Learn How To Start A Business In The UK

Starting a business in another country is no longer a great mystery in this century. Knowledge about this process has encouraged more and more people to invest in a business abroad. If you are also interested in this subject, in this article, you will see how to start a business in the United Kingdom.

Learn How To Start A Business In The UK

The United Kingdom is among the countries that other less developed countries are most interested in moving to and starting a new life. Investing in a new business can be one way to do this. Keep reading and find out what you need to open a company in the UK.

Types of companies that foreigners can open in the UK

There are some types of companies that can be opened in the United Kingdom by foreigners, which differ from the options for natives of the country.

Sole trader

The individual trader acts alone, so he receives all the profit from the business but has to pay his income tax and social security. This type of entrepreneur is responsible for all business debts of the company. 

This category also includes freelancers registered as self-employed and who pay certain taxes and social security fees.

General Partnership

Companies created in this model rely on two or more individuals – or companies, acting together. That is, responsibilities and gains are shared equally. However, each member pays tax on their earnings.

It is a type of structure more suitable for small companies.

Limited partnership

Similar to general partnerships in some respects, a limited partnership has a general partner who is responsible for the business. In addition, it has a limited partner, who contributes financially and is only responsible for his contribution.

Limited Liability Partnership (LLP)

In this case, the partners are not responsible for the company’s debts. To start a partnership like this, you need to write and register an LLP agreement with Companies House, the body responsible for registering companies in the UK.

Limited Private Company (Ltd)

This type of company is a legal entity with no relationship to its directors. These are corporations incorporated by registration at Companies House, but which require at least one director and one shareholder. Shares of Private Limited Companies cannot be publicly traded.

Public Limited Company (PLC)

A corporation is different from a limited liability company in that its shares can be publicly traded. To start this type of business, you need to have a minimum share capital of £50,000, with at least 25% paid before starting the business.

Unlimited company

Unlimited companies are not a very common model in the UK. In this type of company, shareholders have joint and unlimited liability for business debts. This means that they can be covered with personal assets in case the business assets do not meet the business debts. 

Offshore company

Offshore companies are registered, established or incorporated outside the country of residence. These are organizations operating in popular offshore financial centers and tax havens. This type of company can offer several benefits to companies and their directors. However, you need to know its rules well before defining how your configuration will be.

How can a Foreigner open a company in the UK?

Any foreigner with a European passport can open a company in the United Kingdom. In these cases, it is necessary to have the document that proves the right to stay in the country, the indefinite leave or remain or permanent residence authorization document.

For those without the right to remain legally, who only have their country passport, it is necessary to apply for a specific visa and invest a sum of money, the minimum is £50,000.

Visa for entrepreneurs

The British government encourages investors and entrepreneurs to enter the country. One of the ways to encourage this participation is by creating specific visas for these profiles. The T1 visa is indicated for foreigners who want to undertake.


It is suitable for entrepreneurs, who must invest at least £50,000 in investment funds. This profile needs to pay a fee of £1,277 for the applicant and the same amount for each of their dependents. 

Entrepreneurs must also pay a health surcharge, according to the age of each person, the place where they will live and the number of dependents. 

With this visa, the entrepreneur can stay three years and four months in the United Kingdom and has the right to extend his stay for another two years. After that period, it is possible to apply for permanent residence. Family members can also move to the country.

Newly Graduated Entrepreneurs

In the case of newly formed entrepreneurs, it is necessary to have the endorsement of the Department for International Trade (DIT) or a British higher education institution. Applicant pays a fee of £363 and the age-appropriate health surcharge. 

This visa is valid for one year and may be extended for another year. However, this entrepreneur cannot apply for a permanent residence visa.


This modality is intended for those who wish to invest from £2 million in British government bonds, share capital or loans in companies registered and active in the United Kingdom. 

Those with more than £10 million to invest can apply for a permanent visa and those with more than £5 million can apply for a three-year visa. The process can take around three months. The cost of this visa is £1,623 and the health surcharge must be paid.

What does it take to set up a company in the UK?

To open a company in the UK, you need to meet certain requirements:

  • Be over 18 years old;
  • Minimum capital of £1 for limited company;
  • Open a bank account and have at least £100. For limited liability companies, the minimum share capital is £50,000;
  • Have at least one director, one partner and the position of secretary; 
  • For the SA company, a minimum of three shareholder partners;
  • Take out special insurance, the employer’s liability insurance, of at least £5 million from an authorized insurer.

Step by step to open a company in the UK

Step 1: Check your legal status in the country

Confirm that you have the necessary visa and permission to start a business. Citizens who do not belong to the European Union or European Free Trade Association (EFTA) need to have a visa and residence permit.

Step 2: Write the company’s business plan

Every entrepreneur in the UK needs a business plan. This document defines what the entrepreneur’s business ideas are and what are the probabilities of success and sustainability. To create one, research the market and forecast your budget. The UK government website has a business plan and cash flow forecast templates available for download.

Step 3: Define the best business structure for your company

Choose the right company type to frame your new business. Consider the structure of your company, the type of activity, taxes and permits that need to be issued.

Step 4: Define the company name and address

Choose a name for your business and define the business address for the business. The sole proprietorship may use his own name on the business. The address is mandatory for registering the company for tax purposes and for registering the company.

Name registration is mandatory only for limited companies. Other types of companies can register as a trademark to prevent other companies from using the same name.

Step 5: Register your company

Look for HMRC in the UK to register your business for tax purposes. Limited partnerships need to register with Companies House.

Step 6: Find out about any additional rules

In the United Kingdom, starting a business may have additional requirements, such as licenses or permits, insurance and rules to be followed. 

How much does it cost to start a company in the UK?

Starting a company in the UK costs between £12 and £100. The amount depends on the business model and type of company. The simplest and cheapest process is to register a limited company on the Companies House website, for £12 or £40 by post.

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In addition, you need to consider the taxes that need to be paid after the business is open:

  • Income tax: it’s like income tax on business profit;
  • Corporation Tax;
  • VAT: for companies with revenue in excess of £85,000 calculated at the end of each tax year;
  • National Insurance Number: calculated according to the tax return form;
  • Income Tax and National Insurance Number for each hired employee.

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