Opening a Subsidiary in the United Kingdom: Two Friends Expand Their Business to the UK

We have known each other and worked together for a long time. Our company has several representative offices in Europe. We decided to open an office in the UK. Victor had already had an unpleasant experience of establishing a company in the UK, so we decided to get the help of qualified advisors. We were recommended to contact Imperial & Legal. This proved to be the right choice.

Janos and Victor

Businessmen from Hungary

Clients’ names and photos have been changed

The United Kingdom is a perfect country for business development for several reasons: centuries-old entrepreneurial culture, a unique location at the intersection of trade routes from the Old and New Worlds, a strong economy and government support for small and medium-sized enterprises. On top of that, there is a huge sales market that attracts foreign companies in the first place.

Our Heroes

Two Hungarian entrepreneurs, Janos and Victor, are not new to business. They are CEOs and owners of the company that has been exporting various goods for many years. They started by exporting agricultural products and famous Tokay wines, later switching to automotive parts, electrical goods and medical products that were in greater demand on the vast European markets.

Janos and Victor have succeeded to sign several profitable distribution contracts with top Hungarian producing companies and are successfully developing sales offices in Germany, the Czech Republic, Slovakia, Austria, Romania, and Poland.

Goals

To develop their business further, the partners have decided to open a subsidiary in the UK. This was preceded by thorough preparation on their part:

1. Victor has already tried to open a subsidiary in the UK once but failed. He found an agent online and paid him in advance, after which the agent disappeared. Victor has learnt the lesson; this time, he and Janos have contacted professional legal advisors to avoid any delays or losses.
2. Victor and Janos have been reliable distributors in the EU and planned to open a UK subsidiary to market Hungarian goods there. They needed to choose an appropriate incorporation structure. Besides, they needed a corporate account in one of the British banks for transactions inside the country. They also needed to register for VAT voluntarily, before reaching a turnover threshold.
3. Victor and Janos have always respected laws regulating business practices and abided by them all the time. They have adopted the same approach to their foreign subsidiaries in the EU: they have always meticulously done their bookkeeping and accounting and submitted annual reports on time. The same should apply to their British subsidiary, though initially when they first entered the British market, our heroes needed some help with accounting as well as tax and financial reporting.

Solution

When Janos and Victor contacted Imperial & Legal, our advisors offered them the Imperial incorporation package that ideally suited their needs.

What are incorporation packages for? Based on the years-long experience with starting British entrepreneurs, Imperial & Legal advisors have developed three incorporation packages for company registration – Standard, Standard Plus and Imperial.

The Standard package, as the name suggests, is aimed to resolve basic issues. It suits entrepreneurs who open a dormant company and who have enough experience to further deal with the British authorities but lack knowledge about registering a UK company.

The Standard Plus package is perfect for British companies that operate outside the UK.

The Imperial package includes all Standard Plus package services plus additional services. It is ideal for foreign companies that plan to be active within the UK.

Imperial & Legal advisors helped Janos and Victor prepare all the incorporation documents quickly, and, 24 hours after signing the papers, a UK subsidiary was registered. It was a limited liability company (Ltd), the most suitable incorporation structure for them. The whole process took less than three days.

Not to be distracted by calls and emails, our heroes used the Imperial & Legal secretary who processed all the incoming calls and emails and sent detailed reports to Victor and Janos.

It was a bit more complicated to open a corporate bank account in the UK. Though British retail banks are very reliable and client-friendly, they are reluctant to sign contracts with foreign residents, especially if they come from Eastern Europe. Nevertheless, our specialists successfully resolved that issue as well. It was possible thanks to the clients’ clean reputation and the business address that our experts got for a new subsidiary in its dealings with financial institutions.

Though the subsidiary had just started operating and had not reached the minimum turnover of £85,000, it was decided to register for VAT on a voluntary basis.

Victor fulfilled his dream. He became a sole representative of a subsidiary and relocated to the UK. Imperial & Legal immigration advisors knew from the very beginning that one of the clients was going to stay in the UK, so they worked on the case keeping that fact in mind. It was not just about registering a UK subsidiary, but also organising relocation for one of the clients. They helped Victor obtain a Sole Representative visa so that he could manage the UK subsidiary.

Victor faced organisational challenges from time to time, but since they had the Imperial package, he stayed in touch with our advisors and contacted them on business and tax optimisation issues. Imperial & Legal help was not limited by the package services only. With our support, the Hungarian entrepreneurs found and rented a spacious office and warehousing facilities on the outskirts of London, set up accounting, helped to hire qualified staff and successfully submitted financial accounts and a tax report.

Conclusion

Janos and Victor have applied for Imperial & Legal legal support to focus their efforts on their main goal – entering a new market and competing for their share of it. As a result, their new UK subsidiary has started promoting goods and developing a client base immediately after registration.

The annual turnover of the subsidiary has already exceeded £1,000,000. Following the scheme developed for him by our immigration advisors, Victor and his family will be able to apply for an Indefinite Leave to Remain in a few years and then get British citizenship.