Many people decide to move abroad for personal reasons, such as a better quality of life. They dream of becoming their own boss and doing away with the relentless nine to five routine. While setting up a bar in the Bahamas with tourists sipping your famous Pina Coladas at sunset might be a nice idea, to put it – or any other business overseas – into practice, is much harder in reality. Whether you’ve never been very business-savvy or you’re a corporate giant, setting up a Company abroad is tricky.
The process requires thorough research on your behalf. You will need enough money to sustain yourself for at least a year, preferably two years. The costs involved in setting up can be astronomical, so it is paramount that you have enough money to get started and to do it right.
Firstly you need to make sure you can work in your chosen country if you choose to live there. If you are an EU citizen, then you can trade elsewhere in the EU. Countries such as Canada, the United States, New Zealand and Australia however, only let a certain number of immigrants in each year – and you will need a visa. If you plan to move to the United States you might be eligible for a Business Skills visa. Should you move abroad, your UK tax position will change and it is important you hire a tax advisor to help you with paying UK tax.
The most important part of setting up abroad is research. Not only will you perhaps need to learn a new language, but you will need to learn local laws and tax systems, and make sure that your location is suitable. If your business will rely on the tourist trade then you should set up in a tourist area. What is crucial is to make sure there is a market for your business. It is unlikely that your café will survive in an area already saturated with them. Ask yourself what is in demand and where the gaps are in the market. You need to live like a local and understand your neighbours.
A summary of points to consider:
Languages – If you can’t speak the language then simple tasks such as filling in forms or creating a job advertisement can seem impossible.
Working hours and salaries – You must abide by local working hours in your chosen country and pay appropriate salaries for the job and area.
Visas – Securing a visa can be difficult if you plan to move outside of the EU. You must research immigration laws and processes.
Tax – Hire an accountant to help you with local tax laws so you don’t get caught out. Most UK tax advisors are not always familiar with foreign tax systems but having a UK tax advisor is also important because you might have to pay UK tax depending on your residency status.
Market – Your target market in the UK might not be the same in your chosen country.
Employees – Will you hire locals or UK employees? This is important for payroll purposes and if you employ from the UK, they will need to arrange for immigration and research their own tax implications.
The best way to make sure you are on track is to create a business plan. This should include details of your product, costs, operations such as how you will conduct business and financial forecasts. You should be detailed with it and include facts and figures about the market, the area you plan to trade in, competition and anything else that will help you get a clear picture of your business. It is necessary to have a business plan should you require a bank loan. The bank will also want to know how you intend to manage, and if you have any security to offer against the loan.
One of the smartest ways to make sure your set-up goes smoothly is to get in touch with an advisor in the area who can help you with all of this information. Major UK banks will be able to offer you contact details for overseas advisors.
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