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Tom RedfernLLB (Hons)
Head of LegalFitzgerald & Law
Professional Advisory Services
Rachel Lockwood BSc (Hons), ACA, CTA
PartnerOury Clark
Chartered Accountants
GLOBAL READYInternational Growth Strategies for SMEs: The Legal Aspects of Setting up in the UK
January 25, 2012, Charlotte NC Session 1
Tom Redfern, Head of F&L Legal LLP
www.fitzgeraldandlaw.com
London San Francisco
Agenda
Incorporation
V
Permanent Establishment
Changes to UK Work Permits
UK Company Set Up
Permanent Establishment (PE):
No legal identity distinct from overseas parent
Unlimited liability
Parent is liable for debts which may be enforced against overseas assets
(subject to International Law)
Statutory audit is not a legal requirement, no annual return to
Companies House required
Limited Company:
Separate legal identity
Liability limited to the extent of the share capital (min. £1)
Can own property, sue and be sued, contract in its own right, liable for its
own debts
Statutory audit is a legal requirement if worldwide group
sales exceed £6.5m
UK Company Set Up
Permanent Establishment (PE):
Statutory accounts of the overseas parent, which owns the PE, must
be filed at Companies House
Permanent Representative
Their authority
May be perceived as being less committed to the UK market
Limited Company:
Statutory accounts of the UK Company (not the foreign parent) must be filed at Companies House
Directors and Company Secretary and Registered Office
Their authority
Usually perceived as portraying a better local image and profile
UK Company/PE Set UpAction Time Notes
Critical Register a PE
Incorporate a Ltd Company
2 – 4 wks
1 – 2 days
Nothing can proceed without
registration of PE / Ltd Company
Immediate
VAT registration
Bank account application
Register for Payroll
2 months +
1 month +
1 week +
Assume queries from HMRC
Salaries/deductions can be calculated/
paid in the interim
Required
Employment Contracts
Employer’s Liability
Insurance
Corporation Tax Registration
Within 8 weeks
1 week
Within 3
months
Deadline is a legal requirement
Legal requirement to have ELI
Within 3 months of starting first
accounting period, i.e. when trading
starts
Changes to UK Work Permits
Changes to UK Work PermitsFacts and Figures
Summer 2010: Govt aim to reduce net migration figure to <100,00 in its lifetime(reviewing all routes)
Warning: assumed the same numbers would carry on leaving ashave done before
1980s : 42,000 more people leave than arrive each year
To 1997: Govt aim to minimise immigration into the UK
1997 onwards: Policy changes contribute to rapid increase in migration
Until 1994: Paper records kept of foreign citizens arriving/leaving the UK
1998: Govt abolishes controls on checking visas on departure
2004: 250,000 net arrivals
2009: Net migration reached 196,000
2010: Net migration reached 252,000: highest calendar figure on record
2018: Britain's population will rise by 4m to 65.6m
www.fitzgeraldandlaw.com
London San Francisco
The Challenge Changes to UK Work Permits
The Challenge for the UK Government
Reduce net migration and protect economic growth
Build confidence in the immigration system
Select the brightest and best to work and study in the UK
Bear down on abuse (Tier 4: Students)
Less automatic settlement
www.fitzgeraldandlaw.com
London San Francisco
Types of Work PermitChanges to UK Work Permits
Sole Representative
Tier 1: Belongs to the
individual
Tier 2: Belongs to the
Company
www.fitzgeraldandlaw.com
London San Francisco
Sole RepresentativeChanges to UK Work Permits
Sole Representative (not points based)
• Can own up to 49% of the US and UK businesses
• Should hold a senior post
• Should be directly employed by the parent company
• 2 years initially, can be extended for a further 3
• Should not intend to carry out any other work
• Eligible for NHS healthcare (free)
• Can qualify for Indefinite Leave to Remain (ILR)
www.fitzgeraldandlaw.com
London San Francisco
Tier 1 VisaChanges to UK Work Permits
Tier 1 (points based)
Exceptional Talent
Investor Entrepreneur
www.fitzgeraldandlaw.com
London San Francisco
Tier 1 Investor VisaChanges to UK Work Permits
Tier 1 Investor (Points based)
• The purpose is to allow High Net Worth Individuals to make significant investment into the UK. It is not linked to employment in the UK.
• You must achieve a minimum number of points based on your ability to invest £1m
• Is valid for 3 years and can be extended by 2 years
• Investors of £5m will be allowed to settle in the UK after 3 years
• Those investing £10m can settle after 2 years
www.fitzgeraldandlaw.com
London San Francisco
Tier 1 Entrepreneur VisaChanges to UK Work Permits
Tier 1 Entrepreneur (points based)
• Allows you to set up/take over/ be actively involved in running a UK business
• Need to have at least £200k available or £50k from an approved 3rd party funder
• The money must be for spending in the UK
• Is valid for 3 years and can be extended by 2 years
www.fitzgeraldandlaw.com
London San Francisco
Tier 2 VisaChanges to UK Work Permits
Tier 2
Intra-CompanyTransfer
Sponsor Licence General
www.fitzgeraldandlaw.com
London San Francisco
Tier 2 Sponsor LicenceChanges to UK Work Permits
Tier 2 Sponsor Licence
• Sponsor licence for UK company required before a work permit for an employee can be applied for
• The process takes longer for new companies than established companies
• An Authorising Officer submits the application
• Beware of UK Border Agency audit/visit
www.fitzgeraldandlaw.com
London San Francisco
Tier 2 GeneralChanges to UK Work Permits
Tier 2 GeneralRestricted: - £20-150k pa salary
- Graduate Level
- RLMT
- Limit of 20,700 for 2011/12
- Settlement
Unrestricted: - Over £150k pa salary
- No limit on numbers
- Settlement
www.fitzgeraldandlaw.com
London San Francisco
Tier 2 Intra-Company TransferChanges to UK Work Permits
Tier 2 Intra-Company Transfer • Must have minimum of 1 year’s service
• Graduate Level
• Short-term staff – min salary £24-£39,999k pa
• Long-term staff – min salary £40k+ pa
• No settlement
The End
Thank you for listening
London Office8 Lincoln’s Inn Fields London WC2A 3BP
+44 20 7404 [email protected]
North America Office 388 Market Street, Suite 1300, San Francisco CA94111
+1 415 [email protected]
www.fitzgeralandlaw.com
Tom Redfern+44 20 7430 5886