Despite a tumultuous fiscal year due to the coronavirus pandemic, the UK economy is on track to see a strong market recovery, with it expected to grow by 7.2% in 2021. The UK is home to a diverse economy that strongly encourages entrepreneurship, from the thriving economic and service hub of London to the booming ‘Northern Powerhouses’, which has allowed it to become a highly attractive place for both new and experienced business owners to set up a company. With that being said, it can be a somewhat complex process for foreign nationals to understand how to become a business owner in the UK, so it is important to note the several steps that need to be taken before an individual can start legally trading within the country.
- Check eligibility
The first thing individuals should check is whether their legal and residency status can permit them to set up a business in the UK. Foreign nationals wishing to become business owners will need to apply for either an Innovator or a Start-up visa. The process for Innovator and Start-up is very similar, with the exception of Innovator requiring a minimum investment of £50,000, whilst Start-up has no minimum investment requirement.
The start-up visa is designed for individuals looking to start a new and innovative business in the UK. This is a good option for budding entrepreneurs who have yet to own a business before. A major benefit of this visa is that there is no minimum investment required.
For more experienced business people, you can apply for the Innovator Visa. This can allow individuals to gain fast-tracked Indefinite Leave to Remain, which means these visa holders can become permanent residents of the UK within 3 years.
It would be a good idea to book a consultation with an immigration specialist who will be able to help determine your suitability for these visas, as well as guide you through the necessary steps to obtain them. This will improve your chances of being accepted for a visa, as well as help avoid common mistakes that can prolong the process or even void your eligibility. Bridgeway Trust, Citizenship and Residency Advisory Firm, offers free consultations where you can check your eligibility for any of the residency programs or if you need more information about setting up a business in the UK.
- Develop a business proposal
A prerequisite for gaining one of these visas is writing a business plan and developing an idea that has been approved by a government-approved body. This will help determine if your business idea is viable, scalable, and likely to succeed. For both the innovator and Start-up visa, applicants must present a business idea that is innovative, viable, and scalable through creating a detailed and thorough business plan.
The plan must show that the applicant has a genuine and original business idea that will meet market needs or create a competitive advantage. The plan must demonstrate that the business has good potential to create new jobs and to grow into either national or international markets. The plan must also show that the applicant has the necessary skills, education, and experience necessary to implement the business idea. For those following the innovator route, it is at this stage that applicants must provide proof that they have £50,000 in available funds that they can invest into their business.
- Receive an endorsement
Applicants must obtain a letter of endorsement from a government-approved body that must be submitted alongside their application, dated within 3 months of the visa application. The endorsing body would need to assess the innovativeness, viability and scalability of the business proposal and subsequently provide a letter that should include specific information about both the applicant and their proposed business.
- Proof of credibility
The government will then need to assess the credibility of the application and positively determine a genuine intention, capability, and the necessary skills, necessary to undertake the business plan. The government would also have to be sure that the applicant has the required finances and will not intend to work that falls outside the scope of their immigration visa. In evaluating these factors, the applicant may be invited to a credibility interview.
In order to be eligible for either the start-up or innovator visa, applicants must meet certain requirements. The applicant must be at least 18 years of age, as well as be capable of speaking English at a B2 CEFR level. This can be demonstrated by either being a native English speaker, have an English-taught degree, or pass a specified English language test. What’s more, whilst the Start-up visa has no minimum investment requirement, applicants for both this programme and the Innovator visa must have maintenance funds that will allow the applicant to support themselves and any dependents that are on the visa application.
- Set up your business
As and when your business proposal has been approved, you will need to decide on your business structure. That best suits your business model. You will need to choose a business address and name in order to register your company for tax purposes. You will then need to continue your business set up as per the business structure you have decided on, which will include opening a separate bank account, and register for corporation tax, as well as register with HM Revenue and Customs.
Once you have completed this business setup, you will need to check for any additional rules pertaining to your type of business, including licenses and permits. Providing that all of this has been completed, your business will now be ready to be operational within the UK and you will be able to start trading.