The UK is one of the best places for anyone to start a business. Political stability, a strong economy, security, laws that encourage start-ups and government support are among the positive factors. Immigrant entrepreneurs have had success in sectors including tech, hospitality, healthcare, retail, and creative industries.
Migration has brought fresh ideas and different ways of doing business to the UK. And the country’s entrepreneurial attitude means it’s very possible for foreign nationals to explore opportunities and start their own businesses. Here’s Remitly’s guide to starting a business in the UK as an immigrant.
How to start a business in the UK as an immigrant
As is the case with any start-up, you’ll need to commit to research and planning. The process you go through to set up a business in the UK depends on the visa you have or are planning to apply for.
The process is a bit more complicated for immigrants—even for EU citizens—since the UK left the European Union. But it’s still very achievable, as the statistics show. Here are the main steps you’ll need to go through when setting up a business:
1. Do your research
Like anywhere else in the world, there are things you may not anticipate when setting up a business. So consider visiting the UK to get first-hand experience of how businesses are set up and run. Learn about your potential competitors and how people in the UK respond to new products or services.
Also take note of possible suppliers, prices, and possible business partners. Consider the wider business environment too; the availability of staff, any skills shortages, and the infrastructure to support your business.
2. Create a business plan
Creating a robust business plan outlining how you’re going to go about setting up the business will make it easier for you to make representations when applying for a loan or visa. It will also allow you to make a realistic assessment of your strengths and weaknesses.
3. Decide on your legal business structure
There are different business structures in the UK so you’ll need to pick one that suits your start-up. Talking to a specialist in the UK can be a good way for you to determine the best model to utilise. Some of the options are:
- Sole Trader
- Limited Company
- Partnership
- Limited Liability Partnership
4. Get a sponsor license
If you are taking the self-sponsorship route, you’ll need to submit an application that’s relevant to it. You must also set up things like HR systems and processes that comply with the UK laws for self-sponsorship.
This also requires you to hire a UK-based, “senior and competent person” as the Authorising Officer. The individual will be responsible for handling your sponsorship process.
5. Get endorsement
If you’re thinking of becoming an immigrant entrepreneur, you’ll need to apply for an endorsement. Both the Innovator Founder visa and Global Talent visa require endorsements—there’s more on those options later.
The relevant endorsing body will go through your application and determine if your business idea is unique and can therefore add value to the UK. The Global Talent visa is a possible route for individuals who demonstrate they’re leaders, or have the potential to become leaders, in their field.
6. Move to the UK
If you’ve completed the legal requirements to immigrate and you’re ready to go, we’ve got some advice on some of the things to think about before making the move to the UK.
UK business visas for immigrants
While there’s no British business visa that leads directly to citizenship, there are certain types that are more specifically relevant for a foreigner thinking of starting a business in the country.
Indefinite Leave to Remain
If you have the Indefinite Leave to Remain immigration status, you’re free to set up any business you like. You may also be eligible for some public funding.
Getting this status means you’ve already fulfilled all the requirements to apply to become a UK citizen. Citizens Advice is a great place for some free guidance on immigration and other issues in the UK.
Innovator Founder Visa
You can apply for this visa once you show that your business idea is innovative and viable. You’ll also need to show that the business is scalable. To qualify for an Innovator Founder visa, you need to be at least 18 years of age and prove that you have enough funds to set up the business. You’ll also need to prove you can speak, read and write in English.
Once an endorsement body approves your business idea, you’ll have the right to live in the UK for three years. After that, you can apply for the Indefinite Leave to Remain status.
Global Talent Visa
Individuals seeking to immigrate to the UK and set up a business through this route must first prove that they’re leaders or have the potential to be leaders in their field. Some of the relevant fields include arts, culture, digital technology, academia, and research.
Individuals who secure the Global Talent visa qualify to apply for Indefinite Leave to Remain after three to five years, depending on the endorsing body.
Some of the endorsing bodies include the British Academy, the Royal Academy of Engineering, the Royal Society, Tech Nation, Arts Council England and UK Research and Innovation.
Skilled Worker Visa
The Skilled Worker visa is an option to consider if you’re already working for a UK-based company and have dreams of setting up a business in the UK later. This allows you to stay for five years providing you speak, write and read English and fit one or more of these criteria:
- You work for a UK employer that’s been approved by the Home Office
- You have a “Certificate of Sponsorship” from your employer with information about the role you’ve been offered in the UK.
- You do a job that’s on the list of eligible occupations.
- You’re paid at least a certain amount. How much depends on the type of work you do and the date you got your CoS.
After five years, you can apply for Indefinite Leave to Remain—then you’re free to do any job you like, change employers or set up your own start-up. So this is very much for long-term thinkers.
Of all of these, the self-sponsorship route is perhaps the most complex, and badly named, because you can’t really sponsor yourself. So consider seeking the help of a professional immigration solicitor—they can provide support in terms of advice and practical steps to take.
Legal guidance and compliance
While the UK has a straightforward legal regulatory framework for businesses, it’s always a good idea to seek professional guidance from a business lawyer in the country.
Here are some of the things to keep in mind when planning to start a business in the UK.
Specify your business structure
There are different types of business structures in the UK. Pick the one that most suits your business in terms of taxation, liability concerns, and profitability.
Registering a business
The business structure you choose influences where you have to register. If you have a limited company, you’ll need to register with Companies House.
As a sole trader, you’ll need to notify HM Revenue & Customs. It’s also essential to open a UK bank account and provide a UK address for correspondence.
Tax compliance
All businesses in the United Kingdom must pay taxes. Limited companies pay Corporation Tax while sole traders are required to pay Income Tax. In certain circumstances, businesses can also be required to pay Value-Added Tax.
You will need to learn about filing annual accounts and returns as quickly as possible. This can be a complex process which is why professional help is highly recommended.
Employment laws
If your business will have employees, you’ll need to familiarise yourself with UK employment laws. This includes acceptable salary ranges, employment contracts, and workers’ rights. You may also have to comply with National Insurance Contributions requirements.
Business licenses and permits
The UK has a strong regulatory system, and in some industries you’ll need the relevant licenses or permits to operate your business in the country.
Financial support for immigrants in the UK
The UK encourages entrepreneurship, so you’ll have a number of options to secure funding. Grants, loans and investments are among the things you can go for.
Government grants and funding
The UK government provides several funding opportunities for immigrants depending on their status and sector. Here are a few examples,
- Innovate UK – If your work is innovative, consider submitting an application to one of the funds available through this government body. You can use the funds to commercialise, develop products, or conduct research.
- Start-Up Loan for Business – This is a government-supported programme that provides loans to entrepreneurs in the country including immigrants. The programme also includes mentorship.
- Local Enterprise Partnerships – Local authorities often have initiatives in place to support promising start-ups. Check your local authority’s website to find out if there are any programmes that are currently accepting applications.
Angel investors and venture capital
If your business has great potential or you’re already doing well, chances are that angel investors and venture capital firms might be interested. These firms will require you to sell them part of the business or become partners, so it’s a big decision to accept this type of investment.
Crowdfunding
In recent years crowdfunding has become a popular way for founders to raise capital for their start-ups. All you have to do is pitch your idea to the public and let people support you through fundraising. Some of the most popular sites for crowdfunding include Indiegogo, Kickstarter and Crowdcube.
Private grants and competitions
Different organisations and individuals offer grants to people who can prove they have an innovative idea. There are also start-up competitions that provide chances to win financing for your business.
Business resources and support for immigrants
Some financial institutions offer specialised services for immigrant entrepreneurs. Banking institutions are among the best places to go when you need advice with regard to your start-up. They offer professional advice to help you navigate the business environment in the country.
Accounting and tax services can also come in handy as you set up your business. These services help you comply with the law and some will complete the filing processes for you.
There are also plenty of options when it comes to business software, such as Xero or Quickbooks, which can be helpful when it comes to reporting and filing taxes. Good luck with your start-up.
FAQs
Can I start a business in the UK as an immigrant?
Yes. The United Kingdom is one of the most progressive countries and allows immigrants with the right documentation to start and run businesses.
What visa should I have to start a business in the UK?
Different types of visas allow you to start and run a business in the UK including the Innovator Founder visa, Global Talent visa and Skilled Worker visa.
Do I need a UK address to start a business?
Yes, you need a UK address to run a business in the country. The address is required for official correspondence with regards to things like taxes and legal notices.
Can I apply for business funding as an immigrant?
Yes, there are several funding programmes for immigrant entrepreneurs in the UK. Government-backed programmes, angel investors and crowdfunding are among the options available for immigrants to get business financing.
