Why you need to expand your business to the UK
If you’re thinking of international expansion for your business, setting up a home base in the United Kingdom could be an excellent move, but you have to be prepared.
Expanding your business overseas is a huge step. Not only are you setting up operations in an all-new area of the world, but you’re catering to an all-new customer base.
Dealing with logistics such as registering your business, following local business laws, hiring, and managing inventory can seem overwhelming.
Expanding to the UK could be a great revenue opportunity for your business. However, many business owners make mistakes in the process. Going in uninformed, at the wrong time, and without enough support or resources can turn potential success into quick failure.
But don’t let that scare you. Here’s why expanding your business to the UK is well worth it.
Few language and cultural barriers
For many expanding businesses, the US is the first stop when they decide to cross their borders. If this is the case for you and you’re successfully selling in the US already, the UK is a natural next step for expansion.
Why? Although the UK is an ocean away from the US, they have many cultural similarities — including language.
You’ll experience different dialects and accents, but both the US and UK speak English. This will make your expansion a lot easier than if you were to expand into China or South America, for instance.
The lack of language barriers will save you on translation and localization costs and assist with your smooth transition overseas.
Diverse talent pool
The UK is home to a diverse and talented workforce. Additionally, the country attracts global talent from beyond its shores.
For example, consider the following statistics from the Global City:
The UK is home to 2.3 million specialists in the professional services and financial sectors.
There are more qualified software developers and AI experts in London than any other European city.
London boasts one of the most skilled talent pools in the world, with 58.5% of its workforce educated to at least degree level.
The BCG Global Talent Survey ranked London as the most appealing location for global workers, meaning that the city is a hub for international talent.
All of this considered, the UK may be an excellent option for businesses looking to expand abroad.
A growing eCommerce market
As of last year, eCommerce accounted for almost 40% of the UK’s total retail market. eCommerce saw a big boom as a result of the coronavirus pandemic in 2020, and continues to see rapid growth throughout the country.
Is your business in the tech or finance industry? Even better. The UK is home to a booming fintech, SaaS, and B2B service industry that’s growing quickly. Other markets that are seeing a fast-track to success in the UK include gaming, healthcare, and cyber security.
This is good news for small businesses, who have a real shot at growth in a market like the UK’s. As Tom Potanski, EVP at DevsData LLC, puts it, "Things are not as complex as they might sound. Small companies still can move very quickly and outpace the bigger players in the market, especially if they target niche markets or something that is new or trending.”
Expanding to the UK is a surefire way to grow your customer base and get more eyes on your business.
Having a homebase in the UK can have some pretty appealing tax benefits.
Corporate tax is fairly low for the region at 19%. Once you understand things like the UK double taxation agreements and value-added taxation (VAT), it’s pretty straightforward.
Nevertheless, you may want to consider working with someone knowledgeable in local tax laws — at least at the beginning — to ensure everything gets off to a smooth start.
Freeports are areas exempt from custom duties, VAT, and other taxes. These areas are great for processing imports because they cost less, require fewer paperwork fees, and add value to products coming into the UK.
Freeports help businesses see significant cost savings, especially if moving products internationally. If you’re a business expanding to the UK, you’ll be able to take advantage of these customs-free zones to obtain your products by signing up on the GOV.UK site.
The eight UK freeports are located in the following areas:
East Midlands Freeport
Freeport East (Felixstowe and Harwich Ports)
Liverpool City Region
Thames Freeport (London Gateway and Port of Tilbury)
Airwallex: your resource for overseas expansion
Expanding to the UK can be intimidating — but your success in the UK may be the key to further expansion opportunities worldwide. With the right tools and Airwallex, you have the support you need.
“[Airwallex] is a really important tool that will help [businesses] with international expansion…Because of…quick transfers, [the] ability to receive funds from different markets locally…good exchange, and great personal contacts with [a] business account manager, this is a really good option I believe. And it's quick to set up and very intuitive to use and operate.”
-Tom Potanski, EVP, DevsData LLC
From virtual cards and low FX rates to international money transfers, foreign currency accounts, and more, Airwallex is your No. 1 resource for modern, global business support and border-free finances.
Sign up today to get started.
Related article: How to open a UK business account
Margaret runs partner marketing for Airwallex US, working with great companies across ecommerce, consumer goods, consulting, and tech to deliver excellent experiences to shared audiences.