While markets around the world slow down, India’s economy continues to boom. Growing at a rate of around 7%, it seems to be weathering the waves caused by the slowdown of the Chinese economy. So much so, that many Indian companies are looking into expanding and investing overseas – and one of the most popular choices for doing so is the UK. In fact, there are over 800 Indian-owned businesses in the UK, with over 110,000 employees.
India and the UK have enjoyed a long history and with an Indian population of around 1.4 million, the UK is a fantastic destination for Indian companies who want to break into new markets. But for Indian companies setting up or expanding into the UK there is a lot to consider. So what are the benefits (and risks) of doing business in the UK?
Benefits of doing business in the UK
As well as a large Indian population, the UK speaks a familiar language and has a culture that is well-known to many Indians. The two countries have been linked in many ways over the years with some undoubtedly troublesome times, but now, with Indian independence, a study by UK Trade & Investment (UKTI), has shown that India is now the third-largest source of foreign direct investment into the UK, more than doubling in 2015. Indian law is based upon UK law, so you’ll find a lot of similarities, reducing the time you have to spend learning about unfamiliar legislation.
The UK’s tax system makes it an attractive country to do business in. Corporation tax is low here, and there are some excellent tax breaks for businesses. For example, if your business is conducting research in the field of science and technology, you may be eligible for substantial Research and Development (R&D) Tax Relief. The UK and India have also agreed a double tax treaty, which eliminates the need to pay double tax on income which is earned in one country and paid to people residing in another country.
The opportunity to make use of the UK’s world-leading tech industry is another massive draw for businesses setting up here, as is the large consumer market, with the potential to expand into the EU (for now). Britain is also renowned as one of the simplest places to do business, with the World Bank rating it as ‘the easiest place to set up and run a business in the EU’. Add in a stable government, a skilled workforce and fantastic infrastructure and you’re starting to get a picture of doing business in the UK.
Challenges of setting up in the UK
There are, of course, going to be challenges when setting up or expanding your business in the UK. Navigating employment law, visas, and immigration regulations in any unfamiliar country are going to be difficult.
There is also the uncertainty of the UK’s place in the EU following the shock result of the Brexit referendum. However, markets are already stabilising and it is likely that the UK will continue to have close links with the EU to offer. An enormous upside is that business links with Commonwealth and international countries are likely to have more room to develop and grow in the coming years.
UK based Accountants for Indian Companies
We’re here to help! Our new India Desk has been created to help you navigate and flourish in the UK’s business environment. Trade and business links between our countries have never been stronger, and we can’t wait to welcome you and your business and help set your UK business plans in motion.
Contact Us for Further Advice
For further information, or to arrange a free initial meeting, please contact Sachin Ramaiya on +44 (0) 207 309 2222.