The UK is Europe’s top inward investment location attracting 39% of all US investment. There are many reasons for our popularity with US investors of all sizes – and we certainly have a great deal to offer.

The UK greatly values the contribution to the economy that overseas-owned companies make. We understand the strategic drivers that affect international businesses and can offer the on-going support that will help investor companies thrive once they have located.

UK support network
Invest·UK is the agency promoting the whole of the UK as the first choice in Europe as an inward investment location. The agency works with its partners in the national and regional development agencies across the country to assist new and existing investors with all aspects of locating and expanding in the UK. This partnership delivers a country-wide network of support to help US companies maximise their investment in the UK and to achieve – and exceed – their business objectives.

What can Invest·UK offer?
Invest·UK can provide assistance in the key areas of:

Contacts:
• With national and local government
• With private sector companies
• With centres of research and development and academic
excellence (eg universities)

Regional support:
• Finding suppliers and customers (locally and nationally)
• Staff recruitment, training and retention
• Advice on financial, location and regulatory issues

For further information on relocating to the UK, visit the Invest·UK website at: www.Invest·UK.com

Entry requirements
An appropriate entry clearance, obtained before arrival, must be held by all non-European Economic Area (EEA) nationals entering the UK if they are:

• Representatives of overseas companies that have no branch, subsidiary or other representative in the UK
• Persons coming to establish themselves in business or self-employment

Full details are available from the UK Foreign Office. Visit its website at www.fco.gov.uk

Applying for Entry Clearance
An application for entry clearance must be made to a British Embassy, High Commission or Consulate-General abroad.

Visas
Visa nationals must obtain prior entry clearance to enter the UK as a business visitor. Non-visa nationals can seek entry as a business visitor from an immigration officer at a UK port of arrival. You can do business in the UK as a visitor or business visitor, either as a tourist or in connection with your work or business overseas.

You can:
• Go to meetings with UK businesses or negotiate
and enter into contracts with them
• Go to trade fairs, conferences, seminars and training
• Undertake fact-finding missions
• Come as an expert to talk to UK business people about overseas legal or administrative requirements they may need as exporters
• Enter as a representative of a foreign software company to install their product
• Enter as a visitor if you are a sports person or entertainer coming to the UK for a trial or audition, or for a personal appearance that does not involve a performance

You cannot:
• Do paid or unpaid work
• Produce goods or provide services in the UK
• Sell goods and services to members of the public

A non-visa national visitor would normally be granted leave to enter the UK for a maximum of six months on each visit. Visa nationals can apply for a standard visit visa, which is normally valid for six months and an unlimited number of entries to the UK during the validity of the visa. People who regularly visit the UK can apply for a multiple-entry visit visa that can be valid from one to 10 years.

Further information and visa application forms are available on the UK visas website: www.ukvisas.gov.uk

Work Permits
Any non-EEA national subject to immigration control who wishes to come to the UK to work must, with limited exceptions, have a work permit. This is currently issued free of charge by Work Permits (UK), of the Home Office Immigration and Nationality Directorate, and the Department of Employment and Learning in Northern Ireland. The length of time taken to process a work permit application depends on the nature of the application, but, as a general rule, employers should allow at least six to eight weeks. The application should be made by the UK employer and a permit obtained before the overseas national concerned arrives in the UK. If a person arrives in the UK without a work permit they will normally be refused entry.

For application forms, visit: www.workpermits.gov.uk

Highly Skilled Migrant Programme
Launched in 2002, the Highly Skilled Migrant Programme (HSMP) is designed to allow individuals with exceptional personal skills and experience to come to the UK to seek and take work. To make a successful application, individuals need to provide evidence that they can make a significant contribution to the UK economy. See the above website for more details.

Forming a company
It is simple to form a company in the UK and UK company law does not discriminate against foreign nationals. When an investor or company from abroad decides to set up a business in the UK several kinds of company arrangement are possible:
• Private company limited by shares – members’ liability is limited to the amount unpaid on shares they hold
• Private company limited by guarantee – members’ liability is limited to the amount they have agreed to contribute to the company’s assets if it is wound up
• Private unlimited company – there is no limit to the members’ liability
• Public limited company (plc) – the company’s shares are offered for sale to the general public and members’ liability is limited to the amount unpaid on shares held by them

For almost all business purposes the form used is the company limited by shares, either as a private limited company (Ltd) or as a public limited company (plc). Most foreign companies set up a private limited company. No consents are needed, no local shareholders or directors are required and no minimum capital rules apply. Certain documents (eg Memorandum and Articles) must be filed with Companies House in order to form the company. Specialist advice should be sought if forming joint ventures, branches or partnerships.

For more information, visit: www.companieshouse.gov.uk

Company taxation
Every UK-resident company pays corporation tax on its worldwide profits (adjusted for tax purposes), including capital gains on the disposal of assets.

A company is “UK resident” if it is incorporated in the UK or if its central management and control are in the UK. If the company pays tax abroad on any foreign income, it will still be liable to pay tax in the UK on the same income. However, the foreign tax paid can generally be credited against the company’s UK tax bill, so reducing the amount that has to be paid in the UK. For a single company, the rates of Corporation Tax are as follows:

• For companies up to £10,000 the tax rate is zero
• For companies with profits of £10,001 to £50,000, marginal relief eases the transition from the starting rate of zero to the small companies’ rate of 19%
• For companies with profits of £50,001 to £300,000 the tax rate is 19%
• For companies with profits of £300,001 to £1.5m, marginal relief eases the transition from the small rate of 19% to the main rate of 30%
• The main rate of 30% is paid by companies with profits of more than £1.5m

A foreign company with a branch in the UK pays corporation tax on the trading profits of the branch's activities in the UK. UK capital gains and investment income connected with the branch's operations are also taxed.
Branch profits are generally taxed at 30%. However, in certain circumstances the rate may be reduced. Expenses incurred outside the UK wholly and exclusively for the purposes of the branch trade (including a reasonable amount of head office expenses) are taken into account in calculating the branch's taxable profit.

All UK residents are entitled to the “basic personal allowance”. This is an amount of income on which you do not pay any tax. For the 2002-2003 tax year, it is £4,615.

For income above the level of the personal allowance, the tax rates for 2002-3 tax year are as follows:
• 10% on the first £1,920 of taxable income. This is known as the starting rate
• 22% on taxable income between £1,921 and £29,900 (the basic rate)
• 40% on taxable income over £29,900 (the higher rate)

Individuals are exempt from Capital Gains tax (CGT) on the first £7,700 of profit made in any one year from the sale of an asset. Any amount above that will be taxed at:
• 10% on gains up to £1,920
• 20% on gains between £1,921 and £29,900
• 40% on gains over £29,900

Advice and information regarding UK taxation is available for inward investors from the Inland Revenue Inward Investment Information Unit. The information unit has been established so that potential investors who do not have a UK tax presence have ready access to the tax information they require to set up business in the UK.

For more information, visit: www.inlandrevenue.gov.uk/international/inward.htm

Grants and assistance
The UK government can offer Regional Selective Assistance (RSA) to overseas-owned, as well as domestic companies opening a new plant, or expanding or modernising an existing plant in the Assisted Areas of Great Britain designated as “Tier 1” or “Tier 2” areas. The aim of the scheme is to encourage investment together with the creation or safeguarding of jobs.

A manufacturing or a service industry project may qualify for RSA if it:
• Will create or safeguard employment in the Assisted Areas
• Is viable
• Will benefit the regional and national economy
• Needs assistance to go ahead

However, the majority of the finance for projects will be expected to come from private-sector sources. There is also a wide and varied range of UK initiatives that offer assistance to companies within the area of research and development (R&D), for example, the R&D tax credit for SMEs. This was introduced to assist SMEs to undertake R&D, either for the first time, or to encourage them to increase their R&D effort. Guidelines have been published by the UK government that outline what constitutes R&D for tax purposes. Spending on qualifying R&D attracts relief for 150% of the expenditure. This will reduce the cash cost by 30% for a company benefiting from the small companies’ rate of tax. Companies not yet making a profit can take the relief up front and reduce their cash cost by 24%. In the 2002 Budget, the government announced the introduction of a new tax relief to encourage R&D and innovation in the UK by large companies. It applies to all qualifying R&D expenditure from 1 April 2002.
Large companies are entitled to an additional deduction from their taxable income of 25% of their current spending on qualifying R&D, in addition to the normal 100% deduction. Another scheme is EUREKA, which exists to create transborder, market-oriented, high-tech European R&D projects.

A project meets the EUREKA criteria if it:
• Is a high-tech, market-oriented R&D project
• Involves partners from at least two EUREKA members
• Aims to develop a cutting-edge, civilian product, process or service
• Is funded by the partners themselves, who may receive public financing from their national governments

EUREKA supports the competitiveness of European companies through international collaboration, by creating links and networks of innovation. It offers flexible and dynamic support and expertise for market-orientated R&D projects.
It is a framework through which industry and research institutes from 34 countries develop and exploit the advanced technologies crucial to global competitiveness and a better quality of life.
Although project participants are expected to arrange the necessary finance themselves, the Department of Trade and Industry (DTI) may be able to assist with costs. With priority given to small companies, up to 50% of eligible costs may be met by the DTI. In 2001, there were 190 new projects generated.

National Project Co-ordinators (NPC) is the participants’ national contact to EUREKA. The NPC provides all necessary information and assists companies or research centres interested in proposing and launching a EUREKA project. NPC will assist in finding international partners for project proposals and in obtaining the EUREKA label.

Assistance for small firms
Smart in England is the Small Business Service (SBS) initiative that provides grants to help individuals and small and mediumsized businesses make better use of technology or research and develop technologically innovative products and processes.

Technology reviews
Grants of up to £2,500 are available for individuals and small and medium-sized firms (those with fewer than 250 employees) to help towards a best-practice review of technology usage.

Technology studies
Grants of up to £5,000 are available for individuals and small and medium-sized firms to help identify technological opportunities leading to innovative products and processes.

Micro Projects
Grants of up to £10,000 are available to help individuals and micro-firms (fewer than 10 employees) with developing lowcost prototypes of products and processes involving technical advances and/or novelty.

Feasibility Studies
Grants of up to £45,000 are available for individuals and small firms (fewer than 50 employees) undertaking technical and commercial feasibility studies into innovative technologies.

Development Projects
Grants of up to £150,000 are available for small and mediumsized firms (fewer than 250 employees) undertaking development up to pre-production prototype stage of a new product or process involving a significant technological advance.

Exceptional Development Projects
Also for small and medium-sized firms, a small number of exceptional high-cost development projects with a strategic significance may attract grants of up to £450,000. The Smart scheme is available in England only as Scotland, Wales and Northern Ireland have their own initiatives.

Further information on these can be obtained from:
Scotland: www.scotland.gov.uk/who/elld/rnd_SMART_1.asp
Wales: www.wales.gov.uk
Northern Ireland: www.investni.com/invest/
For further information on the Smart scheme, visit: www.businesslink.org/smart