11 November, 2022
Doing Business in the UK: Opportunities and Risks You May Face With
Registering a business in the UK has several advantages and risks for entrepreneurs. However, this can be a great opportunity to enter the domestic market and get a stable source of income. Today you will learn more about how to do business in the UK and what pros and cons this decision has.
How Is Doing Business in the UK Different from Other Countries?
The United Kingdom has a number of unique aspects for doing business that isn't typical for other countries. England stands out for its entrepreneur-friendly environment, high intellectual property standards, competitive tax rates, and consistent regulatory oversight. All these factors form a favourable atmosphere for start-up entrepreneurs. You can find more information about how to start an online business in the UK here.
Benefits and Opportunities of Doing Business in the UK
So, let’s start our guide and find out why you should do business in the UK and what benefits and opportunities it brings.
Access to four local regions and the European market
This feature opens our list of pros and cons of doing business in the UK. The UK is a huge marketplace with 5.6 million local businesses which can operate not only in the UK but also in European countries. Thanks to a loyal legal system and grant programs, you can quickly take a stable position in your business niche.
Location in one of the world's financial and investment centres
Being an attractive investment destination, the UK occupies one of the leading positions in terms of business conditions, human capital, and living standards. Also, it is one of the largest financial centres. Therefore, the viability of your business will be supported not only by the high solvency of the local target audience but also by the interest of potential investors.
Ease of doing business
The UK has one of the highest ease of doing business scores of any country in the world. This is due to the loyalty of taxation for start-up entrepreneurs and civil legislation. In addition, restrictions on starting a new business are relatively low compared to other developed countries in both the East and the West. Learn more about registering a new company in the UK here.
Opportunity to hire local highly qualified specialists
The UK is famous for its large number of specialists, which is another key reason to start to trade here. To be precise, over 30 million people work in the UK, and the growth in labour supply will not stop in the next 15 years.
In addition to this, the UK labour law is more flexible than in many other European countries and is aimed at protecting employees. If you are an employer, then it will indeed be much easier for you to follow pre-set rules and regulations that will significantly improve the lives of your subordinates.
Risks and Challenges of Doing Business in the UK
In this paragraph, we'll discuss the main risks and challenges of doing business in the UK.
As for the disadvantages of doing business in the UK, the main one is Brexit. The impact of Brexit on doing business has not yet been fully assessed. This is primarily due to the COVID-19 pandemic because it is somewhat difficult to determine exactly how Brexit alone has changed the business sector in the United Kingdom.
Now the UK needs to find the right balance. That is, update the laws to make it more attractive to do business in the UK while at the same time not going too far with its current biggest trading partner, the EU.
Problems with registering a business
Although it takes 48 hours to register a company in the UK, all paperwork takes a total of 18 days, most of which is spent communicating with HMRC (Her Majesty's Revenue and Customs) and registering for withholding PAYE (Pay-as-You-Earn). To get more information about starting a business in the UK as a foreigner, read this article.
Known for its international mobility and highly skilled workforce, the UK is a lucrative source of talent for the retail and hospitality industries in Europe.
However, since the Brexit vote, the number of Europeans applying for retail and hospitality jobs in the UK has dropped significantly, and answers to questions from high-skilled workers about their future eligibility after the UK has left the EU have become limited.
Getting a building permit
Construction in the UK is relatively fast: it takes no more than 100 days and requires only 9 procedures. However, it takes the longest time to obtain planning permission from the relevant authorities, as well as connection to water and sewerage, which are the most expensive procedures. To avoid this issue, read our article and find out how to get a virtual business address. Also, you can learn the main advantages of a virtual office here.
Obtaining a permit for public services
UK Power Networks handle the connection to the network, and this process will take up to 50 days for new properties. It includes submitting drawings, getting inspections, and waiting for outside connection work. As for the main risks of doing business in the UK, choosing a power company with the best tariff plan may not be easy.
Lending and investors
While investors are well protected in the UK thanks to strong contracts and a stable financial environment, it is always important to be sure and carry out due diligence when entering the domestic market.
Because of the fragmentation of the country's legal system, the UK tax system has a considerably complex structure. It takes about 110 hours a year to meet all required tax obligations, including corporate tax, labour, environment, and consumption taxes. Support from local tax authorities is needed to alleviate this burden.
The legitimacy of contracts and insolvency
Enforcement of contracts and resolution of insolvency are relatively simple processes due to the developed legal system in the UK. On average, it takes about 440 days to enforce a contract and one year to resolve a bankruptcy, which is less than the OECD average.
The British can seem reserved and aloof at first, and it can take a while to get the specific elements of business etiquette. The specifics of this culture can make decision-making relatively slow, even for entrepreneurs with a good sense of business.
Several Tips on How to Do Business in the UK
Let’s check some tips on doing international business in the UK.
Refine your idea
Test your business idea in various scenarios and work hard to make your product stand out from the crowd. Also, to attract your target audience, you will have to think about what your unique selling proposition will be.
Conduct market research
Another important step for running a business is to study your competitors. The market is oversaturated, so you need to understand how to position yourself correctly. You may not achieve the desired result if you do not know the advantages and features of competitors.
Create a business plan
A business plan is a basis for the further growth of your business. It is a document with all the necessary information about the current activities and resources of your company. Also, it should include a comprehensive description of the products and services you offer.
Choose a suitable business model
When choosing a business model, consider the retention of assets and the impact on day-to-day operations. You may need to involve multiple stakeholders to ensure your business is as efficient and profitable as possible.
Find the best promotion method
There are two types of promotion these days: digital and offline. The first option includes SEO, SMM, advertising on third-party websites, etc. As for the second option, you can use banners and flyers, organise events, and order ads from partners. For the best efficiency, it makes sense to use all these techniques.
How The Hoxton Mix Can Help?
If you want to buy an address for business in a privileged location in London, check the Hoxton Mix services. Usually, to get a prime business address takes ten minutes only and costs from £0.41 per day! It is unlikely that you will find something more affordable than what Hoxton Mix offers!
With a London business address, you will get credibility among your clients and competitors and won’t face financial outlays as well as unnecessary bureaucracy. Contact us and start your business in the UK right now.
Also, learn more about what is a virtual office on our site.
To sum up, let’s answer the most frequently asked questions related to doing business virtually in the UK.
Is the UK good for doing business?
The answer is yes. The UK is the world's trading and economic centre. It is the fifth-largest economy in the world, one of the best investment destinations, and one of the most attractive corporate homes in Europe.
What is the biggest challenge while doing business in the UK?
Despite the obvious advantages, if you start doing business in the United Kingdom, you will have to tackle complications such as the consequences of Brexit, the complex tax system, specific customs, disparate laws, and some bureaucratic procedures.
What are the main benefits of doing business in the UK in 2022?
If we talk about the benefits of doing business in the UK in 2022, let’s remember that the United Kingdom has reliable legal protection, an independent judicial system, flexible taxation, as well as high confidence from foreign partners.
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