Doing business in the UK

The UK has an illustrious history of international trade and has traditionally welcomed more foreign investors than most other jurisdictions in Europe. Despite economic and constitutional change, a diverse range of overseas companies and entrepreneurs continue to identify the country as an attractive place to conduct their business operations.

Key factors influencing their choice to do business in the UK are its strength in innovation, research and development, its close links to many other markets, its time zone and the fact that English remains the most popular language for international trade. The UK has consistently performed well in a number of different global business environment rankings, including the quarterly reports by the Economist Intelligence Unit assessing the best locations for ease of doing business. At the start of 2023, it was named as the third-most important country for business growth in a PricewaterhouseCoopers survey published to mark the start of the World Economic Forum in Davos.

While the impact of the decision to leave the EU on foreign investment is the subject of much ongoing analysis, the Government has repeatedly emphasised that the UK remains very much ‘open for business’, with the country still scoring highly in terms of its flexible trading environment, competitive tax rates, breadth of public services and robust legal framework. By geography, while the US remains the largest foreign investor in the UK, with notable levels of M&A activity by some US acquirers in particular, there are also significant levels of investment from Asia and Europe.

London’s ability to uphold its position as a global hub following the EU referendum was underlined by being named ‘Europe’s best performing city’ by influential US think tank The Milken Institute in its inaugural index of European cities. Two years after Brexit in 2022, figures published by the City of London Corporation show that in addition to retaining its status as a top financial centre and outperforming the overall business offering of other global destinations such as New York, Singapore, Hong Kong and Frankfurt, London continues to be a leading destination for international tech investors. It is currently home to the highest number of European unicorn companies, privately-held or recently floated firms with a valuation of over $1 billion.

At Penningtons Manches Cooper, we have specialists in a broad range of areas likely to be of interest to an incoming business. Our lawyers offer practical guidance on matters such as structuring a UK entity or subsidiary, carrying out acquisitions of businesses and commercial property, commercial contracts, data protection and intellectual property rights. We also deal with immigration, employment law matters, trading regulations, tax planning and wealth management together with sustainability and ethical concerns. As enterprises evolve and develop, so too does our support through a dedicated, multi-disciplinary service tailored to specific needs.

Our Doing business in the UK guide - which can be downloaded here or by using the link in the right hand column - provides a general overview of the key legal, commercial and practical issues which need to be considered by companies when entering the UK market to establish a new business venture: 

• Setting up a corporate structure
  A number of different types of entities can be set up, depending on the overseas company’s goals. The three most common are a limited company/subsidiary, a branch, and a limited liability partnership.

• UK tax regime
  Whatever corporate structure has been selected, the company, branch or LLP must register with Her Majesty’s Revenue & Customs to pay all its tax liabilities.

• Intellectual property rights
  The UK offers a well-developed regime for the protection and monetisation of intellectual property rights. Many aspects will be familiar to businesses operating internationally.

• Data protection
  The collection and use of personal data is governed by an adapted version of the EU General Data Protection Regulation (GDPR) and the Data Protection Act 2018. The UK GDPR broadly mirrors its EU equivalent but has been revised post-Brexit.

• Visas and immigration
  Immigration options should be assessed early to avoid any surprises or issues later on. These could include a business being fined for employing individuals who do not have the appropriate visa.

• Employment law
  In comparison with other European countries, the UK has less labour regulation and a more flexible labour market, which make it an ideal location for both businesses and talented individuals to thrive.  

• Trading and regulation
  Some industries are heavily regulated including, notably, the financial services sector. When establishing a presence in the UK, it is important to obtain all the requisite licences to trade.

• Property
  There are four main models of office space available, depending on the needs of the business. The property rights that a company acquires will be determined by the model of office space adopted.

• Pensions
  The UK pensions landscape is complex and constantly shifting. Current-service pension provision most commonly involves a 'money purchase'/'defined contribution' arrangement whereby both employer and employee make contributions.

• ESG
  The UK Government has set out ambitious targets on environmental, social and corporate governance (ESG), including a roadmap for green and sustainable investment. Organisations that fail to keep up with change face a mounting business risk.

For further information on establishing a presence in the UK or for more detailed guidance on any of the points raised in the brochure, please contact Matt Martin.