Expanding Your Business
Operations to the UK
Post-Brexit – Part 1
Free Movement of Workers
Early this year, I was invited to host business meetings with several businesses looking to expand their business operations to the UK post-Brexit. Primarily, these were EU based businesses.
However, some of the insights do apply to non-EU based businesses. The current rules affecting EU businesses are similar to those that have always applied to non-EU based businesses.
Having said this, it is much easier to make online orders with the rest of the world than the EU. The rest of the world has figured out the necessary trade rules and restrictions, while for the EU counterparts it is very much a work in progress.
The end of the free movement of workers and how does this affect your business expansion to the UK
From the 1st January 2021, the EU nationals who intend either to work in the UK, set up or expand their business in the UK are required to hold the appropriate visa.
It is no longer possible to simply show up at the border and expect a safe passage. In fact, the Border Force made the point of detaining potential jobseekers and escalating deportation procedures.
Depending on your country of origin, you will be required to hold the appropriate visa that corresponds to the correct purpose of your journey to the UK. EU nationals potentially have the right to visit the UK visa free. However, they are not permitted to stay freely in the UK.
EU nationals who have arrived in the UK before 31 December 2020 are expected to have secured their pre-settled or settled status in order to be able to live, work or study in the UK. The right to use the NHS, public schools and social security are attached to this status.
What UK immigration categories are suitable for your business when expanding your business operations to the UK?
Here we are looking at some important UK immigration considerations as you expand your business operations to the UK.
If you are hiring workers based in the UK, you need to make sure that your employees have the necessary UK immigration status
As you expand your business operations to the UK, you may be looking to hire a suitable work force in the UK. If this is the case, you will be looking at the local workforce who do not require a visa to work in the UK. This is how you can identify these individuals, as they are:
- British or Irish nationals;
- EU nationals or their family members who have acquired settled or pre-settled status;
- Family members of British or Irish nationals who have limited or indefinite leave to remain based on their family status;
- Third country nationals who have acquired indefinite leave to remain and their status has not lapsed.
If you are dealing with EU nationals or third country nationals who do not have settled or pre-settled status and cannot demonstrate that they have the right to work under the UK immigration rules, then you will need to acquire a sponsor licence in order to sponsor overseas nationals to work for you in the UK.
It should be noted that applying for the sponsor licence is only an option if you establish a legal entity in the UK. This is either an independent English company or a wholly owned subsidiary of your overseas company in the UK. You also need to demonstrate that the business is profitable and operational for at least 3 years before you apply for a sponsor licence to sponsor overseas workers to the UK.
You cannot apply for a sponsor licence to hire workers in the UK if you do not have suitable business presence in the UK. You may be looking to outsource freelance services or workers in the UK. However, when doing so you still need to be aware of some of the pitfalls that we are not covering here.
If you are considering to send your staff from the overseas, then you should consider these UK immigration requirements
If you are looking to expand your business operations in the UK, you are likely to consider the requirements of UK Representative of Overseas Business visa. This UK immigration category is now replaced with Global Business Mobility – UK Expansion Worker visa. This specific visa allows you to send an employee of your choice to establish business operations in the UK. However, this visa does not allow your employees to settle permanently in the UK. The employees are expected to return to their home country once the business expansion project in the UK is completed.
Historically, overseas business owners preferred to utilise Representative of Overseas Business visa themselves personally or send their most senior people or business partners to continue business operations in the UK.
The visa requirement is to register a branch or incorporate a subsidiary in the UK. You should note that you only need to start registration or incorporation procedures only after the visa application has been approved and the person in question has relocated to the UK.
Should you need to hire additional staff in the UK, you will need to make sure that these potential employees are not required to have the necessary visa in order to work for your business in the UK.
Your UK business will need to apply for the appropriate sponsor licence in order to bring more employees from your home country or overseas or if you are hiring somebody based in the UK who needs the appropriate visa in order to work for your business in the UK.
However, if you do decide you need to apply for a sponsor licence, you will need to demonstrate that the business has been functioning well for at least 3 years before you apply.
If you are opening a new business venture in the UK, then these considerations apply to you.
Tier 1 Innovator visa allows you to start brand new business operations in the UK. There are a number of detailed requirements attached to this visa category. You will need to compare Innovator visa requirements against the requirements for Global Business Mobility – UK Business Expansion Worker visa, in order to make sure that this is the best available option for you and your business.
Historically, under Tier 1 Innovator visa (especially, under its predecessor Tier 1 Entrepreneur visa) the requirement and legal expectation was to hire local workforce that does not need a visa to work for you in the UK.
What does the end of free movement of workers mean for your new business operations in the UK?
The end of free movement of workers means that you will need to make the following decisions:
- Hire the local workforce in the UK who have the right to work and do not need a visa to work in the UK;
- Whether to establish a business presence in the UK in the form of a branch of the home country company or a wholly owned subsidiary;
- Assess whether your UK based business requires a sponsor licence in order to employ more people in the UK or transfer more employees from the home country.
Here we only addressed some of the UK immigration requirements. However, deciding to expand business operations to the UK also means having to consider UK tax requirements and implications as well as the correct corporate structure in accordance with the requirements of the law in the UK and possible practical considerations for the business operations to be carried out successfully in the UK.
You are looking to expand your business operations or possibly to relocate to the UK and you want to be able to do so in the best possible way for your business, schedule a phone call with me.
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Saule Voluckyte, M.A.E.S, LL.B, FAIA
I have been working exclusively with UHNWI in Mayfair, London since January 2008. I built specialist knowledge and expertise required to serve ultra high net worth individuals investing, operating and relocating to the UK or Switzerland.
Within the industry, I am the single adviser who is able to traverse the different areas of expertise and bring a comprehensive approach across: global structuring, UK immigration, international taxation and FOREX to develop their global wealth strategy, while they build, grow and expand their wealth worldwide.
Previous experience as one of the senior advisors for the government, made me a go-to person when delicate and uncomfortable scenarios involving heads of state need to be handled with care and preserve privacy.
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