Vision to Venture: How Foreigners Can Launch Businesses in the UK in 2025

The UK has long been a hub for innovation, entrepreneurship, and business growth. With its robust economy, supportive government policies, and access to global markets, the UK is an ideal destination for foreign entrepreneurs to turn their business ideas into reality. Whether you’re looking to start a tech startup, open a retail store, or dive into the hospitality industry, 2025 offers unparalleled opportunities to establish and grow your venture in the UK.

In this blog, we will go over everything you need to know about starting business in UK as foreigner, including the various types of company structures, taxation, administration, and the various visas you can apply for.

1. Dynamic Business Environment: The UK ranks 8th globally for ease of doing business (World Bank), offering streamlined regulations and infrastructure to support startups and established businesses.
2. Access to Skilled Workforce: With a diverse and talented labor pool, the UK ensures businesses can attract the right skills for success.
3. Government Support: Programs like Innovator and Start-up Visas and access to funding initiatives make it easier for foreign entrepreneurs to enter the UK market.
4. Strategic Location: The UK serves as a gateway to Europe and beyond, providing access to over 500 million consumers.

There are several business types in the UK, and you must choose the one that best fits your company’s structure.
The legal business structure you select will affect many aspects of your company, including taxation, personal liability, and the amount of administrative work you must perform.

You can choose from the following:

Profits after you’ve paid your taxes. You are personally liable for any losses your company suffers. When it comes to running and naming your company, you must adhere to certain rules.

As a sole proprietor, you have the following duties and responsibilities:

• Keep track of your income and expenses
• Every year, file a self-assessment tax return
• Pay your income tax
• Pay for national insurance classes 2 and 4

A partnership firm is the most straightforward way to set up a company in the UK as a foreigner, for two or more people who would like to run a business together. The duties of a partnership business structure are similar to those of a sole proprietor, with the exception that you have one or more business partners. When you form a partnership firm, you must have a formal agreement outlining the agreed-upon split of earnings, losses, liabilities, and ownership.
When forming a business partnership, you must:

1. Select a name
2. Select a nominated partner – the ‘nominated partner’ is responsible for the partnership’s tax returns and financial management
3. Become a member of HM Revenue and Customs (HMRC)

A Limited Liability Partnership can be formed to conduct business with two or more members (LLP). A member can be an individual or a company (referred to as a “corporate member”).

As in a regular business partnership, each member pays tax on their share of the profits, but is not personally liable for any obligations that the business is unable to pay.

The following are the first steps in forming an LLP:

• Choosing a Business Name
• Possessing a registered address
• Having at least two members
• Having a written agreement outlining how the LLP will be run
• Members’ Duties and Responsibilities After Registering the LLP with Companies House

You must always have at least two “designated members” who have more responsibilities than other members

A Private Limited business must be administered by an appointed Director in addition to any shareholders. The finances of a limited company are separate from your personal finances as the founder. If you are the company’s sole employee, you can still register as a limited company by naming yourself as the Director.

The following are some of the Director’s responsibilities:

• Follow the guidelines outlined in the company’s articles of incorporation
• Maintain a record of the company’s activities and report any changes
• Accounts and corporate tax returns must be filed
• Corporation Tax must be paid
• Although employees can be hired, a Director is still legally responsible for the company’s records, accounts, and performance.
  Because it is a separate legal entity, the company has its own bank account and is subject to corporate tax. Corporation tax can be registered at the same time as your business is registered with Companies House, but unlike income tax, all profits made by a business are taxed, so there is no tax-free exemption. In contrast, the government allows for expenses and deductions that may reduce the amount of corporate tax owed.

Foreign entrepreneurs must first assess their eligibility to enter and work in the UK. The Innovator Visa is perfect for those with innovative, scalable business ideas, while the Start-up Visa caters to early-stage entrepreneurs. These visas require endorsement from UK-approved bodies and a detailed business plan.

Ensure all required documents are in order, including proof of funds, endorsements, and identification. The application process may take 3-8 weeks depending on your home country.

Your business plan should include:

• Market analysis
• Financial projections
• Unique selling points
• Growth strategies

Choose the right legal structure for your business:

• Sole Trader: Simple setup but offers no separation between personal and business liabilities.
• Limited Company: Protects personal assets and is the most popular choice among foreign entrepreneurs.
• Partnership: Ideal for joint ventures.

Your company name should be unique and registered with Companies House. You’ll also need a registered office address in the UK, which can be a physical location or a virtual office.

All businesses in the UK must register for taxes, including VAT if your revenue exceeds £85,000 annually. This ensures compliance with UK tax laws.

Certain industries, such as food and hospitality, may require specific licenses or certifications. Be sure to research and meet these requirements before commencing operations.

• Opening a UK Bank Account: Many foreign entrepreneurs face difficulties without a local address. Partner with UK-based service providers to simplify the process.
• Understanding Regulations: From tax filings to employment laws, navigating UK regulations can be complex. Seeking professional advice can help you avoid costly mistakes.
• Securing Funding: Research government grants, angel investors, and venture capital firms that support startups in the UK.

Below-mentioned are the various categories of UK Business Visas for starting a business in the UK as a non-resident. However, you must consult a UK Business Visa Solicitor or Lawyer to understand which category suits you the best!

• A UK Expansion Worker Visa allows you to enter the UK and open a branch or subsidiary firm of your existing overseas business
• This is the most popular business visa category, as it requires ZERO Investment and is a self-sponsored route
• This visa was launched just last year, in April 2022, as a replacement for the UK Sole Representative Visa
• You are also permitted to bring your partner and children (under the age of 18 years) to the UK with this visa

• The UK Innovator Visa is suitable for those entrepreneurs who have an Innovative, Viable, and Scalable business plan
• Along with this, you are required to have experience in doing business in that industry
• In order to apply for a UK Innovator Visa – you must first get an endorsement from a UK-government authorised endorsing body
• You are permitted to bring your partner and children (under the age of 18 years) to the UK with this visa

If you are seeking to establish a new business or venture in the UK or already own a business there, you might qualify for a Skilled Worker visa through self-sponsorship, where your own UK company sponsors you.

• A Skilled Worker Visa holder must always be employed by a UK Sponsor Licence holder in order to keep their status
• However, a Skilled Worker also includes CEO, Managing Director, Director, and other owner manager roles
• You are permitted to bring your partner and children (under the age of 18 years) to the UK with this visa