Foreign direct investment is one of the most predominant investments in UK which has not only strengthened the countries economy but low tax rates have made the country strong amongst other leading countries. Department for International Trade in their report stated that volume of foreign investment in UK has increased to an extent and has grown by 2 per cent itself.

FACTS

Official Name: United Kingdom of Great Britain and Northern Ireland

Capital: London

Population: 63,742,977

Official Language: English

Money: Pound Sterling

Area: 242,514 Square Kilometres

Major River: Thames

According to UN figures, (2016) U.K. ranked second next to U.S.A in being a popular destination for foreign investment.However, when we talk about UK; it has a long tradition of trading; be it in the Mercantilism era of 18th century, Free trade in 19th century, or during the great depression of 1929-1939. Needless to mention, London is one of the prime hubs of world business.

Stable business environment and efficient business infrastructures are few core elements which motivates foreign investors in UK to set up their ventures in UK with company registration. Almost each and every leading multinational company has its headquarters/regional offices in UK. In the year 2014, UK economy grew by 2.6%, which is fastest since its slowdown in the year 2007-08.

Please connect with us, as we can guide you regarding how to set up a company with foreign investment in UK. We help leading foreign firms in getting the best out of their future investments.We guide candidates regarding planning an investment, with recruitments, with Investor Visas and migration, and with selection of Property.

• According to World Bank records, UK is world’s sixth most business friendly county (in the year 2017) for doing business.UK is considered as the leading International hub for world business which greatly motivates investors looking for investment opportunities in UK.Despite Brexit, European markets on the other hand are strengthening UK economy.
• The UK is considered to be the leader of foreign investment in Europe.One of the major benefits of foreign investment in UK is the method and time it takes for company formation, which has helped UK earn sixth position in the world. Thirteen days are required to set up a venture in the United Kingdom, and low taxation makes the environment investor-friendly.
• Government has been very encouraging in promoting foreign businesses and investment opportunities for investors through its market friendly policies.Once foreign companies set up their base in UK, they are treated exactly like British firms.The British Government strongly protects the rights of British registered companies, irrespective of their nationality.
• London being the financial capital of Europe offers excellent opportunities to foreign investors for incorporating a company in UK. Excellent infrastructure makes it easy to conduct business.The Department of International Trade actively endorses foreign investment in UK, and prepares market information for a variety of industries.
• UK offers extensive and profitable business opportunities to investors. UK markets are quite flexible which helps foreign investors in locating their clients from other European countries and makes the UK market quite competitive.
• High standard of living,proper health care facilities,good quality education are also some of the major elements which motivates an investor to consider UK as destination for international investment. Moreover Stable economy and currency makes it easier to do business in the country.
• The English legal system is considered to be very cost-effective, and transparent.Moreover setting up a company can be done with minimum investments and with low cost. Companies can obtain capital through debt financing, and off-market equity investment etc.
• Low cost of labour and high investment returns makes UK undoubtedly an attractive destination amongst foreign investors for investment. UK provides highly skilled professional from across the globe and has a strong market for talented people.Some of the top universities in the world like University College London, King’s College London, University of Edinburgh, University of Manchester, and London School of Economics are located in UK.
• UK is the center of global trading and financial services.In the  year 2016 Foreign direct investment in UK has reached a record high which greatly has motivated foreign investors to look for opportunities in the country.Organization for Economic Co-operation and Development in their report highlighted that in the year 2016, FDI jumped to $254 billion which has sharply increased from $33 billion in 2015.

Till 2008,UK was successful in maintaining its top position in terms of foreign investment. UK has the lowest corporate tax, which is around 28 percent, and is considered to be lowest across G7 countries, offering the best investment programme to foreign investors. Investment opportunities can be found in the following areas.

• Tenders, Projects and Public Procurement
• Government Procurement Service
• Tenders in the United Kingdom
• Dg Market, Tenders Worldwide
• And Many More ………………………..

The diverse economy, extensive broadband markets amongst G7 countries, ICT infrastructure, and lowest corporate tax greatly motivates and encourages foreign investors to explore and locate potential international business in UK. There are broadly two types of limited company where foreign firms investing in UK can register;
Private limited companies and public limited companies

• Foreign investors in UK can look for Private limited companies for global investment.Private limited companies are designated by the word ‘Limited’ or the letters ‘Ltd’ at the end of their name.
• Public limited companies are registered with the initials ‘plc’ at the end of their name.For international investment, companies are expected to get plc registration in order to be quoted in the UK stock market.Limited companies are incorporated under the Companies Act 2006.

Other types are: Sole traders and Partnership companies

UK usually has a stable regulatory environment which greatly helps in facilitating a healthy business environment, & greatly benefits foreign investors in doing business. For company formation in UK  one can choose the following options and get their company registered as a legal entity.

Representative Office

• A representative office is generally considered as a non-resident entity for tax purposes.
• Foreign investment in UK business, gives limited access to a foreign investor provided the company registration has been done as a representative office. Under HMRC rules, one can still employ UK sales staff, use UK banks, consult advisors and conduct market research.
• The main work for foreign owned businesses under representative office category will be to provide marketing and sales related support services to its British customers.
• A representative office type of arrangement is usually considered to be one of the most appropriate approaches, as it gives overseas companies the right to generate business within the United Kingdom.

Branch Office

Company registration as Branch office is considered as an extension of a foreign corporation, and the corporation is usually responsible for all activities. This works for companies, who are willing to operate a branch in UK ,but still are willing to continue with their business in the home country.

Subsidiary Office

A subsidiary company, also known as a UK private limited company, will have a separate legal entity, from their parent company though wholly owned by the parent company.Setting up a company in UK will make them liable to pay UK corporation tax on their profits and enjoy reduced rates on corporation tax which will greatly depend on the size of profits.

Company registration in the UK is comparatively easier than other European countries including Italy, Ireland, France and Germany which make it easier for foreign investors.

For Private Limited Company

Foreign national setting up business in UK .if registers with a Private Limited Company, have to appoint Directors and registration/company incorporation has to be done under Companies name.Director should be an employee of the company.

UK provides the best gateway to foreign investors for entering the European market, which has around 500 million population and 27 member states. Moreover UK is considered to be one of the most productive places for innovation which greatly benefits investors in setting up a company in UK.

• For Company incorporation foreign investors have to decide the name and address of the company
• For company registration, its mandatory for business entities to register with Companies House.There is a process for online application which usually takes 24 hrs for registration.Postal applications takes around 8-10 days.
• Registering a foreign business in UK ,means it should have a Company Address.Company address should be from the country where the company is registered,example a company registered in England must have a registered address in England
• For setting up a company ,Foreign business in the UK must have at least one director and a shareholder
• For company registration there should be set agreed rules for running the company
• Company information, should be provided that includes accounting requirements or the powers of directors or secretaries
• For company incorporation it’s important to highlight the constitution of the company.
• Incorporating a company requires Corporation Tax details

The UK has double taxation agreements through treaties with other countries. Most UK Companies pay a lower rate of Corporation Tax on foreign dividends to promote fast-growing, products.The UK offers attractive venture capital schemes and great tax incentives to leading companies investing in research and development in UK.

• The current rate of Corporation Tax levied is 20%.This till is considered to be one of the lowest amongst G20 countries.
• The Patent Box offers a 10% corporation tax on profits from inventions patented in the UK (compared to the usual 19% corporation tax).
• Leading Companies can get a 100% deduction of Corporation Tax on R D related work.
• Large companies can get a further deduction from their taxable income which is 30% of their current spending on qualifying R&D.

To know more about the investment opportunities in UK, please connect with us as we can guide you regarding  foreign direct investment. We can guide you regarding identifying opportunities and work understanding client requirements.We are committed to provide high quality service to our clients.