This publication is a joint project with Doing business in the UK Contents Executive summary 4 Disclaimer Foreword 6 This document is issued by HSBC Bank plc (the ‘Bank’) in the UK. Introduction – Doing business in the UK 8 It is not intended as an offer or solicitation for business to anyone Conducting business in the UK 12 in any jurisdiction. It is not intended for distribution to anyone located in or resident in jurisdictions which Taxation in the UK 16 restrict the distribution of this document. It shall not be copied, Audit and accountancy 23 reproduced, transmitted or further distributed by any recipient. Human Resources and Employment Law 26 The information contained in Trade 30 this document is of a general nature only. It is not meant to Banking in the UK 34 be comprehensive and does not constitute financial, legal, tax or HSBC in the UK 36 other professional advice. You should not act upon the information Country overview 37 contained in this publication without obtaining specific professional Contacts 38 advice. This document is produced by the Bank together with PricewaterhouseCoopers (‘PwC’). Whilst every care has been taken in preparing this document, neither the Bank nor PwC makes any guarantee, representation or warranty (express or implied) as to its accuracy or completeness, and under no circumstances will the Bank or PwC be liable for any loss caused by reliance on any opinion or statement made in this document. Except as specifically indicated, the expressions of opinion are those of the Bank and/ or PwC only and are subject to change without notice. The materials contained in this publication were assembled in March 2013 and were based on the law enforceable and information available at that time. Executive summary The UK’s position, both • A company can be • New immigration rules geographically and in respect incorporated in the UK introduced in 2008 mean of business culture, puts it with same day formation. that procedures for visiting at the centre of a diverse and working in the UK collection of markets and • It attracts an have changed recently and sectors. Its open market and internationally mobile and companies should ensure diversified economy present highly-skilled workforce. that they are addressing these. opportunities for new investors Special rules are in existence to access a domestic market • The headline tax rate for high net worth individuals and to use the location as from 1 April 2013 for and entrepreneurs investing a gateway to the rest of companies is 23%, which in the UK. the world. the government will be reducing to 21% by 2014. The government in the Based on the World Bank UK is actively addressing Doing Business survey, the • Foreign businesses coming opportunities for investors UK is ranked top in Europe to the UK should be aware to come to the UK through in terms of ease of doing that the accounts of all UK fiscal reforms. Whilst there business and fourth in the companies are subject to is a genuine drive to ensure world. It offers a number of public disclosure through that the UK has a simple competitive advantages as a the Registrar of Companies. and easy to understand legal hub for investors to conduct environment in which to do their business, which can be • It has one of the largest business, investors still need summarised as follows: treaty networks. to be aware of regulatory aspects relating to their specific • The UK is culturally a highly- • The scope of personal taxation sector, where appropriate. efficient place from which varies according to the length This document contains to access world markets. of the individual’s stay in the references to some common It boasts a central time zone UK and whether they are issues that investors should position, being ideally placed domiciled in the UK, allowing be aware of when operating between the markets of the foreign nationals to arrange in the UK, although specific East and West, good transport their tax affairs efficiently. advice on their particular infrastructure, accessibility With effect from 6 April 2013 circumstances should of language and familiarity a new statutory residence test be sought. of business culture for many should be introduced, providing new investors. certainty to individuals regarding their UK tax residence • The UK is a flexible and status. The government is business-minded location, also introducing a number historically recognised as of measures designed to a well-established and prevent tax avoidance and reputable jurisdiction in make the reporting in the UK which to conduct business. more transparent. 4 Foreword The UK’s success in attracting you in expanding overseas. In Jacques-Emmanuel Blanchet Foreign Direct Investment the UK, our strong international Head of Commercial Banking, UK remains undiminished. The presence and dedicated global HSBC Bank plc World Investment report of relationship management team 2009 places the UK capital can help you negotiate the stock of foreign direct forthcoming opportunities and investment at US$1.0 trillion challenges. with only the USA recording a higher figure. This investment We hope our ‘Doing business is due to the fundamentals of in the UK’ guide will provide the UK economy boasting a you with some valuable insight large market, quality suppliers into the UK market. The guide and outstanding support has been co-written by HSBC networks. In addition the UK and PricewaterhouseCoopers. offers a springboard for growth Like HSBC, PwC has a strong to global companies and those global network and a deep aspiring to become global. understanding of the UK marketplace. Together we Through its merger with possess a wealth of experience Midland Bank in 1992, HSBC and teams of local experts has had a UK presence since ready to support your ambitions 1836, and now has 1,330 in this market. branches across the UK. With our headquarters in On behalf of HSBC I hope that London, HSBC is one of the you find this guide useful, and largest banking and financial would like to wish you every services organisations in the success in the UK economy. world. Thanks to our global connections, we are best placed to support businesses looking to invest in the UK market. Trading internationally expands a business’ horizons, offering unique opportunities for growth, development and profit building. HSBC’s experience and range of solutions across trade finance means we are ideally positioned to support 6 Introduction Doing business in the UK Welcome to our guide to Economic History • A flexible and business- doing business in the UK. In minded location; this publication we hope to The UK’s open market and provide you with an insight into diversified economy has • Accessibility of language; the key aspects of undertaking traditionally provided an active business and investing in the base for overseas investors • A familiar gateway into the UK and answer many of the and businesses. It has a rest of Europe and a member questions overseas businesses long and successful history of the EU; and entrepreneurs have when of trade with the rest of the making their first venture into world. In the current economic • A solid, credible and long- the UK market. climate, overseas investment established structure for is as important as ever to the companies to build businesses; Please note that the UK refers growth of the UK economy to the United Kingdom of Great and the government has been • One of the world’s global Britain and Northern Ireland sending out a clear message financial centres; and consists of three distinct that the UK is very much jurisdictions: ‘open for business’. • A top-class environment for research and development work; • England and Wales; Current advantages • Scotland; and for new businesses • Opportunity to raise capital • Northern Ireland. through the UK markets; and The UK is a large and dynamic Each of these has its own legal marketplace in its own right, • A wide network of Tax Treaties. system. Although the three but also benefits from being systems broadly adopt the an excellent gateway to other The UK does have a suite same approach to business, parts of the world. Foreign of regulatory practices that there are some important investors coming to the UK need to be considered when distinctions and accordingly, have experienced its many coming to the UK and there if you are planning to set up advantages, including: is still complexity of tax your business in Scotland or legislation, particularly related Northern Ireland, it is important • A deep pool of to overseas operations, although to seek expert local advice. workforce expertise; the government has recently This publication focuses on introduced measures to simplify issues related to doing business • Excellent transport links it in order to make the tax in England and Wales and with the rest of the world; compliance process easier for broadly views the UK as a companies to understand. single jurisdiction through • A central time zone position which the laws of England and ideally placed between the Wales apply. markets of the East and West; 8 The economic environment with high levels of investment • the size of the company is Europe’s main funding The future from Germany, France, to be assisted; and investment for research and The UK has recently seen Australia, India, Canada and Italy, technological development. The government recently the impact of the worldwide and rapidly increasing levels • the type of project investment. introduced several new recession and during 2008 of investment from China The Enterprise Investment initiatives that aim to improve and 2009 the UK economy and Japan. These grants can cover capital Schemed (EIS) enables a basic the competitiveness of the UK shrank by around 6% (Office investment, job creation/ rate income tax reduction to in the world market and make of National Statistics).