Six things for Indian businesses to consider before expanding to the UK

Blog | Corporate
Published: 4th July 2022
Area: Corporate & Commercial

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According to the UK’s Department for International Trade the proposed trade arrangement between India and the UK should be finalised by 2023, ahead of the general elections in both countries the following year. The arrangement said to be ‘worth billions’, will present huge opportunities for Indian businesses and could double trade between the two nations by 2030.

Sneha Nainwal, our head of our India desk, shares why now is the ideal time for Indian businesses to consider expanding to the UK, and what they need to consider before making the move.

1. Have a business plan

Although it is not a legal requirement, having a business plan could help secure additional investment in the future. By rationalising the decision to expand to the UK, and in turn highlighting the opportunities, a business plan presents investors with a clear picture of the potential rewards.

2. Think about your company structure

As Indian and English laws share many similarities, company structures available for new businesses in the UK will be familiar to Indian enterprises.

Private limited company (Ltd)

This is one of the most common corporate structures in the UK. Not only is it a low cost and speedy option (registering a limited company can cost just £12 and take as little as 24 hours), it’s also an attractive option for Indian entities looking to create UK affiliates, as the directors of the company do not have to live in the UK on a permanent basis.

However, limited company structures restrict a business to only seeking private investment to fund growth and development.

Public limited company (PLC)

A public limited company, in tandem with a listing on a stock exchange, may be more suitable businesses planning to expand (or larger, more established companies seeking to tap markets), as this structure allows access to a broader range of investment.

Limited liability partnerships (LLPs)

Other structures, such as limited liability partnerships, have the advantage of not being required to pay corporation tax.

3. Understand the UK’s corporate governance requirements

When expanding to the UK business need to be aware of UK corporate governance, including the form of a company’s articles of association (the rules and constitution governing a business). Certain business decisions must be made in accordance with these articles of association and evidence of some of the decisions will need to be filed publicly at Companies House, the UK registrar of companies. If not, a financial penalty may be issued.

There are two options for businesses looking to expand to the UK:

  • Model articles, which are provided under the Companies Act 2006. These are generally more suited to smaller companies: or

  • Tailored articles of association that are specific to their business. These would better suit larger companies or those with complex structures.

4. Consider the most suitable location

Location is key when it comes to setting up a business.

London and the Southeast are hotbeds for entrepreneurs, particularly those in the finance and fintech sector, with almost one third of start-ups in the UK based in the region. The Southeast also has easy access to the main UK airports and transport links, making it an attractive option for globally linked service industries, such as banking, finance, and legal services

However, property in the Southeast, and particularly London, can be very expensive. Therefore, businesses should carefully consider whether having a presence in these locations is essential, especially when setting up.

Although London remains a prestigious destination for global businesses, other UK cities also have plenty to offer.

The Midlands and the North of England have strong connections to the automotive and energy industries, with Birmingham, Manchester, Humberside and the Northeast excelling in sectors such as driverless cars and industrial hydrogen technologies. Businesses involved with new technology hubs in these regions are likely to have a clear advantage when working towards reaching net zero targets in the UK – mainly due to their proximity to a host of potential new partners, collaborators, and customers.

Real estate, warehouse costs (and general living expenses) are much cheaper outside of London and the Southeast. Therefore Indian companies may want to consider basing themselves in the Midlands and Northeast to take advantage of cheaper costs and established sector reputations. There are also good transport links (by rail, road, air and sea), which makes these regions a desirable option.

5. Assess immigration requirements for your workforce

Business owners will need to consider visa types and requirements for any workforce members that will be migrating from India to the UK. There are a range of immigration visas available, including:

  • Innovator

  • Start-up

  • Global Talent; and

  • Tier 1 Entrepreneur visas

Read more about all the options that are available to you and how we can help you navigate the UK immigration system.

6. Open up a UK bank account

Although businesses don’t need to have a UK bank account to conduct business in the UK, it can be more convenient to make and receive payments in the country.

However, setting up a UK bank account can be a time-consuming process, so we advise to start the process of opening one as soon as possible to avoid unnecessary delays.

The UK is an attractive option for Indian businesses

Setting up a company in the UK may seem like a daunting process, but with the right support and resources, it is a relatively straightforward task.

The UK can provide ample opportunities for Indian companies looking to grow and thrive in a new and promising marketplace. By making prudent and well-informed decisions early on, Indian businesses can position themselves to take advantage of the opportunities presented by the India-UK trade partnership.

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Sneha Nainwal is the Head of India Desk at Shakespeare Martineau. Sneha is dual-qualified to practise law in India and England & Wales.


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