For many overseas entrepreneurs, the United Kingdom offers the perfect place to set up a new business enterprise. With its robust economy, pro-business laws and policies, a plentiful supply of investment capital, a modern transport and communication network, and availability of highly skilled professionals, it is easy to see why. Furthermore, UK-based startups received record levels of investment in 2024. So if you are contemplating “how do I start a business in the UK”, this article will explain how to start a company in UK in 2025. Here, we explain who can set up a business in the UK, the business culture, the business structures available, how to start a business in the UK and how to obtain a business visa in the UK. Additionally, we outline the key resources you need.
Furthermore, for more information on the range of business visas available to overseas entrepreneurs, please speak to our business immigration law team.
What is the Business Culture in the United Kingdom?
Previously, traditional bowler hats, umbrellas, and year-round formal wear no longer apply in the UK. Instead, smart casual clothing is now the norm in the British workplace. Many professionals in the UK now work from home, allowing for a more relaxed work/life balance. However, professionalism, punctuality, and clear communication are still highly valued. Additionally, the UK prides itself on high levels of innovation and creativity, making it a vibrant place for new businesses.
Who Can Start a Business in the United Kingdom?
Essentially, in short, anyone from around the world can start a business in the UK, provided that they meet the legal requirements. So, any foreigner outside the UK can start a business in the UK. Accordingly, the main factors to consider are:
- Whether there is a suitable UK business visa for your needs
- Meet the eligibility criteria for the visa, and
- You are of ‘good character.’
Specifically, with an Innovator Founder Visa, you can start a brand new business venture as long as it is innovative, unique, viable, sustainable, and has been endorsed by an approved endorsing body. Alternatively, with a Global Business Mobility expansion worker visa, you can start a branch or subsidiary of your existing overseas business. Moreover, see below for more details on the business visas that are available to you.
Legal Structures for Businesses in the United Kingdom
One of the first decisions you will need to make when setting up a business in the UK is the type of legal structure to use. Consequently, here are some of the options available:
Sole Trader:
A sole trader is the simplest business structure. Consequently, you run the business as an individual, keeping all profits after tax but also bearing personal liability for any debts.
Partnership
Moreover, in a partnership, two or more individuals share responsibility for the business. Partners share profits, losses, and liabilities of the business.
Limited Partnership
Specifically, you must have at least one ‘general partner’ and one ‘limited partner’. Meanwhile, general partners run all aspects of the business and have unlimited personal liability, while limited partners contribute capital and have the protection of limited liability.
Limited Liability Partnership (LLP)
Similarly, an LLP provides limited liability for the debts of the business to all partners. Additionally, it combines elements of partnerships and companies, allowing partners to share management while protecting their personal assets.
Private Limited Company (Ltd)
In fact, Ltd is the most common form of business structure in the UK. Furthermore, a Ltd company is a separate legal entity from its owners, offering limited liability. Moreover, it can have one or more shareholders and directors, and its shares cannot be publicly traded.
Public Limited Company (PLC)
A PLC is similar to a Ltd company but can offer shares to the public. It requires a minimum share capital and stricter regulatory requirements.
Unlimited Company
Unlimited companies are less common in the UK and involve owners having unlimited liability for business debts. This structure is usually chosen for specific financial or legal reasons.
Social Enterprise
Social enterprises are businesses with a social or environmental mission. They reinvest profits into their goals rather than distributing them to shareholders.
Unincorporated Association
Typically, an unincorporated association is a group that is formed for a specific purpose, not primarily for profit. Specifically, it is typically used for clubs, societies, and voluntary groups in the UK.
Offshore Company
An offshore company is incorporated outside of the UK but can operate within it. It often offers tax advantages and fewer regulations.
We recommend speaking to an accountant, business adviser, or company formation specialist to understand which business structure is best for your needs.
How to Start a Business in the UK as an Expat
The process of how to start a company in UK is incredibly easy. The main steps are as follows:
1. Draft a Business Plan
To set up a business here, you will first need to write a comprehensive business plan that outlines your business goals, strategies, and financial projections. Moreover, this is essential for securing funding and guiding your business, as well as securing a business visa.
2. Check If You Qualify for a Visa
At this early stage, we recommend ensuring you will qualify for a business visa in the UK. In particular, an immigration lawyer can advise on the best visa for your needs and the steps to take to ensure that your visa application will be approved. Notably, specific visas are available for entrepreneurs and business people.
3. Apply for Your Business Visa
An immigration lawyer can handle this process for you.
4. Decide on Your Business Structure
Fundamentally, choose a legal structure that best suits your business needs. Moreover, consider liability, tax implications, and administrative requirements.
5. Choose a Business Name and Address
Select a unique name that complies with UK regulations. Your business must also have a registered address in the UK.
6. Register with HM Revenue and Customs (HMRC)
Register your business with HMRC for tax purposes. Depending on your structure, you may also need to register with Companies House (this applies to limited companies but not to sole traders).
7. Check If There are Any Additional Rules
Certain businesses require specific licenses or adhere to regulatory standards. Ensure you comply with all relevant laws.
If you are considering starting up a non-profit company in the United Kingdom focused on social, educational, or charitable goals, you must register with the Charity Commission and adhere to specific regulations and reporting requirements.
How to Obtain a Business Visa in the UK
Business visa applications can be made online on the UK Home Office website. The exact process for obtaining a business visa in the UK will depend on the type of visa you apply for. Moreover, each has its own nuances and requirements, as explained below.
Innovator Founder Visa
The Innovator Founder visa is for businesspeople seeking to establish a business in the UK. It requires endorsement from an approved body and a viable business idea. To apply, you will need to:
- Draft a business plan
- Have your business plan endorsed as being unique, innovative, viable, and sustainable by an approved endorsing body in the UK
- Apply for your Innovator Founder visa online and pay the current application fee of £1,274.
- Submit any documents required to support your application
- Have your identity verified
Self Sponsorship Route
The self-sponsorship route enables overseas business people to set up their own business in the UK, apply for a sponsor licence, and then sponsor themselves for a work visa.
To apply, you will need to:
- Set up a business in the UK
- Apply for a sponsor licence for your new business
- Issue yourself with a Certificate of Sponsorship
- Apply online for a Skilled Worker visa and pay the application fee (£769 for up to 3 years or £1,519 for more than 3 years, if applying from outside the UK) plus an Immigration Health Surcharge of £1,035 per year.
- Submit any documents required to support your application
- Have your identity verified
The Self Sponsorship route is the ideal answer to how to start a small business UK. It is an incredibly flexible route. Still wondering if the Self-Sponsorship route is right for you? Watch this video, where we untangle the truth and address all the common concerns!
Can You Really Self-Sponsor Your UK Visa? | Untangling the Truth
Global Business Mobility Expansion Worker Visa
This visa is aimed at overseas businesses with plans to open a new branch or subsidiary in the United Kingdom. Additionally, to apply, you will need to:
- Get a Certificate of Sponsorship
- Apply online for a UK Expansion Worker visa and pay the application fee of £319 plus an Immigration Health Surcharge of £1,035 per year.
- Submit any documents required to support your application
- Have your identity verified
Administering Your Business in the United Kingdom
When it comes to the administration of your business in the UK, you will need to consider the following:
Business Banking in the UK
Open a business bank account to manage your finances efficiently. Many UK banks offer tailored accounts for businesses with various features and services. However, it is best to wait until you are in the UK to open a bank account because you will need to provide evidence of your identity and business address. Nevertheless, several digital banking platforms now permit remote identity checks.
Taxation for Businesses in the UK
Make sure you understand the tax obligations for your business, including corporation tax, VAT, and payroll taxes. An accountant can help you with this. It is important to register with HMRC and ensure timely payments and filings.
Business Insurance in the UK
Make sure you have the necessary insurance for your business, such as employer’s liability, public liability, and professional indemnity. This will protect your business from various risks.
Employing Staff When Starting a Business in the UK
Understand the legal requirements for hiring employees, including contracts, wages, and working conditions. Register as an employer with HMRC’s PAYE system within four weeks of hiring staff and comply with employment laws.
How Much Does It Cost to Open a Business in the UK?
If you are going with the Self-Sponsorship option, you can register a UK company for £50. Next, apply for a sponsor licence for £573. Then, your Skilled Worker visa costs £769–£1,519 plus a £1,035/year health surcharge. Additionally, you need a budget of £20,000 for legal support to guide you through all the steps of the Self-Sponsorship process. Then, set aside £50–£100 for domain and registered-office services. In total, you must plan on a budget of £22,000–£23,000 to launch a UK business under Self-Sponsorship, covering all legal and Home Office costs.
Support and Advice When Starting a Business in the United Kingdom
There is no lack of organisations providing support and advice for new businesses in the UK, including local chambers of commerce, trade associations, and government agencies. Here are some useful resources
GOV.UK – The UK government’s official website provides comprehensive information on starting and running a business.
- HM Revenue and Customs (HMRC) – For tax and registration information.
- Companies House – For company registration and legal requirements.
- British Chambers of Commerce – Offers support and networking opportunities for businesses.
- The King’s Entrepreneurs Trust – Provides support for young overseas entrepreneurs.
Final Words
Starting a business in the UK involves careful planning and meeting all of the legal requirements here. Consequently, the hard work you put in at the start will pay dividends down the line. Furthermore, by understanding the business culture, choosing the right structure, and securing the necessary permissions, you can establish a successful business in the vibrant UK market. Moreover, whether you are new to the world of business or a seasoned entrepreneur, the UK offers ample opportunities for growth and innovation.
Still confused about how to start a small business in the UK or unable to find the right business visa route? Get a free assessment with one of our experts at A Y & J Solicitors.
At A Y & J Solicitors, we have handled over 100s of successful Self-Sponsorship applications. With a 95% success rate, we have achieved an overall track record of 5,000+ successful immigration and visa cases through our result-driven approach to every application. We take on each client with the genuine intention to provide our undivided care and attention to their case. We guide you through every step of your Self-Sponsorship process, so you can trust the experts to manage your application and work toward your success.
Why A Y & J Solicitors?
With over thousands of successful immigration cases to our name, A Y & J Solicitors has built its reputation on trust, care, and real results. Over the 15+ years of working in UK immigration law, we’ve helped individuals and businesses confidently navigate sponsor licences, UK visas, and ILR applications. We’re proud to be recognised by The Legal 500, but it’s our clients’ peace of mind that matters most. When you work with us, you get clear advice, honest support, and a team that’s truly on your side.
