Start of menu
Search US website
Close Menu
It’s important to understand business and cultural expectations when establishing a foreign office for global trade in the United Kingdom

Global Trade: How to Open a Foreign Office in the United KingdomARTICLE

By Debra Donston-Miller

A common language and culture, in addition to a business climate that is welcoming to international business, make the United Kingdom a key opportunity for U.S. companies looking to expand their global trade. Indeed, U.S. international businesses often look to open foreign offices in the U.K., which is the U.S.’s seventh-largest trading partner. Year to date as of April 2017, the U.S. exported $17.8 billion in goods to Britain and imported $17.4 billion in goods from that country, representing 2.9 percent of total U.S. global trade.1

The U.K., which comprises Great Britain (England, Wales and Scotland) and Northern Ireland, is currently part of the European Union but is scheduled to leave it on March 29, 2019.2 The U.K. economy is estimated to have grown 1.8 percent in 2016, second only to Germany's 1.9 percent among the world's G7 leading industrialized nations.3

The World Bank ranked the U.K. 16th of 190 in Ease of Doing business (as of June 2016).4 A high ranking in Ease of Doing Business means the regulatory environment is more conducive to the start up and operation of a local business. The U.K. also offers a relatively low corporate tax rate of 20 percent, one of the world’s oldest and most established judicial systems, and an English-speaking and highly skilled workforce.5

Types of U.K. Foreign Offices for Global Trade

A foreign company that wants to establish an international trade presence in the U.K. must register with Companies House, the U.K. registrar of companies. There are a number of ways that foreign investors or companies can expand global trade with a U.K. base of operations.7

1. U.K. Establishment

A U.K. establishment is a branch within the meaning of the Eleventh Company Law Directive, or a “place of business” that is not a branch that is located within the U.K.8 Generally, if an overseas entity has established a place of business for global trade in the U.K., it must register a U.K. establishment. Such companies must provide information including the name of the company; the country of incorporation; the U.K. and overseas addresses; details about the company directors and secretaries, including the extent of their authority to represent the business; details about people authorized to accept service of process on behalf of the company; details about the permanent representatives of the company in the U.K. and the extent of their authority to represent the business; and a certified copy of the company’s constitutional documents (translated if they are not in English).9

2. Private Limited Company

A private limited company, the most common form of trading entity in the U.K., is a separate legal entity with its own assets and limited liabilities. A private limited company can have one or more shareholders.

Private limited companies in the U.K. must comply with U.K. accounting, auditing and regulatory requirements. These include filing an annual return with the Registrar of Companies, filing statutory accounts for the company for each financial year/period, and notifying the Registrar of Companies of changes to the company (such as resignation or appointment of directors, change in share capital and change in registered office address). Private limited companies must also maintain statutory registers for the company in the U.K.10

3. Limited Liability Partnership

There are several key differences between a limited company and a limited liability partnership. Most notably, an LLP is governed by its own unique and private agreement, which may be amended at any time; is owned by its members through their capital shares; may have profit-sharing members who have no capital share in the LLP; and is transparent for direct tax purposes. Tax is assessed on LLP members individually rather than on the LLP entity.

Members of LLPs can include an individual, a company or another LLP. There is no limit to the number of members an LLP can have. Upon membership, members must provide information including name, residential address and date of birth.11

Cultural Considerations for International Trade in the U.K.

For U.S. businesses conducting global trade in the U.K., one of the draws of opening a foreign office is the many similarities between the two nations. However, there are also many differences, and it’s important for companies to understand, acknowledge and respect them.

For example, even though English is the official language of the U.K., there are many different British accents and dialects that can shade or change the meaning of the spoken word (as Americans typically understand it). It is perfectly acceptable – and advisable – to ask for an explanation of anything you do not understand.12

People in the United Kingdom typically see themselves as well-mannered and well-educated. They are generally understated, cool and detached, and class plays a big role for many people. During meetings, the British tend to be more formal than Americans. However, organizational hierarchies are flattening, and people in Britain usually address each other in day-to-day communications using their first names. Of course, this depends on the culture of individual organizations and specific situations where a certain naming etiquette must be observed.

In general, the British value punctuality, with time being valued as an economic resource.13

When it comes to business dress codes, classical conservative attire is the norm for both men and women. It is common for women to wear either trousers or a skirt in an office environment, and head scarves are accepted as part of religious freedom.14

The Takeaway

U.S. companies seeking growth through global trade may find opportunity in the U.K. Understanding and meeting expectations on all internal trade and cultural fronts will help to ensure a profitable and positive relationship for both U.S. businesses and their U.K. colleagues.

The Author

Debra Donston-Miller

Debra Donston-Miller is a veteran journalist, specializing in IT, business, career and education content. Formerly editor of eWEEK magazine and content director of eWEEK Labs, Donston-Miller currently develops content and content strategy for multiple organizations.

Sources

1.“Top Trading Partners-April 2017,” United States Census Bureau; https://www.census.gov/foreign-trade/statistics/highlights/top/top1704yr.html
2.“Brexit: All You Need to Know about the UK Leaving the EU,” BBC,; http://www.bbc.com/news/uk-politics-32810887
3.Ibid.
4.“Doing Business: Measuring Business Regulations,” The World Bank; http://www.doingbusiness.org/rankings
5.“Doing Business in the U.K.,” Wolters Kluwer; https://ct.wolterskluwer.com/resource-center/guides/doing-business-uk
6.“Companies House,” Wikipedia; https://en.wikipedia.org/wiki/Companies_House
7.“Types of Legal Presence: UK,” PwC; http://www.pwc.co.uk/doing-business-in-the-uk/types-of-legal-presence.html
8.Ibid.
9.Ibid.
10.Ibid.
11.Ibid.
12.“Business Communication,” Passport to Trade 2.0; http://businessculture.org/northern-europe/uk-business-culture/business-communication/
13.“Business Etiquette,” Passport to Trade 2.0; http://businessculture.org/northern-europe/uk-business-culture/business-etiquette/
14.Ibid.

Make International Payments

Back to top