How to set up a business in the UK
If you are new to the UK, you might not know how to start a business or even if starting your own business would be legal – but as long as you have the right visa and a good business plan, there should be no major obstacles to setting up a company or working as a sole trader in the UK.
Of course your business will still be affected by the usual market forces, profit and loss, cash flow and so on, so it’s no guarantee of success, but starting your own business is still a good way to start making a life for yourself and your family in the UK.
First of all, get the right kind of visa. A Tier 1 Entrepreneur visa is likely to be the best option if you’re from outside the European Economic Area – you can apply up to three months before you move to the UK and the decision usually takes about three weeks, leaving you plenty of time if your application is rejected.
What can I do as an Entrepreneur?
A Tier 1 Entrepreneur visa gives you the right to live in the UK for up to three years and four months, and this can be extended by an extra two years. After five years, you can apply for ‘indefinite leave to remain’, which would allow you to stay in the UK indefinitely.
You can bring your family with you, and starting your own business can either mean from scratch or buying an existing UK business as a foreigner – it’s up to you.
You can work for your own business and can hold self-employed status, but you can’t work for other businesses or do any other kind of paid external work.
Managing business finances as a foreigner in the UK
If you ask them how to set up a business UK banks will offer certain advice and will probably try to lock you into a business bank account of some kind.
It’s worth checking that this is best for you – British business banking accounts often charge quite high fees for basic actions like paying in money, and you don’t always even get great in-branch service for the privilege.
At Arro we believe that your business account should be there to help you boost your own profits, not those of the major high street banks, which is why the Arro Business Account has a totally transparent fees list, including several common money management tasks you can do for free.
With guaranteed approval (subject to Fair Fit criteria and eligibility) your nationality is not an issue – you will be treated the same as a UK business accountholder would be, and we usually don’t need any extra forms of ID in order to process your application.
Registering for tax
You should register with HM Revenue & Customs, the UK’s tax collections office, to make sure that you are paying the right amounts of tax at the right times of year – it’s a good idea to get an accountant who deals with international business owners too, as they should be able to advise you on any tax-related issues.
The process is slightly different depending on whether you register a company name or not. If you register as a limited company or similar legal entity to carry out business in the UK, then you should register with HMRC to pay corporation tax.
If you are trading as a self-employed individual or ‘sole trader’ then you should register with HMRC for self-assessment. Your accountant can still help you with your tax returns, but the rules about what you pay are slightly different than if you are registered as a company.
Get an Arro Business Account
If you decide that an Arro Business Account sounds like the best way to manage your money from your business activities, it’s easy to apply in just three minutes – all we need is your name, company name (if you have one), date of birth and UK trading address, along with basic contact details.
There’s no credit check, so your application will not appear on your personal credit file or leave any kind of mark on your company’s record, and we guarantee to approve all eligible applications.
You get a business account with sort code and account number, so people can pay you via money transfers from UK banks, and you also get a Business MasterCard® debit card issued in your name, which looks professional when making card payments from your company account.