Doing Business in the UK: Are You Ready to Expand to the Fintech Capital of the World?

In order to remain the fintech capital of the world, London (and the UK in general) has been actively wooing American businesses-especially technology companies-by launching an SXSW campaign that included a four-day event with presentations by major UK tech companies.

The UK has become an attractive option for American companies looking to expand into Europe, and while the United States and the UK speak the same language (at least in principle), there's a world of difference in how businesses operate.

Here are the resources to help you answer three common questions about doing business in the UK.

1. What is the UK business climate?

As an international business owner, it's important to understand the business climate of any new country. A good starting point is the U.S. government's commercial guide to doing business in the UK. In it, international trade experts have come together to create a comprehensive overview of the UK's political climate, trade regulations, financing, and current business opportunities.

According to the British government, more companies locate their European business headquarters in the UK than in anywhere else in Europe. So it's no surprise that gov.uk has multiple resources to support businesses. In particular, there is a list of articles covering different aspects of business (all labeled either “guidance” or “promotional”) as well as investor case studies and investment reports.

Reading both sets of resources will give you a good indication of the opportunities available in your niche.

2. How can I set up a company in the UK?

When you're used to the business structures in the United States, those in the UK can seem very foreign, but you'll need to navigate them to get your business started. British companies have to register via Companies House. This is where you'll find out if your chosen business name is available and where you will complete all the business formalities. The registration fee ranges between £15 and £100 depending on whether you are registering online, in person, or whether you need a rush registration.

Another important part of setting up your company is registering for Value Added Tax (VAT). If you are selling digital downloads to the UK, you should already have registered. If not, be aware that if the value of goods you supply to the UK is more than £82,500, then you must register. The percentages for VAT are quite steep in the UK-as much as 20 percent. (See an online VAT calculator.)

If you're going to employ people in your business, then you will need to handle tax and National Insurance contributions for employees via the PAYE scheme. There are step-by-step instructions on how to set up a UK company here.

If the thought of this makes your head spin, there's another option: Use a company formation agent to set up your business, file your paperwork, open your business bank account, and even set up a local website. Not only will this save you a lot of time and mental energy, but you will know you are in compliance with local regulations.

3. What resources support UK businesses?

One good thing about doing business in the UK is there is a lot of helpful information available online to help you get oriented quickly. Much of it is aimed at local small and medium-sized business owners, but it's still useful for foreign business owners.

A good starting point, especially for small business owners, is the National Federation of Self-Employed & Small Businesses Ltd. This lobbying group aims to represent the interests of small business owners and to help its members with business services and advice. The group's website is pretty comprehensive and well worth browsing.

The UK government also provides the Business is GREAT Britain website, which caters to businesses at all stages of development. Whether you are a new startup, planning for growth, or ready to accelerate into the big time, there are resources and practical advice to help you succeed.

Thinking About Culture

One question business owners looking to move to the UK should also consider is the British culture, as there are many ways in which it differs from the culture in the United States. Norms for working hours, holiday allocations, and paid time off are completely different, and there are also differences in the general working culture, as this video points out:

For this reason, it's a good idea to study the business and general culture to avoid misunderstandings that could affect your business.

Branding Considerations

When you expand into another country, decide whether you are going to maintain a consistent brand across all countries, or choose to use different colors, fonts, or logos on company business cards, stationery, pens, and promotional items.

Even if you will be using your same logos, you will want to order new items for the new address. Save money by ordering everything with the same logo at once as there is typically a setup fee.

Think beyond just business cards and stationery to items your employees might have on their desks and promotional items that will keep your brand top-of-mind with your new clients. Also consider unusual items that could get your brand noticed and remembered.

Online Content and Forms

Decide whether you will launch a separate UK site on a UK-based server (for optimum SEO), if you'll have a UK version of your pages on your existing site, or if you will simply stick with your U.S. site. In all cases, fields will need to be created to accept the differences in U.S. and UK addresses, phone numbers, and currencies.

There may also be legal requirements for additional fields. For example, Due.com points out in Managing Your Startup: New Rules for Payments that different banking and tax fields may be required, specifically, “In the UK, you'll need to include the SORT code.”

There may also be different payment methods. And pay particular attention to testing field lengths in payment sections, or make sure the merchant processor you use is accustomed to operating internationally or at least also in the UK.

Use British Spelling and Word Choice

If you decide to create a separate site or at least separate pages, note that not only are there many British words that are spelled differently (far more than most Americans realize) there are also many words that are totally different. It is best to have a native British writer develop the content or at least edit it.

Did you know that you can now legally use online signatures on legal forms in both the United States and the UK? There are different laws and regulations including ESIGN, UETA, and the Electronic Communications Act, which are explained here. As your clients become more familiar with electronic transactions, using online signatures can speed up closings.

For best results, all of your landing pages, forms, contracts, and every other document should be branded and use British spelling and wording. Fortunately for Americans, most people in the UK and throughout Western Europe are more familiar with American spellings than we are with theirs … and more forgiving. (Americans online often complain that people in other countries spell words “wrong” when the words are actually spelled correctly for those countries.)

Doing Business in the UK: Separate Businesses or One?

When considering expanding into another country, be sure to consult an accountant and legal counsel. (Look for a specialized business “solicitor” in the UK rather than an attorney or lawyer.)

Whether you choose to run one company in both countries or to operate as separate legal entities is only one of the many decisions you will need to make in advance. The more research and planning, the better your chance of success.

The post Doing Business in the UK: Are You Ready to Expand to the Fintech Capital of the World? appeared first on AllBusiness.com

The post Doing Business in the UK: Are You Ready to Expand to the Fintech Capital of the World? appeared first on AllBusiness.com.