Top reasons to invest in the UK
According to the World Bank’s “Doing Business Guide 2020”, the UK ranked number 8 globally for the ease of doing business. In May, the Qatar government pledged to invest £10bn in the UK, a move that has been welcomed by the British government as a ‘vote of confidence’ in the country’s infrastructure and business environment. Despite a turbulent time for businesses around the world following the pandemic, it’s clear that inward investment into the UK isn’t going anywhere. What’s more, with the Commonwealth Games shining a spotlight on the UK this summer, many investors will be considering whether the UK could be the next step in their investment plan.
HW Fisher’s Tax team outline some of the reasons why the UK represents an attractive option for businesses looking to expand, and the tax incentives and benefits that overseas investors can take advantage of.
English is the world’s most widely spoken language – approximately 1.5 billion people globally speak English, according to the World Economic Forum (WEF) – this is a great starting point for those wishing to do business in the UK. Add in the helpful time-zone – it is widely recognised that part of London’s competitive advantage in financial services is derived from its timezone. Doing business in the UK means access to a potential market of more than 60 million people, and the opportunity to benefit from a range of programmes that help businesses (of every size) to grow and thrive.
The UK has one of the lowest corporation tax rates in the G20 and is highly competitive within Europe – this currently stands at 19%. Whilst the Government has announced that the corporation tax rate is to increase to 25% from 1 April 2023 – which would still be competitive with the Eurozone – there are increasingly suggestions from politicians that the rate increase may be cancelled. Combined with the UK’s legal system and lack of regulatory red tape, this contributes to a favourable business environment for investors looking for target countries.
The UK tax system is clear and applied consistently – all companies resident in the UK must pay corporation tax on profits. Whereas, if you are a company based overseas with a UK branch or office, you must pay corporation tax on profits that have arisen in the UK.
The UK Government acknowledges that innovation is a vital pillar in the strategy for improving the UK’s productivity and performance. As a result, investment in Research and Development (R&D) incentives for both small and medium size enterprises (SMEs) continue to be enhanced – pushing greater rewards for innovation in the UK. In April this year, the UK Government set out its plan to make the UK a global hub for crypto technology and investment, including proposed legislation to bring stablecoins under payments regulation, and research and infrastructure programmes to encourage the development of the market in the UK.
The UK offers attractive venture capital schemes to help small and medium enterprises expand. For example, the Enterprise Investment Scheme and the Venture Capital Trusts offer tax relief for individuals interested in investing in small UK businesses.
As a leading accountancy firm who has specialised in helping successful investors to become established in the UK for over 100 years, we would be happy to discuss your personal circumstances in more detail – please get in touch.