Investing Climatefor Overseas Companies

in the UK

Why international businesses locate to the UK?

http://goo.gl/IsFoMK

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Economic Context

• Gross Domestic Product (GDP) increased by 0.7% in Q4 2013 compared with Q3 2013. Compared with the same quarter a year ago, Q4 2012, GDP was 2.8% higher in Q4 2013.

• The unemployment rate for November 2013 to January 2014 was 7.2%, down 0.2 percentage points from August to October 2013. There were 2.33 million unemployed people, down 63,000 from August to October 2013.

• Annual inflation, using the Consumer Prices Inflation measure, was estimated to be 1.9% in the year to January 2014 down from 2.0% in December 2013. In December 2013, inflation hit the Bank of England’s target rate of 2.0% for the first time in 4 years.

• Retail Sales estimates for January 2014 increased by 4.3% compared to the same period the previous year. Compared to the previous month, retail sales declined by 1.5% in January 2014.

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Registering a business in the UK

If you’re expanding your business to the UK and want to carry out business from an address in the here, you must register your business with Companies House.

http://www.companieshouse.gov.uk/

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Choose a legal structure

• Choose a legal structure for your business

• If you want to form a new limited company in the UK, you need to register with Companies House. This costs £20 and takes about 24 hours.

• ewf.companieshouse.gov.uk

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Financial support

• Businesses can take advantage of different grants and tax allowances in the UK. These provide financial help and assistance for research and development work and investment in business.

• www.startuploans.co.uk

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UK Regional Growth Funding

• The Regional Growth Fund supports projects and programmes that are using private sector investment to create economic growth and jobs in different areas of the UK.

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Start-up loans

• The British Business Bank offers start-up loans for businesses that are less than 12 months old.

• The scheme helps entrepreneurs who can’t access funding from banks, but whose business ideas are still capable of success.

• http://british-business-bank.co.uk/

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Tax in the UK - Corporation tax

• The UK government is lowering the rate of corporation tax to 20% in 2015. It will be the joint lowest in the G20.

• The current rate of corporation tax is 21%.• The UK has double taxation agreements through

tax treaties with other countries. This means that the majority of UK based companies benefit from an exemption from corporation tax on any foreign dividends that they receive.

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Tax in the UK - Indirect taxation

• Value Added Tax (VAT) is payable on most goods and services supplied in the UK.

• Goods imported or purchased may also have VAT.• A company has to charge VAT when their taxable

turnover is, or is expected to be above a certain threshold.

standard - 20 per cent

reduced - 5 per cent

zero - 0 per cent.

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Research and Development(R&D) Tax Credits

• Tax credits are available for companies investing in R&D. This means that companies pay a lower rate of corporation tax.

• Companies are normally entitled to a 100% deduction of corporation tax on work related to R&D.

• Alternatively, if your company or organisation is small or medium-sized, you may be able to choose to receive a tax credit instead, by way of a cash sum paid by HM Revenue & Customs (HMRC).

• But your company or organisation can only claim R&D Relief if it's liable for CT.

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Tax in the UK - Indirect taxation

• You can find on website who can apply for R&D Relief and what conditions an R&D project must meet to qualify. It also explains what costs you can claim for, how you claim, and whether you can get tax relief, or tax credits paid back to you.

• SMEs are entitled to a further deduction from their taxable income of 125% of their current spending on qualifying R&D

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Trademark

• A trademark is a sign that can distinguish the goods and services of one business from another business. Trademarks can be: words, logos, pictures, sounds.

• There are 45 types (class) of business activity in the UK under which a trademark can be registered.

• Registering a trademark costs:

- £170 if done online

- £200 for a paper application

- an additional £50 is payable for each additional type of business activity added to an application.

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Copyright

• No registration is required for copyright in the UK. An item has automatic copyright when it’s written down or recorded. This covers: art, broadcasts, computer programmes, databases, films, literature, music, photography, technical drawings, websites.

• Your copyright work will be automatically protected abroad in the same way it’s protected in the UK.

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Locations

• Commercial and industrial premises are available in most areas of the UK to rent or purchase.

• Enterprise zones are different locations across the UK that offer investors incentives to locate themselves there. Incentives include: reduced taxes, simpler planning rules, financial benefits.

• Many Enterprise Zones have employment clusters, where businesses from the same sector are located in the same zones.Examples – go to Appendix 1

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Help from UKTI

• UKTI support for companies wanting to locate to the UK• UK Trade & Investment is the UK national government

department that offers free support and independent advice to overseas companies looking to invest or locate in the UK.

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Help from UKTI

UKTI provides a number of services to overseas companies. These include:

1. Accessing market opportunities

Help international companies quantify and assess market opportunities in the UK and Europe

2. Access and introductions to the right people

Work with every UK Government Department to support business access to a vast network of industry experts and local partners

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Help from UKTI

3. Setting up in the UK

Provide guidance on set up procedures, including registering a company, corporate structure and opening a bank account

4. Bespoke market research

Compile in-depth factual reports tailored to your needs, including market entry support, research and development collaborations and cost analysis

5. Helping select the best market location

Provide practical help with site selection through visits to locations and premises and has regional experts on hand to offer advice

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Help from UKTI

6. Tax advice

Provides information about the UK tax system, incentives and administrative processes.

7. Ongoing Government support

Continued support after your business is established in the UK, providing assistance on expansion and representing your interests in government

8. Support with applying for visas and entry to the UK

Provide practical support and advice on the UK immigration system, how it works and the different visa categories

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Help from UKTI

9. Finding top quality staff

Guidance on staff recruitment and locating the required skills base

10. Tailored assistance for entrepreneurs

Assistance to entrepreneurs through a network of mentors with the insight and experience to help make a commercial success of early stage companies

UKTI Investment Services Team

Email: enquiries@ukti-invest.com

Telephone +44 (0)20 7333 5442

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Appendix 1: Locations ICT Zones in the UK - Local Enterprise Partnerships

• Buckinghamshire Thames Valley Local Enterprise Partnership

• Buckinghamshire is located just outside London, within easy reach of the comprehensive ICT cluster in the west of the capital.

• Cornwall and the Isles of Scilly Local Enterprise Partnership

• A strong military presence and mining heritage means that Cornwall has had a dedicated engineering base for generations.

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• Greater Birmingham & Solihull Local Enterprise Partnership

• Birmingham is an ideal hub - software companies already based there include Codemasters, Sega and Blitz Games.

• Enterprise M3 Local Enterprise Partnership

• There are close to 10,000 ICT, Software and Digital Media businesses in the Enterprise M3 Local Enterprise Partnership

Appendix 1: Locations ICT Zones in the UK - Local Enterprise Partnerships

• South East Local Enterprise Partnership - INVEST Essex

• Home to a skilled labour pool, with close proximity to the existing Tech City cluster

• Greater Cambridge Greater Peterborough Local Enterprise Partnership

• The Cambridge area is home to several key computer chip manufacturers

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• Coventry and Warwickshire Local Enterprise Partnership

• A leading region for digital media and development of communications tools and software applications

• West of England Local Enterprise Partnership

• Home to the largest cluster of silicon chip designers outside of California, the area is home to over 200 companies and 5,000 highly skilled engineers

Appendix 1: Locations ICT Zones in the UK - Local Enterprise Partnerships

• Swindon & Wiltshire Local Enterprise Partnership

• ICT is a rapidly developing sector in the Swindon & Wiltshire area, playing a leading role in UK connectivity and broadband

• South East Midlands Local Enterprise Partnership (SEMLEP)

• The area is the proud home of several multi-national high technology companies, including UK and European headquarters

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• South East Local Enterprise Partnership - Locate East Sussex

• There is a strong computing and communications cluster in the region, with a well-educated and technologically literate workforce

• Thames Valley Berkshire Local Enterprise Partnership

• Over 60,000 people working in IT services; more than four times the UK average

Appendix 1: Locations ICT Zones in the UK - Local Enterprise Partnerships

• Hertfordshire Local Enterprise Partnership

• A number of leading ICT and telecoms companies are headquartered in the region including Everything Everywhere

• Manchester City Region Local Enterprise Partnership

• The birthplace of the computer, Manchester is the info tech capital for hardware, software and IT services

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Appendix 1: Locations ICT Zones in the UK - Enterprise Zones

• Aerohub @ Newquay Cornwall Airport

• Access to the Superfast Cornwall broadband project, makes Newquay of the best connected places in the world

• Birmingham City Centre Enterprise Zone

• The UK hub for games and interactive media, employing over 53,000, and a suite of digital support services

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• Alconbury Enterprise Campus

• A business incubator welcomes small high-technology startups

• Bristol Temple Quarter Enterprise Zone

• Established cluster of silicon design companies including Broadcom, Gnodal, Infineon, Nvidia and Zuken

Appendix 1: Locations ICT Zones in the UK - Enterprise Zones

• Science Vale Oxford Enterprise Zone

• Particular strengths in big data, with large amounts of CERN and space data downloaded and managed

• Sci-Tech Daresbury Enterprise Zone

• Strategic partnerships with blue chip companies and institutions such as the Institute for Engineering and Technology

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• MIRA Technology Park Enterprise Zone

• Existing tenants include Vocis, providing advanced automotive software solutions and supporting the established automotive industry

Appendix 1: Locations East London Tech City

• East London Tech City (also known as Tech City or Silicon Roundabout) is a technology cluster located in Central and East London, United Kingdom.

• It broadly occupies the part of London's East End between Old Street (the boundary of Central and East London) and the Queen Elizabeth Olympic Park in Stratford, with its locus in the Shoreditch area.

• It is the third-largest technology startup cluster in the world after San Francisco and New York City.

• Development of the cluster has been encouraged by both local and national government, with the goal of creating a cluster comparable to Silicon Valley in the United States. Cisco, Facebook, Google, Intel and McKinsey & Company are among the companies that have invested in the area.

• City University London, Imperial College London, Loughborough University and University College London are academic partners in projects based in the cluster.

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