All companies are dormant immediately after incorporation. Companies change from being dormant to become active, when there are ‘significant accounting transactions’ during the accounting period – beginning, for example, from the first interest received or payment made for a trading transaction.
A huge range of activities can operate from companies however two clear distinctions can be made between:
- Business operations for profit — involving trading (buying and selling only) adding value (by manufacturing or processing) or providing services
- Investment — involving the use of capital to secure a return.
Companies in Business operations
Our clients already know what is required to be in business. However extending that business to another country needs careful consideration.
Most business operations involve buying and selling. A new UK company might only be required by an established international client for sales within the UK of goods supplied from another country. A new UK company might also be required as a channel for products purchased from another country to be sold to the UK and a wider market in Europe. Such operations could lead to the UK company acting as a “middle man” in the core business. There might be a requirement for a new UK company to only provide a UK face to an expanding international business.
International clients might have a variety of thoughts about the scale and nature of the business to be carried out by a new UK company. The first step is to understand what basics are needed to operate a company in the UK.
The next step is to determine how much of a physical presence in the UK is required to operate an international business. That can represent a significant level of investment. We advise our clients towards a minimum.
What is required for business operations in the UK?
A UK presence requires many components covering physical assets and people, systems and financial support. The extent to which an UK operation is complete is directly related to the investment required.
A “token” presence may be all that is needed. A “full” presence requires much more investment.
However we believe that any assessment of what is required in the UK must consider what is already available from the whole international business. In a modern world of communications colleagues can work together in business operations but be seated many thousands of miles apart.
Valetime group have experience of supporting many types of business in the UK that work within an international structure for clients. Our aim is to minimise the investment required for an UK presence.
Do you actually need a UK company for trading?
We also advise clients to consider all other options for a UK presence. Of these the use of agency arrangements can often offer a least cost and safer entry to the UK.
Do you have the resources to operate a UK company?
For many clients the absence of UK resources leaves them with an immediate choice between investment in operational support or an alternative. Business Process Outsourcing (BPO) provides that alternative or at least a foundation for the development of a new UK company.
As an alternative to your investment in people and infrastructure, to avoid distraction from your core business interests, and to enhance your image of operating from the UK, we can currently provide support based on the concept of business process outsourcing.
Do you have the resources to develop your UK company?
Business development comprises a number of tasks and processes generally aiming at developing and implementing growth opportunities for a business. The term development equates to change, improvement, growth, re-direction or simply being a response to a perceived opportunity or event that could affect the business. In the context of the latter the expanded international nature of our clients operations, as in the purchase of a UK company, are often the catalyst for such development.
Companies involved in Investment
A company involved in investment is a company with a distinct purpose and often clarity can be brought by simply adding key words in the company name. For example an “investment fund” or a “development fund” has a clear and declared purpose.
A fund is defined as a collective investment scheme that pools money (to provide funds) for investment. That money can come from a client’s resources or others that seek to share investment opportunities.
Advantages can flow from using a company titled as an investment fund because, for example, some countries give protection to “inward investors”.
Taking the example of a client’s home country, an inward investor is a foreign registered company that makes an investment into business in the home country. Such investment can cover many things. The home country encourages such inward investment and can often offer special terms to both encourage and reassure protection for the investor. Emerging economies do this. If they are members of the World Trade Organisation or aspire to membership of other economic or trading groups they may be required to offer such support to inward investors.
Similarly some countries offer special arrangements for investment made to local business from foreign companies. These are to ensure the free movement of interest payments on loans and returns on investment to foreign companies. Often these measures are included in tax treaties. The home country recipient may have local tax advantages available to it.
What is required for an English face to investment?
We mention elsewhere the benefits of an English face to business. However for investment operations an UK image of well founded probity is perhaps the key requirement.