“Going Global” has been defined as the global movement to financial, economic, communication, and trade integration and can be traced all the way back to the Roman Empire.
Extending your business overseas is not for the faint of heart, but it is inevitable for most businesses as global markets offer greater opportunities. Expansion of a business overseas is still a daunting step that should not be taken lightly.
The decision is even more complex and risky for any business owner or entrepreneur when you plan on expanding your business internationally. Unless you have strong global expansion and relocation experience, you probably have a lot of questions and don’t know where to start with your planning, which is where Business Concierge Services like those offered by The One World can help you.
Here are the 10 things you need to consider when expanding your overseas business:
One of the first and most important considerations should be how much it will cost the businesses to expand internationally. The costs of doing business in another country include workspaces, travelling, customs, logistics, and manufacturing. These costs vary greatly between countries and regional areas, with some being distinct to international expansion.
You don’t want to face unexpected cash flow issues, so create a list of all your outgoings and double-check that they balance against the prospective revenue and profit. If financial expansion does seem to be a good idea, it has the potential to be very successful if properly planned.
Before you can start a business in the UK, you must first obtain the necessary visas.
Immigration laws in the UK have recently changed because there is a new Visa for international businesses looking to establish themselves in the UK.
The new UK Expansion Worker Visa, which replaces the Representative of Overseas Business visa, is intended for specialist employees and senior managers who are briefly assigned to the UK to collaborate on the expansion of an overseas business in the UK. Sponsors can send up to five workers at once.
The UK Expansion Worker route is only available if the UK business has not yet begun operations. If the company is already operating in the UK, you should instead apply for a Global Business Mobility – Specialist or Senior Worker Visa.
The UK Expansion Worker Visas do not automatically lead to permanent residence in the United Kingdom. You may, however, be able to switch to another immigration route that leads to settlement. A partner and dependents may accompany or join applicants.
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Setting up the Business
The process of forming a company varies depending on the type of company, but the conventional registration process is as follows:
Acquire a registered office in the United Kingdom, in the same country where the company is registered.
Choose a business name and verify its availability.
Prepare all the necessary registration documents.
Open a new business bank account in the United Kingdom and deposit the required share capital.
The legalities for businesses are quite strict and can be quite overwhelming – these are some of the things that you MUST do when setting up an overseas business in the UK:
- Register your company at the Companies House
- Register with the UK’s HM Revenue & Customs.
- Register for a VAT Number.
- Register with National Insurance to pay social security contributions from employers and employees.
VAT is a sort of consumption tax, which is a tax applied on purchases of goods and services as well as other “taxable supplies.” The value-added tax (VAT) plays a vital function for businesses and can be assessed on a variety of your services and goods. Charities will be subject to different VAT regulations.
If you have a branch or subsidiary, the VAT laws are the same as for local businesses, and you must file for VAT if you exceed certain thresholds.
If your annual turnover is £85,000 or more, you must register for VAT. Alternatively, if you want to take full advantage of some of the benefits of VAT, you can always register voluntarily.
Because UK legislation includes double taxation treaties, you’ll likely find that corporation tax is really where the majority of your money goes. Excessive interest rates between the parent company and the new UK branch are explicitly forbidden and cannot be used to counterbalance corporation tax.
The business helps to protect you from losses experienced during the operation of your company, such as if a client or employee files a claim against you or if your equipment is destroyed.
The different types of business insurance that you need to be aware of are:
- Employers’ liability insurance
- Business interruption insurance
- Professional indemnity insurance
- Public liability insurance
- Product liability insurance
- Business contents insurance
In any international endeavour, the currency is a hot topic. To begin with, exchange rates vary considerably, sometimes dramatically. Because you can’t peg your rates to the international exchange rate, this increases the risk of expanding your business internationally. You may find yourself selling goods at a loss during periods of extreme volatility, such as those experienced recently in Venezuela.
You will also need to set up a UK bank account. Have a chat with your own bank and see if they themselves have a subsidiary or branch in the UK, if not, you will have to speak to a UK bank and get an account set up. This can be somewhat of a lengthy process as they have to do a number of checks to ensure that you are legitimate and won’t be laundering money from the bank account.
Employees have certain legal rights, such as pay, working hours, holiday entitlement, family leave, sick pay, termination notice, and dismissal. The UK rules are less stringent than in some other European countries, despite their length. Each employee has the right to a contract of employment which will include terms of their employment and the duties they are expected to do, which they will expect.
A simple letter of employment offer, which may be more common in some countries, would be insufficient. Basic terms such as pay, sick leave, a minimum of 28 days of vacation, including national holidays (for full-time staff), notice periods, and grievance and disciplinary process must all be included in the contract or statement.
Many industries in the UK are regulated (for example, financial services and consumer law transactions), giving businesses and investors’ confidence to do more business and ultimately invest here. Regulatory compliance is a requirement for all businesses operating in the United Kingdom. Noncompliance can result in serious civil and criminal consequences. As a result, it’s a good idea to seek advice early on how to become and stay compliant with the rules and regulations that apply to your company, for example consumer laws and export controls.
How a Business Concierge Could Help You
A business concierge, such as The One World, is a type of industry service in which experienced professionals are committed to making business operations easier and more efficient by offloading time-consuming or complex tasks.
The One World have a dedicated team of experts to assist you with everything from registering your business to providing day-to-day administrative support, on-site assistance, and local knowledge and expertise. Get in touch with us today to book a Consultation.