How to Start a Business in the UK as a Foreigner

If you are a non-UK resident or overseas founder thinking about starting a business in the UK, you will have many questions. Can you open a bank? Can you legally run it? Can you start it without a UK address yet?

Back in 2021, it was estimated that 1.4% of the 2.5 million non-financial UK businesses were foreign-owned – a figure that had been increasing. By 2024, 11% of those who are self-employed in the UK identify as being from an ethnic minority. 

Despite Brexit, there are still many people looking to move to the UK for entrepreneurial reasons, be it London’s financial environment or the perceived business-friendly tax arrangements. 

Starting a UK Business as a Foreigner: The Main Scenarios

There is no single route, so before you register anything, you need to identify what kind of founder you are. 

Some things that will influence your legal obligations and tax position include:

• Your location
• Your visa status
• The role you plan to play in the business

The most common situations among foreign founders:

• Foreign entrepreneur relocating to the UK solely to run a business.
  
• Non-UK resident wanting to own a UK company but operate it from overseas. This could be an ecommerce store or holding a UK entity for investment opportunities.
  
• Foreigner living in the UK on a visa, such as working as a barbour and wanting to go self-employed or opening a small shop (salons, food businesses, off-licenses may all have their own licensing obligations).
  
• International student or recent graduate looking to start a small business or go freelance before their visa expires.
  
• EU, EEA (or Swiss) citizens who moved to the UK before Brexit, or sometimes after, and are concerned with their right to trade.
  
• Overseas company looking to test out the UK market, perhaps appointing a local agent or setting up a UK branch.

Taxes, visa, banking and registration requirements all change depending on the scenario. A useful starting point is the GOV.UK Set Up a Business guide.

UK terminology

Before you begin reading government pages and guides, you need to know the terms, because many are unique to the UK.

• Self-employed = working for yourself (not employed) and paying your own tax;
• Sole trader = the simplest structure, a self-employed person running a business as themselves (not a separate entity);
• Limited company = a separate legal entity registered at Companies House;
• National Insurance (NI) Number = Personal UK government number needed to register as self-employed (to then pay tax and access certain benefits);
• HMRC = responsible for tax collection and registering self-employment;
• Companies House = Registrar of UK-incorporated businesses.

Before making any formal moves, a market analysis of your business type and location is useful. Remember, it’s extremely common and well-received for ethnic minorities and foreigners to run businesses in the UK.

Around 19% of non-White people in the UK were early-stage entrepreneurs in 2023. 

Can a Foreigner Own a UK Business Without Living in the UK?

Without living in the UK, foreigners can own shares in a UK limited company, but cannot operate a sole trader business in practice as a NI number is needed to register. There is no nationality or residency requirement for company ownership under UK law – but it still comes with challenges.

Implications include:

• Proving your identity to Companies House requires mandatory ID verification.
  
• Opening a UK business bank account can sometimes (not always) be declined due to having no UK address or credit history.
  
• No official correspondence makes it tricky (no address).
  
• Contracts and payments can be complicated when dealing in other currencies.
  
• No UK phone number or postcode makes signing up to services harder.

Still, it’s very much possible if you’re prepared, mainly because it’s still legal. Because it’s common, there are formation agents and fintech accounts serving exactly your needs. Plus, the GOV.UK website is famously helpful for things like a registration guide.

Visa and Right-to-Work Questions Foreign Founders Must Check First

Immigration status is often what it all rests upon, mainly because most people want to live and work in the UK, not just own it from afar. 

Important: There is a legal difference between visiting the UK for business meetings and actually working in a UK business day to day.

Visa Route	Self-Employment / Running a Business
Innovator Founder	Permitted
Global Talent	Permitted
Graduate Visa	Generally permitted, company directorship requires attention
Skilled Worker	Not permitted
EU Settled Status	Permitted
EU Pre-Settled Status	Permitted
Standard Visitor Visa	Business meetings only, not day-to-day working

Within each of these, other requirements exist. For example, English language requirements for the Innovator Founder visa and an £1,357 application cost (when outside the UK). This and the Global Talent route are being reviewed, so keep an eye on changes.

While some visas restrict self-employment and company directorship. Sole traders will need to apply for a NI number.

Foreign Founder Types and What They Usually Need

There are a lot of combinations and scenarios, each can be unique and require your own research. But, here are the most common profiles.

Non-resident founder who is based abroad

You can own and direct a UK limited company without living here, but your challenges are no UK address, opening a bank account without credit history, and accepting payments. One solution to this is to use an FCA fintech provider (not a bank) like myPOS, which has multi-currency solutions and doesn’t require a credit history.

Person already in the UK on a visa

Focus on your visa conditions first and foremost, checking if it permits running a business. Consult an immigration advisor to ask these questions. Once confirmed, get an NI number before anything else - then apply to HMRC.

International graduate

Check if your visa allows self-employment before committing to anything. If it does, register with HMRC, and if your visa is close to expiring, factor in what happens to your business registration and contracts if your status changes. Research switching to an Innovator Founder visa as it requires endorsement (having a business plan that is approved by the appropriate body to be innovative and viable).

EU, EEA, or Swiss citizen

Pre-settled status holders also have full rights except a time-limited permission. Work on getting a Settled Status (living here for five years, among other requirements) as you then have full rights (but you can run any kind of business in the meantime). Simply share your status via a GOV.UK-generated code. 

Trade or service worker on a visa

This is extremely common, that people move to become self-employed builders, for example, or start a cafe. You must check your visa conditions (use an immigration advisor for help). It’s recommended to start as a sole trader, as you can always incorporate down the line (or not, if your visa doesn’t permit it).

Choosing the Best UK Business Structure as a Foreigner

This structure you run with has a lot of implications (liability, tax, etc), so the wrong choice could conflict with your visa. While this mostly comes down to your visa (of which there are many considerations, even down to what sector you’re in), here’s a general overview of structures.

Structure	Considerations for foreign founders
Sole trader	Without the right to work in the UK, foreigners cannot operate as a sole trader. No legal separation between you and the business. Extremely simple and fast registration (online).
Limited company	Separate legal entities. Requires UK-registered business address and more demanding filing with Companies House. The company pays Corporation Tax.
Partnership	Both partners share liability and both need the right to work in the UK if actively involved
Limited Liability Partnership LLP	Complex, combining elements of both limited company and partnerships, commonly mostly with professional services
UK establishment (overseas company)	When a foreign company opens a place of business in the UK (Companies House registration needed) but isn’t its own legal entity
UK subsidiary	A new UK limited company owned by an overseas parent, yet treated legally as its own UK entity

Limited companies are sometimes more attractive to foreign founders - not just for more personal legal protection, but it creates credibility with UK suppliers. It can help bring in investment and secure loans.

UK Address, Identity Checks, and Company Registration Requirements

The UK is a friendly environment for business registration, but it can still be demanding for foreigners.

When incorporating a limited company, Companies House wants to ID check all people with significant control (e.g., anyone with more than 25% of shares or voting rights). For these checks, every director and PSC must verify their identity through the GOV.UK directly or through an Authorised Corporate Service Provider (e.g., an accountant or formation agent). 

Difficulties for foreigners during checks include systems not recognising foreign passports and UK SMS security codes. The latter is easily fixed with a digital SIM, but an ACSP may help.

Some things you need for registration are: 

• A unique company name;
• UK registered office address;
• Personal details of all directors and PSCs (D.O.B, service address etc.);
• A Standard Industrial Classification (SIC) code describing your business activity; 
• Articles of association (governing rules of how the company is run);
• Registered email address for correspondence.

If you have no UK address, your options include:

• Using a registered office service;
• Forming agent;
• Accountant providing this.

Using a false address is an offence, so be careful in the provider you choose. Legal compliance can mean certified translation into English. Always start your documentation process a few weeks before jumping into the application.

Banking, Payments, and Accounting Challenges for Foreigners

Opening a UK business bank account can be daunting, especially with the notorious FCA and strict banking rules. You’re right to worry about traditional high street banks, these can be slow at onboarding, require in-person visits, and often want to see UK credit history. Avoid them if possible. 

Fortunately, the world-renowned FCA regulates fintech to keep a safe environment (still has KYC and AML checks) but without the strict banking regulations. For example, FCA-authorised Electronic Money Institutions, though they will not have FSCS deposit protection.

Regardless of your payment provider or bank, KYC and AML checks will always ask for:

• Proof of identity (your passport may be more reliable than local ID);
• Proof of address (e.g., utility bill or official document like visa correspondence);
• May be asked for a description of your business activity, expected transaction volume, and evidence of trading, like a website..

When applying as a company (not self-employed), like a limited company business credit card, you will also typically be asked:

• Company registration documents (certificate of incorporation and Companies House registration number); 
• Details of all directors and PSCs;
• A settlement account.

To speed up applications, make sure these documents are already prepared, especially when dealing with other directors and partners.

A business card from myPOS is one way to separate personal and business spending without credit checks.

Options for foreign founders who can’t open a bank account

Fortunately, a high street bank account isn’t a legal requirement. Fintech EMIs or e-money providers are often much more welcoming of foreigners. myPOS, for example, does not require a long UK credit history to open an account, and certainly doesn’t need an in-person visit.

UK businesses must have a way to accept payments. UK customers are increasingly not carrying cash. A card reader or POS is the easiest way to accept in-person payments, and contactless is now making up almost half of UK payments, so this is an expectation (often overlooked by foreigners coming from cash-forward societies).

myPOS provides foreign business owners with a free merchant account, and even a dedicated IBAN for multicurrency payments. This is perfect for entrepreneurs expanding to the UK but have customers from home. 

From a financial planning standpoint, myPOS account dashboard can export records, making it super easy to work with an accountant and remain compliant. Taxes are simple (and digital) in the UK when you have the right infrastructure. 

Cash made up just 9% of UK payments in 2024, down from 48% in 2014

UK Tax, Residency, VAT, and Cross-Border Money Issues

Unsurprisingly, you are responsible for registering with the appropriate authority, filing returns and paying what you owe. Just because a limited company has legal separation, a person must still be held accountable. 

Tax obligations to be aware of the following:

• Self Assessment is the UK’s system for reporting income and paying tax outside of employment. While this isn’t how limited companies pay tax (itself), company directors may well take dividends or be paid a share of profits, and the self-assessment would then be submitted annually.
  
• Corporation Tax is paid by UK limited companies on taxable profits. Currently 19% for most smaller companies, rising to 25% on profits over £250,000.
  
• VAT is for businesses with a taxable turnover of over £90,000 (in any rolling 12-month window). Overseas companies have no such threshold and need to register from their first UK taxable supply.
  
• Pay As You Earn (PAYE) is the way to deduct Income Tax and NI from employee wages. If you hire even just one worker, you must register as an employer to HMRC.
  
• National Insurance contributions are paid by both self-employed individuals and employers (different rates). The class you pay for depends on business structure and income.

Before committing to a bookkeeper, it’s worth finding an accountant with experience with international founders. The UK has double taxation agreements with over 130 countries - check the list of treaties to reduce risks of paying tax twice on the same income. Company structure can also sometimes shield against double taxation.

Tax registration should be within three months after you start trading (for limited companies) or by 5th of October following the end of the tax year you started in (self-employment). Keep hold of receipts, use a dedicated payment account (separate from personal finances), and uphold HMRC’s recommended best practices to reduce any compliance headaches down the line.

For example, myPOS transaction reports and the account records can give foreign founders an exportable record of GBP income - ideal for providing your accountant’s UK tax filings.

Licences, Insurance, and Regulated Activities for Foreign-Owned Businesses

The licences that you need will come down to sector, inventory and location (not your nationality). There are no licences that apply specifically to foreign-owned businesses but not locals.

The GOV.UK Business Licence Finder is your best starting point. 

Common licenses needed are:

• Alcohol selling license 
• Food business registration/food hygiene 
• Beauty treatment approvals
• Taxi and private hire (including ridesharing apps like Uber)
• Property management authorisation
• Financial services
• DBS background check

Many of these licenses are distributed and managed on a council level, so feel free to contact the council you plan to move to.

Business licensing can also often have requirements that foreign founders are unaware of in the planning phase. 

Some considerations include:

• Waste collection: Commercial waste isn’t collected like household rubbish. You need to arrange separate collection contracts with licenced carriers.
  
• Food hygiene: If you handle food, your local council will come to inspect the premise and give you a public hygiene rating. British customers do sometimes check these, and it can impact trust.
  
• Signage rules: External signs may need planning permission from the council.
  
• Tool storage: Cleaners, beauticians, and builders may have obligations about how they store their materials.

Insurance 

Insurance is important, but only Employers’ Liability is mandatory, legally speaking, and even then, only if you employ staff. 

Public Liability insurance is recommended to cover claims from customers should there be an injury relating to the business - like someone tripping over your welcome mat. 

Product liability insurance also protects against any harm caused by the goods you sell.

Nine out of ten UK food businesses hold a satisfactory hygiene rating or better.

Special Considerations for Foreigners Opening a Local Physical Business in the UK

The problem isn’t that foreigners are held to a different regulatory standard, but that they may not know the rules beforehand. 

There are, however, immigration checks baked into the local licenses (in some cases). For example, applying for an alcohol license to open a restaurant, some councils have Home Office Immigration Enforcement listed as a responsible authority that must be notified. So, make sure there are no holes in your status or situation.

One of the biggest discriminations is having no UK credit history, which will deny you access to many financial products. However, this can be solved by using fintechs like myPOS. Something to plan is that setting up commercial electricity or broadband may be tricky, as they often ask for a credit history. Some providers, though, will let this slide if you agree to a security deposit or set up a direct debit immediately. Otherwise, specialist providers may exist, and if you’re really struggling, Starlink/5G can be an alternative to broadband until you build a credit history.

Perhaps the biggest issue is a lack of access to credit. Banks are notorious for wanting a credit history, while there are some online alternative funding options. But ultimately, bootstrapping may be the realistic option for the time being, then, after building up a sales ledger, some alternative lenders will accept this as evidence of creditworthiness, especially with a structured merchant account like myPOS which is easily exported.

Step-by-Step: How to Start the Business After Choosing the Right Route

Here is a rough step-by-step guide to getting started.

• Step 1: Confirm your immigration status. Most important is whether your status or visa permits running a business (and what kind of structure).
  
• Step 2: Choose the right structure. Based on your residency, tax, liability preferences, and so on, register with HMRC and/or Companies House.
  
• Step 3: Collate UK address and identity documents. If you don’t yet have an address, solve this issue through an office service, forming agent, accountant etc. Use certified translations of documents if needed.
  
• Step 4: Register and open a business account. Onboarding with fintechs like myPOS can be super fast and do not require hard UK credit checks.
  
• Step 5: Check licenses, GDPR, council/sector obligations. Use the government license finder and don’t be afraid to ring a council from overseas to ask about licenses.
  
• Step 6: Set up payments and accounting. You can receive a myPOS card machine within a couple of business days, and with no monthly fees. Instant settlement can help your potential bootstrapping liquidity constraint.
  
• Step 7: Launch with UK-friendly pricing and T&Cs. Establish a refund policy, make sure you handle receipts, and focus on taking payments reliably from day one.
  
• Step 8: Track revenue and tax obligations. Adhere to guidance best practices from the start. A merchant account like myPOS and good expense tracking will go a long way to staying organised.

Conclusion

The UK is welcoming of entrepreneurs, both culturally and legally. Many do it. In fact, high streets around the country are full of foreign-run restaurants, barbers, convenience stores, and tradespeople, among other businesses. 

Most of your concerns will firstly center around your visa situation - after that, like a local, you just need to focus on licenses, compliance, and business structure. 

When in doubt, ring, for free, your immigration advisor and future local council to ask questions. 

Frequently Asked Questions

Can I start a UK business if I am in the UK on a visa?

It may be possible, but it depends on your visa type and any specific conditions (e.g., business structure).

Which UK visas allow me to be self-employed or run a company?

The Innovator Founder, Global Talent, High Potential Individual, and Graduate visas permit self-employment and running a UK business. EU citizens with a Settled Status have fully rights to open any business structure.

Can I register a limited company before my visa is approved?

Yes, Companies House allows anyone, of any nationality, to incorporate a UK company regardless of their visa. The caveats are: you must complete an identity check and it doesn’t mean you’re automatically given the right to work in it. Owning and running are not the same.

Can I run a UK business while on a Skilled Worker visa?

No, it’s not permitted to run a business in the UK under a Skilled Worker visa. Supplementary work of up to 20 hours is allowed (if aligned with your occupational code), but this is not as a business owner.

Can my UK business sponsor employees from overseas?

Yes but your business must first secure a valid Sponsor License from Home Office, then issue Certificates of Sponsorship.

Can I switch to an Innovator Founder visa from inside the UK?

Yes, so long as you have a valid UK visa and have secured formal endorsement of the business.