For many Turkey-based businesses looking to open branches abroad, the UK is often a top choice. However, companies wishing to open branches in the UK must meet a large number of conditions. So, what’s the easiest path for entrepreneurs aiming to operate in the UK? Instead of opening a branch in the UK, what alternative can be chosen?
What are the Advantages of Doing Business in the UK?
The greatest advantage of conducting business in the UK is its prime location and economic stability within Europe. Moreover, individuals who set up companies in the UK can obtain an indefinite residence permit if they generate sufficient profits. Privileges such as the UK’s corporate tax rate of 19%, and reciprocal tax agreements with various European countries, make doing business in the UK beneficial.
What Needs to be Done to Open a Branch in the UK?
A Turkey-based company looking to open a branch in the UK must meet a number of conditions. If you fulfill these conditions offered by the UK for opening a branch, you can open your branch and start your commercial activities. Firstly, you need to register with Companies House, the UK’s chamber of commerce. After opening a branch, companies registered with Companies House must submit the following documents within 1 month:
- BR1 form,
- The original contract of the parent company located in Turkey and its translated version by a sworn translator,
- 691 form detailing the profit-loss and balance data for the company’s last 1-year period.
What are the Visa Requirements to Open a Branch in the UK?
An employee assigned by a Turkey-based company to go to the UK branch needs to apply for the following visa type.
Investor Visa: The general conditions of this visa require spending at least 183 days a year in the UK and the option to recover your capital. To get this visa, you should make a capital entry of at least £2,000,000 into the UK.
Any applications made with visa types such as tourist or student visas to establish a company or open a branch in the UK are against the country’s laws. The only exception in terms of visas could be in the case of a delay in the results of the company employee’s investor visa application. In case of an extended period, it is possible to perform certain commercial activities such as opening a branch, finding and renting an office in the UK with short-term visas obtained during the waiting period.
Is There a Capital Requirement to Establish a Business in the UK?
There is no minimum capital or required number of employees for a Turkey-based company to start a business in the UK. Such a company is responsible for the profit or loss resulting from its commercial activities in the UK. The Turkey-based company declares its foreign earnings as corporate income in Turkey. The period in which the earnings will be included in the corporate income is the date on which the accounting period is closed according to UK legislation.
Government Aids Provided by the Ministry of Foreign Trade to Open a Branch in the UK
Exporters residing in Turkey can benefit from the aids provided under announcements 2010/6 and 2006/4 if they want to open a branch, store, warehouse or office abroad. The easiest way to benefit from these incentives offered by the Ministry of Foreign Trade is to establish another company in the UK that has an organic link with a company established in Turkey.
What Types of Taxes are Entrepreneurs Responsible for When Setting Up a Business in the UK?
Gaining prior knowledge about the country’s tax system is crucial when deciding to open a branch or establish a company in the UK. If you want to own a commercial enterprise in the UK or open a branch connected to an existing business, you especially need to know about the corporation tax. The corporation tax is a type of taxation calculated on the net profit left after salaries and other business expenses are deducted from the income of limited companies.
Corporation tax is calculated, declared, and paid within 9 months from the end of the relevant business’s fiscal year. The payment can be made via a card on the UK’s finance website, or it can be transferred directly to a bank account. Apart from these, there are alternative options such as payment by phone and automatic payment.