The United Kingdom (UK), with a population of 67 million people and a GDP of $3.1 trillion (2022), is a major international trading power. The UK is Canada’s second largest services trading partner in the world, after the US.
If you’re an entrepreneur who is already successfully selling to the Canadian and US markets, you may want to consider exporting to the UK market next. In this blog, we cover some initial considerations when expanding your business to the UK! When considering exporting to the UK it is also important to do some research on Brexit and ways in which it could impact potential export and trade regulations.
1. What is the UK entrepreneurial ecosystem like?
London is the largest tech ecosystem in Europe, home to over 180 incubators and accelerators as well as 269,700 tech engineers, which is the highest number of any European city. London remained Europe’s leading hub for tech investment, attracting £19.8 billion in VC investment in 2022.
2. Corporate Structure, Legal, and Regulations
If you carry on part of your business in the UK or have an employee in the UK making sales you are likely to need to set up a UK entity. The registration process is relatively simple and can be done in less than 24 hours! Oury Clark has put together a “Setting up in the UK Business Structures” resource to help you with this process. You’ll also need to consider any local regulations, trademarks or IP protection, and visa requirements. To learn more about visa requirements for yourself and your business, check out this guide for getting a UK visa from Oury Clark.
3. Funding, Banking, and Financial Implications
You’ll need to set up an international banking account, plan for currency exchanges, and, understand the different tax rates in the UK. Three key tax rates to consider are corporate tax (19-25%) depending on your business profit levels, VAT (normally 20%, equivalent to sales tax), and employment tax (13.8%). To learn more about VATs and taxes, check out this introduction to VAT resource from Oury Clark . The UK is also a very investor friendly market. They provide many incentives and tax relief to encourage investment into startups. Three great initiatives are EIS (Enterprise Investment Scheme), SEIS (Seed Enterprise Investment Scheme), and VCT (Venture Capital Trusts). Learn more with Oury Clark’s Tax Efficient Investments Guide.
London is one of the strongest talent pools in the world, and the average salaries are lower and cheaper than paying Canadian staff. It may be beneficial to hire local employees who can support your growth, especially when it comes to sales staff. These local individuals will already have the right contacts and networks rather than moving an employee from Canada to the UK.
5. Cultural Differences & Landscape Review
When expanding your products to the UK, it’ll be important to consider any language or cultural differences, as well as any local competitors that may not exist in Canada. It’s important to do a comprehensive landscape review to understand the key industry players in your space.
When exporting to the UK, there are many key factors to consider. As an introduction, check out the recording of our recent webinar, International Activation – UK, in partnership with Oury Clark. In this webinar, we cover many of the key factors mentioned above and more, to understand how to best begin exporting to the UK.
Do you have any other questions about starting your export journey to the UK? Reach out to email@example.com for more details.