By ASHLEY E. ORGAN, Assistant Editor Growing your business internationally can keep you ahead of your competition and visible across the globe. When looking to expand your business from the US abroad, consider starting in the UK. On Oct. 27, 2010, at Rice University in Houston, UK Trade & Investment (UKTI), the commercial arm for the British government that promotes trade between the two nations, held a seminar to discuss the benefits of bringing US business to the UK. In addition to speaking the same language, companies from the US are drawn to the UK because of its market strength, similarities in corporate financial and legal structures, and relationships with countries worldwide. According to Nilesh Shah, partner and head of tax for Blick Rothenberg Chartered Accountants, business in the UK has not slowed despite the recent downturn. He suggests that US companies look to expand internationally in a tough domestic market. From a financial perspective, Shah said the UK has a desire to “tackle the big black hole” in the national budget. The government has a plan for the next four to five years to forecast the fiscal environment which would benefit US companies when planning to expand abroad. Shah said the UK also offers: • Expenditure cuts in the private sector; • Easy transition into the marketplace; • One of the lowest corporate tax rates in Europe; • Flexible system of tax for expatriates; and • Well-developed double tax treaties. According to Mark Barron, partner at Taylor Wessing International Law Firm, UK laws are similar to US laws, making the transition overseas an easy endeavor. When reviewing contracts and business models, US companies can easily understand the terms and conditions without spending valuable time and money on legal services. Chris Jeffrey, another partner at the firm, said a company will need a UK lawyer to advise on local differences and liability limitations. Barron said there is a difference between doing business with the UK and doing business in the UK and suggests creating a subsidiary as the best route to take versus opening a branch, which is a “more tentative step.” Local businesses prefer working with a limited company in the UK instead of dealing with an “Inc.” in the US. Employment is one legal issue of concern for US companies. According to Barron, an employer must present an offer letter/contract outlining the terms and conditions to protect the company. In addition, there is confidentiality protection (it is not standard practice to do background checks on potential employees) and post-termination restrictions (non-compliant companies can be fined US $106,000 or £66,000 per unfair dismissal). Immigration, consultancy, and incentive laws also should be reviewed before expanding to the UK. With the help of UKTI, US companies can use the UK as a launching pad to worldwide expansion. Transition into the UK can be a way to ease into the global marketplace without great risk, and UKTI’s presence in 96 countries in places such as Europe, the Middle East, and Asia can aid further business development. For additional information, visit www.uktradeinvest.gov.uk.
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