1. Doing Business in the U.K.
Presented by Maria Fandrakis, Smith and Williamson and Mark McGarry, Saffery Champness LLP

2. Introducing the U.K.

3. Introducing the U.K. Population: 65,637,239 * Area: 242,500 sq. km ~
GDP: USD 2,782,363 (2018) *
Overall World Doing Business
Ranking: 7 *
* Estimated figures for 2018 – The World Bank
~ Wikipedia

4. Introducing the U.K. What constitutes the United Kingdom?
England?
Scotland?
Wales?
Ireland?
Great Britain?
Who holds power in the United Kingdom?
The monarch?
Parliament and Government?
The House of Commons & the House of Lords?

5. Introducing the U.K. Entrepreneurs Scale-ups Inward bound investment
Key sectors

6. Client case study 1

7. Case study 1 Client introduction from Nexia Australia.
Their nature of business is mining.
The reach of the group also spans to South Africa and the Republic of Congo.
The parent company was listed in Australia.
They took a decision to re-domicile from Australia to the U.K.
The new U.K parent entity was AIM listed.
The Australian parent company to be disbanded.
CEO and CFO were seconded from Australia to the U.K.
A number of other senior executives based all around the world were also seconded to the U.K. company.
The U.K. company recruited local hire NEDs.

8. Challenges – Case study 1

9. Challenges – Case study 1
Trusted advisor able to manage their international requirements in the U.K.
Immediate presence & service address in the U.K.
Compliance with Company’s House legal requirements.
Employees tax implications for directors & seconded team.
Remuneration structuring for local NED hires.

10. Challenges – Case study 1
Compliance with legal requirements of U.K. Tax Authority.
U.K. GAAP reporting compliance.
AIM listing rules.
Full back office assistance.

11. Solutions – Case study 1

12. Solutions – Case study 1 Registered office facility address
Company secretarial assistance by experienced U.K. team.
Tax advice surrounding employment contract and remuneration arrangements for their senior executives/ directors ‘seconded’ to the U.K..
Tax advice and assistance on equity arrangements.
Share Incentive trust.
Remuneration arrangements for the U.K. NED hires.
Payroll processing service.
Pensions auto-enrolment advice.

13. Solutions – Case study 1 (continued)
Review of previous year’s Annual Report and the latest Half- year Interim Report.
Report issued highlighting the additional disclosures required to meet the Financial Reporting requirements in the U.K. – covering AIM, U.K. Accounting standards applicable, Company law, etc.
Business Outsourcing assistance with set-up & maintenance of accounting records, VAT compliance, Corporation tax compliance, Payroll compliance, Company secretarial compliance, etc.

14. Case study 2

15. Case study 2
US computer hardware company
No previous business presence outside US
Identified U.K. as potential location as first step in global expansion
Senior US employees to transfer to establish the business

16. Challenges - Case study 2

17. Challenges – Case study 2
Costs
Financing
Banking arrangements
Location
Recruitment of appropriately skilled employees
Work permits for US employees
Administrative support, including with its accounting and taxation obligations

18. Solutions - Case study 2

19. Solutions – Case study 2
Introductions to real estate search agents and employee recruitment agents
Guidance given on remuneration packages
Financial forecasts of prospective sales, full costings of expenses and working capital requirements
Advice on possible structures resulting in the incorporation of a subsidiary in the U.K.
Liaising with lawyers on work permits, employment contracts and other employment issues and with a major bank to open accounts for the new company
Provision of full back office services
Over subsequent years assisting the new company to establish business operations in other European countries

20. Value – Case studies 1 & 2

21. Value International Network with coverage in many countries
Collaboration between teams;
High level of service;
Extension of Nexia team – client perception;
Trusted relationship from day 1;
Open channels of communication.
Expert advice from one provider/ network.
Full service offering all in one place.
In safe hands – help that eased the stress of re-domicile.

22. Summary - benefits and challenges of Doing Business in the U.K.

23. Benefits and challenges
The U.K. is the number 1 destination for inward investment in Europe
Opportunities in large range of different business sectors
Low taxation compared to most other countries – companies’ tax rate of 19%, reducing to 17% in 2020, with 10% patent box and tax incentives such as exemptions on dividends and on capital gains from investments in trading subsidiaries and reliefs, such as R&D, and extensive tax treaties
Second largest labour force in the EU (> 30 million) with strong skills, a flexible workforce and competitive employment costs with low social security costs compared to other European countries
U.K. Government is committed to encouraging overseas companies and entrepreneurs to establish and invest in the U.K..
Government has £120 billion investment programme to improve our transport systems.
Largest air transport system and second largest port system in Europe.
Main challenge, as in other countries, is opening a bank account.

24. The opportunity matrix
Category
Factor
Ranking
High/Moderate/Low 1.
Ease of starting a business
Establishment of business entity
Obtaining business permits
Low
No permits required but some businesses require registration for regulatory purposes 2.
Ease of earnings repatriation
Payment of dividends
Foreign exchange controls
None 3.
Ease of tax compliance
Overall complexity of tax rules and tax administration procedures
Availability of tax incentives/concessions
Occurrence of tax audits
Transfer pricing enforcement
Moderate
High 4.
Ease of hiring and firing
Laws that promote labour flexibility

25. The opportunity matrix
Category
Factor
Ranking
High/Moderate/Low 5.
Ease of registering and protecting intellectual property
Laws that secure
intellectual property rights
Moderate 6.
Ease of obtaining financing
Stable banking system and deep capital markets 7.
Ease of trading across borders
Availability of adequate IT and communications infrastructure
High 8.
Ease of contract enforceability
Robust impartial commercial legal framework and adequate dispute resolution mechanisms 9.
Ease of insolvency resolution
Robust legal framework that facilitates insolvency/winding up of business

26. Questions and answers?
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