Sunday, October 7, 2018

Asking Experts: Setting Up in the UK


You need to ask yourself a question, “Do I want to expand to the UK and Europe?” If the answer is “No”, then I give you the rest of the day off. However, if your answer is “Yes” then you have to stay on this page and ask yourself more questions…

To make sure you’re asking the right questions and finding the right answers, I spoke to Ricky Noshe, Head of UK Operations with SimplePayday, a service that has itself traversed the Atlantic, and asked him about setting up in the UK.

1.  What are the first steps of setting up a business in another country?
When the decision has been taken to expand your business and set up in a new country then the following 2 key areas need to be reviewed: -
 Your Trade
  • How do you plan to trade?
  • Will you contract in the local country?
  • Will you provide support to the Parent Company?
  • What are the tax implications of your plans?
  • Are you subject to transfer pricing?
  • Is your structure scalable?
Your People
  • What are the appropriate levels of remuneration packages?
  • Do you require work permits?
  • Are your key personnel internationally mobile?
  • Do you have an international stock plan?
With the entity in place and the key personnel on board, then you can attend to the secondary level of compliance in the knowledge that your foundations are secure.

2. What are the biggest mistakes US firms make when setting up in the UK?

With many key players having international operations experience the mistakes are becoming less of an issue. However, the basic errors which can still occur are: -
  • Not utilising specialist Human Resources advice when formulating remuneration packages.
  • Not recognising local employment law requirements.
  • Building an international business on a country by country basis without focussing on the global picture. This can result in problems when:- attempting to transfer personnel between countries; implementing global stock options plans; creating a global uniform finance system; adding additional countries or territories to the group and so forth.
3. Is the cost of outsourcing detrimental to a business that needs to invest as much as it can in setting up?

No, far from it!

Outsourcing is a broad term for a range of different services. Many will be familiar with the BPO approach whereby solely Business Processing is outsourced.

Our focus is on SME outsourcing and this discipline is focused on cost-centre services, enabling a business to operate on a leaner platform with the following departments being provided externally: – Human Resources; Payroll; Accounting; Payments; Credit Control; Taxation; Administration; Company Secretarial and IT.

The business is able to “buy” percentages of people as it contracts for what it needs. The contract can also be variable enabling additional resource to be provided at set times at a fixed monthly cost. Therefore, as a result of this style of “purchase” together with streamlined procedures and processes that are in place, clients should expect to make a significant saving when they outsource any or all of the above departments. Recent examples include a cost reduction for a Client of circa 40%.

4. What are your top tips for setting up in the UK?
  •  Think Globally!
  • Be flexible in your approach
  • Find a true “partner” to outsource
  • Always comply with statutory deadlines – the penalties are onerous!
  • Contact the US Commercial Service for solid and practical advice
5. What are the advantages of setting up in the UK?
From our perspective as your international office, we would consider the following to be strong advantages: -
  • Reducing corporation tax rates
  • Solid and effective banking systems
  • One language/one time zone
  • Broad spectrum of skill sets
  • UK is a good transport hub

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