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The UK’s reputation for bureaucracy can be quite daunting for businesses looking to relocate, but it’s actually quite easy to start a company. The red tape doesn’t come from the government this time – it’s the banks that can make things difficult.
The UK has taken the top spot for two years in a row on the Forbes Best Countries for Business List. Start-up costs are lower than most other developed countries, and the UK government promotes entrepreneurship through Innovator and Start-up visas. Company incorporation is also relatively easy.
See also: The UK still the best country for business in 2019
But there’s one area that can prove quite tricky to navigate. The bureaucracy of opening a company bank account can lead to frustrations and lengthy delays.
Bank account blues
After registering a company, the next step is to open a bank account. Here’s where regulations can hold up the process. Anti-money-laundering (AML) procedures and “know your client” (KYC) requirements are the main culprits. These checks are done to combat fraud and, depending on the complexity of the company, can take anything from three to over six months to complete.
Why the delay?
AML and KYC checks can vary depending on the company structure and type of business. One such delay is when there are multiple directors or shareholders involved. They must all individually go through the KYC process. Gathering all the required documents and ensuring they provide enough proof can be quite time consuming. Banks can ask for a wide range of information such as business plans, websites, and details surrounding South African company operations.
Another delay arises from shares held in trusts. An example of such business would be a trust-owned South African company setting up a subsidiary in the UK. To open an account, banks can require full disclosure of all details related to the trust including the settlor, trustees and beneficiaries. Without proof of ID, ownership and addresses, it’s hard to get started in the UK.
An interim solution
While incorporating a new business can be quick, operating without a bank account is impossible. Waiting months for fraud checks isn’t an option, but luckily there’s a solution to tide you over – a managed trust account.
This account can usually be opened within two weeks and operates in your company’s name. It’s opened through a third party already operating within the UK such as Sable International. Clients can make payments into the account, and we can facilitate any payments that need to be made out of the account.
It’s a simple solution to get a business operating in the UK as quickly as possible.
Setting up in the UK
Incorporating a company can take as little as 48 hours. The process involves registering as an establishment with Companies House within one month of starting in the UK. This includes filing constituting documents and general company information which then become public record.
There are generally two options for businesses looking to relocate: a branch or subsidiary. A branch would be an extension of the current company, while a subsidiary is a separate limited company in the UK, giving it far more autonomy than that of a branch. It’s worthwhile speaking to a business relocation advisor to decide on the right solution for your business.
Another option is setting up an entirely new company. If an individual wants to start their own business in the UK, it should be set up in the simplest way possible – one director and one shareholder. More people can be added to the business at a later stage.
Why the UK?
One of the main reasons to expand your business to the UK is the economy. It’s a small, densely-populated and affluent country – finding a large customer base isn’t difficult. Besides this, it has one of the lowest corporate tax rates in the world and a myriad of tax reliefs to benefit from. Using a managed trust account lets you easily navigate the bank account red tape to get you trading in no time.
See also: Your guide to UK tax reliefs for SMEs
Taking your business to the UK doesn’t have to be difficult. A comprehensive business relocation service could be just what you need to get going. Once you’re past the set-up stage, you can focus on growing your company.
