Updated February 2019
The UK has, in the past, been an attractive place to start a business if you're a foreign national. A series of changes in the last half decade may have made this more difficult, but with a good idea and a well-executed plan, there's still plenty of room for optimism.
The introduction of a points-based immigration system made it harder for foreign nationals to get the visa required in order to start a business in the UK. But the largest looming question is, of course, Brexit.
To start a business in the UK as a foreign national, you need to consider the following steps:
As the situation currently stands, EU citizens do not need special permission to start a business in the UK. The right of EEA nationals to live and work in other EEA member states is enshrined in the agreements to which all of the members have signed up.
At this point, the only exception to this involves nationals of countries that acceded to the European Union in 2004 – Bulgaria and Romania. If you are a Bulgarian or Romanian national, you may have to apply for permission unless you qualify for an exemption.
Advice on exemptions, as well as guidance for applications, can be found on the UK Border Agency website.
But with the UK due to leave the EU on 29 March 2019, and with no agreement on what the future relationship will look like yet, it may be best to keep an eye on announcements as they develop.
Prospective entrepreneurs tend to receive favourable treatment from the immigration authorities. The points-based system is divided into 'tiers', with Tier 1 dedicated to "highly skilled workers, investors and entrepreneurs". The UK Border Agency understands this to mean those who are "setting up or taking over, and being actively involved in the running of one or more businesses in the United Kingdom."
The eligibility criteria for a Tier 1 (Entrepreneur) visa are strict. In particular, you must have access to at least £50,000 in investment capital, or have already invested at least £50,000 in a UK business within the 12 months before you apply. If you've not already invested, the money must come from:
Alternatively, you can also apply for a Tier 1 (Entrepreneur) visa if you have access to £200,000 in investment funds and the money is either:
In addition, you will be required to fulfil the criteria that apply to general Tier 1 applications. This means you will need to demonstrate that you are either from a majority English-speaking country, or that you have successfully taken a recognised and accredited English language qualification.
If you are applying for an extension to an existing Tier 1 Entrepreneur permit, you must be eligible, and you will be required to fulfil further criteria. You must have invested at least £200,000 in a UK business, excluding any commercial property or director's loan, or £50,000 if your initial application was based on having funds from an approved funding source.
Gov.uk say that you can apply to extend your visa if you registered as a director or as self-employed no more than six months after you were given permission to stay in the UK under the original visa. You should prove you’ve been self-employed, a member of a partnership or working as a director of a business three months before you apply. Plus, you should have created at least two full-time jobs that have existed for at least 12 months.
Read our guide on how to set up as self-employed with HMRC for more information.
As may be expected, there are wide-ranging regulations on the behaviour of foreign nationals who wish to start a business in the UK. The fundamental point to remember is that you will need permission to work in the UK in order to start a business here, in exactly the same way that you would require a permit to be a builder or work in an office.
However, the restrictions in place make it very difficult for entrepreneurs to set up shoe-string companies upon arriving in Britain.
It is important to remember that immigration laws are strictly enforced, and it is vital that you comply with them otherwise you may find yourself in trouble. As such, you may wish to take specialist, independent legal advice in advance of any action.
Got any further questions? Ask us in the comments section below.
11 September 2014 • 4-minute read
Online accounting software providers' FreeAgent provide the lowdown on all the different legal structures, starting a new series of…
29 December 2017 • 5-minute read
Writing a business plan is one of the most important steps in the life of a new business owner. The business plan is a key document that…
6th Floor99 Gresham StreetLondonEC2V 7NG
Sol House29 St Katherine's StreetNorthamptonNN1 2QZ
© Copyright 2020 Simply Business. All Rights Reserved. Simply Business is a trading name of Xbridge Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Registration No: 313348). Xbridge Limited (No: 3967717) has its registered office at 6th Floor, 99 Gresham Street, London, EC2V 7NG.