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Exploring the Advantages of a UK Branch Office for Companies Outside the EEA?

Feb 18, 2020
Last Updated on May 22, 2024

Even with all the noise and political upheaval regarding Brexit, the UK remains and will continue to remain one of the best locations in which to do business as we progress into the 2020s.  For many companies outside of the EU and EEA considering their options for expansion and growth, making decisions which will prove sustainable and ultimately successful in the medium and long term is essential.  In this article, we will explore why investing in a UK branch office provides a reliable route to business growth, and how this can be achieved.

Why the UK will continue to attract the most successful businesses

In mid-2019, despite the often rather negative press regarding the possible impact of Brexit on the UK economy, Billionaire investor, Warren Buffett stated on record that he will still invest in the UK if it leaves the EU or not; “we welcome the chance to put money out any place where we think we understand and sort of trust the system.  We’re never going to understand any other culture or the tax laws or the customs as well as the US, but we can come awfully close in Britain”.  To underscore his point, he affirmed he is “ready to buy something in the UK tomorrow”.

It is not just US billionaires investing in the UK; according to the ‘India meets Britain Tracker’, the volume of Indian firms operating in the UK jumped over 5% between 2018 and 2019.  There are now 842 Indian businesses in the UK representing a total turnover of £48 billion.

And in perhaps the biggest indicator that overseas business are piling in the UK, analysis by global consulting firm, EY, revealed that Britain snatched the top spot in a survey ranking attractiveness as a business investment destination from the US – a position they have held since 2014.  In doing so, the UK beat Germany, China, France, Canada, India, Australia, Brazil and the United Arab Emirates.

This demonstrates that while Brexit may be all those outside of the UK hear in the news about this country, and while it may pose challenges if we leave the EU, businesses can see far past this and are confident in the country’s ability to drive sustainable business growth.

What are the advantages of having a UK branch office?

  • The most business-friendly country on earth – No one doubts that the UK is one of the most business-friendly nations on the planet. According to Forbes, the UK is rated the number one country for business of 161 nations, based on a range of criteria including property rights, innovation, taxes, technology, corruption, infrastructure, market size, political risk, quality of life, workforce, freedom (personal, trade and monetary), red tape and investor protection.
  • Access to the largest trading block – As members of the EU, the UK has immediate and direct access to the largest block of trading nations globally, with a population of over 500 million people. While there is uncertainty as to the exact future trading relationship the UK will have with the EU, the joint Political Declaration between the UK and EU states, “declaration establishes the parameters of an ambitious, broad, deep and flexible partnership across trade and economic cooperation with a comprehensive and balanced Free Trade Agreement at its core, law enforcement and criminal justice, foreign policy, security and defence and wider areas of cooperation”.
  • Access to finance and strength of the financial marketplace – London remains and is likely to continue to be one of the leading financial hubs in the world. The London bullion market, overseen by the London Bullion Market Association (LBMA), is the world’s largest base for gold and silver trading.  Furthermore, the UK is renowned for its availability of business funding and equity investment.  In 2018, a record £6.7bn in equity investment was placed into small businesses in the UK – making the UK highly attractive for growing businesses and start-ups.
  • Option of setting a wholly-owned subsidiary – when setting up a UK entity for an overseas-based company, a wholly-owned subsidiary can confer considerable benefits. A UK subsidiary can be ring-fenced from an overseas business, and if set up as a limited company, directors will have limited liability.  Subsidiaries are also able to easily transfer shares/bonds to stakeholders and can seek inclusion on the stock exchange.
  • Access to innovation hubs – another of the significant reasons to consider opening a UK presence is the ability to access skills and knowledge within a wide range of innovation and tech hubs across the UK and the EU.  This allows businesses to leverage a wealth of research, resources, training, funding, and to collaborate with other synergistic players in their sector.

Representative of an Overseas Business Visa

From an immigration stance, the UK makes it straightforward for businesses outside of the EEA to bring staff to the UK as their sole representative.  The Representative of an Overseas Business Visa is intended for this precise purpose and enables an employee to remain in the UK for an initial duration of three years, which can be extended for a further two years.  Once that individual has gained five years into total in the UK, they will then be able to apply for permanent settlement.  Importantly, those on a Representative of an Overseas Business Visa can bring their dependent family also.  Furthermore, once the branch is setup and established, the overseas business entity can then utilise the Sponsor Licence or the Tier 2 Intra-company Transfer Visa scheme to bring new staff members to the UK.

There are a number of criteria which must be met to be eligible for this Visa, including proving that the parent business is principally based outside of the UK and the individual has a high-level of industry knowledge and experience.

Final words

The UK makes it very easy for businesses from outside of the EEA to set up an entity within the UK, from tax, banking/financial, regulatory, company registration, and immigration perspectives. Most importantly, you can be reassured you will be warmly welcomed and encouraged to bring your business to the UK.  By leveraging the knowledge and expertise of those who specialise in assisting overseas companies in creating a foothold in the UK, you will maximise your chances of success, allowing you to focus your energy and time on your business operations.  We for one, can attest to the enormous success which is available in the UK and delight in assisting other companies achieve the same.

A Y & J Solicitors are specialists in immigration law based in central London.  If you would like more information regarding the Representative of an Overseas Business Visa, please contact us at [email protected] or call +44 20 7404 7933.

Disclaimer: No material/information provided on this website should be construed as legal advice. Readers should seek an appropriate professional advice for their immigration matters.

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