visa, you can book your travel and live and work in the UK for the duration of the visa. Most applicants choose to apply for a three-year visa initially, though five-year visas are possible. If the former, then a two-year renewal will need to be applied for at the end of the initial three-year validity. After five continuous years in the UK, you may qualify for ILR, followed by naturalisation (citizenship) a year later. Many people view this as a six-year route to British citizenship.
Business growth decisions to consider before making the big move
Many in SA are seeking a plan B, not just for their businesses, but also for themselves and their families. Establishing a business in the UK is a great way to relocate by relying on a range of visas for entrepreneurs and their dependants.
With a shared history going back hundreds of years, a common language and even similarities in corporate legal systems, the UK has always been a preferred expansion destination for SA business owners. However, there are important things to consider when looking to facilitate greater business growth.
Understand the business climate
As a prospective international business owner, it’s important to understand the business climate of any new country. International trade experts all agree that the UK’s political climate, trade regulations, financing and current business opportunities make it one of the most welcoming environments for entrepreneurs.
According to the UK government, more European companies locate their business headquarters in the UK than anywhere else. Gov.uk has multiple resources to support businesses, including a list of articles covering different aspects of the business (all labelled either “guidance” or “promotional”) as well as investor case studies and investment reports. Reading both sets of resources will give you a good indication of the opportunities available in your niche.
Establish your business structure
When you’re used to the business structures in your home country, those in the UK can seem foreign, but you’ll need to navigate them to get your business started. British companies have to register via Companies House. This is where you’ll find out if your chosen business name is available and where you will complete all the business formalities.
If you’re going to employ people in your business, then you need to handle tax and national insurance contributions for employees via the PAYE scheme. The business structure you employ will also determine how you file for your taxes, whether you qualify for any tax benefits and the paperwork.
Establishing a subsidiary in the UK
A subsidiary operates as a separate legal entity from its parent company. If you wish to set up a subsidiary, you’ll need to establish a new UK company. This can be a complex process. The perks of this process are that UK firms tend to be more eager to conduct business with subsidiaries as they’re governed entirely by UK law. The parent company also can’t be held accountable for any decisions or actions made by the UK subsidiary.
Establishing a branch in the UK
You can establish a presence in the UK without the need to form a separate company/subsidiary. While a permanent establishment/branch must be registered in the UK, it is not a separate legal entity in its own right, but rather forms part of the overseas company. Should your UK branch be unsuccessful, you’ll be able to close it without any formal notice.
Seek local financial and legal advice
The UK’s laws and regulations are highly accommodating for business. Despite this, the legalities of conducting business in the UK will still be different from that of your home country, however, a local expert can help you navigate these.
For example, you shouldn’t apply the same employment contract in the UK as you did in your home country, as it can leave loopholes. Local knowledge in these spheres is indispensable and will benefit your business.
Start your journey towards international expansion
No big business decision is without its hurdles, but global expansion comes with its own set of obstacles. To ensure the process runs as smoothly as possible, you need to be able to rely on a business that can offer you a diverse relocation service as part of its product offering.
This article was paid for by Sable International.
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