Starting a business in the UK as a foreigner might seem complex, but with the right guidance, it can be a smooth and rewarding experience. The UK is known for its business-friendly environment, robust legal system, and access to international markets—making it one of the top choices for entrepreneurs worldwide.
Whether you’re from the EU, a Commonwealth country, or elsewhere, this guide will walk you through the essential legal and financial steps needed to establish your business in the UK
- Check Your Visa Eligibility
The first and most crucial step is ensuring you have the right to start a business in the UK. Your visa status will determine what you’re legally allowed to do.
Options for Foreign Entrepreneurs:
- Start-up Visa: For early-stage but high-potential entrepreneurs who want to establish a business in the UK for the first time. Endorsed by a UK higher education institution or a business organization.
- Innovator Visa: For experienced entrepreneurs with an innovative business idea and at least £50,000 in investment funds.
- UK Ancestry Visa: For Commonwealth citizens with a UK-born grandparent, allowing self-employment.
- Global Talent Visa: Suitable for leaders in digital tech, arts, science, or academia.
- Sole Representative Visa: For employees of overseas firms setting up a UK branch.
Note: EU/EEA citizens with pre-settled or settled status can also start a business freely in the UK.
- Decide Your Business Structure
Once you have the legal right to operate, choose a business structure that fits your goals and scale.
Common Structures in the UK:
- Sole Trader: Simple setup, ideal for freelancers or single-owner businesses. You keep all profits but are personally liable for debts.
- Partnership: Two or more people share responsibility. Like sole trading, partners are personally liable.
- Limited Company (Ltd): A separate legal entity offering liability protection. It requires more paperwork but is often seen as more credible.
- Limited Liability Partnership (LLP): Common among professional services firms. Offers liability protection to partners.
For most foreign entrepreneurs, a private limited company (Ltd) is the preferred model due to credibility and tax efficiency.
- Register Your Business
For Sole Traders and Partnerships:
You must register with HM Revenue & Customs (HMRC) for self-assessment.
For Limited Companies:
You must register with Companies House, the UK’s registrar of companies. Here’s what you’ll need:
- A unique company name
- A UK address (you can use a virtual office)
- At least one director (you can be a non-UK resident)
- A company secretary (optional)
- Memorandum and Articles of Association
- Share structure and shareholder details
The process costs £12 online and is usually completed within 24 hours.
- Set Up a Business Bank Account
Having a UK business bank account is essential for managing finances, receiving payments, and building credit. Most banks will require:
- Proof of ID and address
- Your UK company registration number (CRN)
- Proof of your business address
- Details about your business activities
Tip: Some online banks like Wise Business, Tide, Starling, and Revolut Business make the process easier for non-residents.
- Understand UK Tax Requirements
Key Taxes You May Owe:
- Corporation Tax (19%): Paid on company profits.
- Value Added Tax (VAT): If your turnover exceeds £90,000 (as of 2025), you must register for VAT.
- Income Tax: If you’re self-employed or take a salary.
- National Insurance Contributions (NICs): For employers and employees.
You’ll need to:
- Register for Corporation Tax within 3 months of starting business activities.
- Submit annual accounts and confirmation statements to Companies House.
- File a Self-Assessment Tax Return if you’re a director or sole trader.
- Obtain Necessary Licenses and Permits
Depending on your business type, you may require specific permissions. Examples:
- Food business: Needs registration with the local council.
- Import/export: May need customs declarations and EORI numbers.
- Financial services: Requires FCA approval.
Always check with the UK Government’s License Finder Tool to identify industry-specific requirements.
- Set Up a Virtual or Physical Office
A UK business address is mandatory for registration. As a foreigner, you can:
- Rent a physical space (co-working or private office)
- Use a virtual office service for mail forwarding and a professional appearance
Some providers also offer company formation packages, combining a business address with secretarial services.
- Hire Employees (If Needed)
If you plan to hire staff:
- Register as an employer with HMRC
- Check the employee’s right to work in the UK
- Provide contracts, payslips, and workplace pensions
- Comply with the UK Employment Law, including minimum wage and working hours
You’ll also need to purchase employer’s liability insurance, a legal requirement.
- Keep Financial Records & Use Accounting Tools
Maintaining proper records is key to compliance and financial health. As a limited company, you must:
- Keep records of income, expenses, payroll, and taxes
- Submit annual accounts and tax returns
- Store records for at least 6 years
Popular accounting software in the UK includes Xero, QuickBooks, and FreeAgent. Consider hiring a local accountant who understands UK tax laws.
- Build Your Business Network & Online Presence
Finally, connect with local business communities:
- Join your local Chamber of Commerce
- Attend networking events and business expos
- Explore digital marketing, build a website, and use platforms like LinkedIn and Google My Business
The UK values transparency, trust, and professionalism, so focusing on a solid digital and offline reputation goes a long way.
Final Thoughts
Starting a business in the UK as a foreigner is absolutely achievable with the right planning. From securing the appropriate visa to registering your company, opening a bank account, and ensuring tax compliance—each step lays the foundation for long-term success.
The UK welcomes global entrepreneurs who bring innovation, jobs, and fresh ideas. Whether you’re launching a tech start-up in London, a food brand in Birmingham, or an e-commerce site from abroad, the opportunities are endless.
Plan smart, stay compliant, and you’ll be well on your way to building a thriving business in the UK.
For more information you can contact UK Property Inspection Report or call us at 07500242494 / 020 3129 5156.