We realised that setting up a subsidiary abroad meant new business regulations that we would not know well. Obviously, we wanted professional support to avoid any issues. The financial side was also a tentative topic for us since we were a young company and could not afford large expenses. I decided to contact Imperial & Legal, and it paid off.
A company from Pakistan that once came for a consultation with our specialists at Imperial & Legal became one of our valuable clients.
TechSolutions is a young IT company with headquarters in Pakistan. Though it has been operating for only five years, it has already entered the international market and won its first foreign clients.
The company was founded by two creative young entrepreneurs — Hashim and Abdulaziz. They built a team of local developers and started their business in Pakistan. When all the processes were established and there was an aspiration to aim higher, Hashim and Abdulaziz began to look for clients outside the country that promised more profit and more challenging technical tasks. Abdulaziz was responsible for communication, and Hashim for operations.
With experience in several one-off projects and a few European clients in their portfolio, TechSolutions conducted market research to find long-term contracts abroad.
Abdulaziz had to travel for negotiations several times, and finally, luck was on his side. The company signed an agreement with a British chemical plant that produced polycarbonate, polypropylene, and other polymers. The plant needed several IT services — from the development of software for their equipment to deploying a centralised client program for the sales department. That meant a lot of work ahead since TechSolutions was expected not only to develop and set up all the required IT solutions but also to maintain and update them based on the users’ feedback.
It did not take long to understand that 100% remote involvement was not feasible. To effectively communicate with the client, successfully deploy the new software, and train the required staff how to use it, personal presence was required. Having discussed this, Hashim and Abdulaziz decided to set up a UK subsidiary.
The registration of the UK subsidiary went smoothly. Mohammed, chief technical officer in TechSolutions, became the head of the new UK company. With Imperial & Legal’s help, he obtained a UK Sole Representative visa that allowed him to stay in the United Kingdom and resolve all the arising issues onsite.
Hashim and Abdulaziz planned to come to the UK only when it was necessary and concentrate mainly on the development of their business as a whole. They ambitiously considered entering the US, EU, and Chinese markets. However, they needed to put their new UK subsidiary on track first. A new office was opened, staff was hired, and contact with the developers in Pakistan was established.
The administrative part still presented a problem. Since TechSolutions founders were foreigners, they were not aware of all the niceties of the UK taxation system and worried that they would unintentionally violate some rules and find themselves in debt or serious trouble. To avoid that scenario, they contacted Imperial & Legal’s specialists.
TechSolutions IT company with headquarters in Karachi (Pakistan) and the need to set up a new UK subsidiary.
To provide accounting services for a new UK subsidiary.
Imperial & Legal’s specialists prepared an action plan. First of all, the company had to be registered for PAYE and start reporting the employees’ salaries to the HMRC on a monthly basis. It was also required to be registered for VAT when the turnover was £85,000 or higher. However, it was hard to predict when exactly that happened. For that reason, we agreed that TechSolutions would pay us upon receipt of services instead of once a month. It helped our clients avoid additional financial burden.
We agreed that the company would do its bookkeeping itself and Imperial & Legal would prepare regular returns whenever required. At the end of each financial year, our specialists would also prepare annual accounts and a tax return for the company.
In six months, the company had a turnover that required VAT registration. Imperial & Legal helped TechSolutions get registered in three weeks.
We found an optimal solution for our client: we offered our services at minimum costs for the company while making sure it complied with HMRC requirements. We stipulated, however, that when the UK subsidiary expanded and onboarded new clients and partners, we would review the conditions of our agreement since the scope of work would significantly increase.
It is important to understand the British legislation and accounting rules to run a UK business successfully; this often becomes a challenge for foreign entrepreneurs. For this reason, it is recommended to contact professionals who will be able to assist in the matter.
You do not have to employ a staff accountant at the very beginning. You can outsource this work. Imperial & Legal’s experts will help you understand all the financial aspects of running a UK business and find the most appropriate form of cooperation that will suit your requirements.
We will work with you to find a customised solution for your immigration, second citizenship, business, tax and other needs.
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