Startup Guide: How an Indian Startup can expand to the UK
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This article is contributed by Mr. Yash Dubal, Director, A Y & J Solicitors.
When the UK voted to leave the European Union in a national referendum in 2016 one of the defining issues that led to the leave vote was immigration. One of the conditions of membership of the European Union was the free movement of people across all borders. In effect, this meant a pattern of movement from poorer nation-states in the East of the bloc, to the richer states in the West and North. Great Britain saw an uncontrolled influx of migrants, mainly from nations such as Poland and Romania, and many people worried that these hard-working people were driving down wages and out-competing domestic workers. Brexit - the process of leaving the EU- effectively returned full control of immigration back to the UK government.
On January 1 this year the government introduced a new points-based immigration system which included several new visa routes. The system does not include any routes for migrant workers classed as low-skilled. Instead, the political aim is to attract ‘the brightest and best’ workers from around the world. The new routes have a particular emphasis on workers in technology, IT, fintech, science, engineering, and research and are designed to encourage investment. The aim is to lure skilled people to the UK and to attract investment from successful startups wishing to expand into the British market.
The new immigration regime in the UK is designed to make it easier for the 'brightest and best' from the rest of the world to invest in and work in the UK.
It is fair to say that the policy has not gone entirely to plan. Brexit and the pandemic led to an exodus of workers returning to their home nations in Europe. The result has been acute shortages of personnel in several key industries including care, hospitality, and logistics. Short-term visas to fill certain vacancies have been introduced. Additionally, reports this week show that zero applications have been made for one of the new headline-grabbing visa routes. The fast-track route for award-winners in science, engineering, the humanities, and medicine received no applications.
Alan Joseph
While these teething problems are undoubtedly embarrassing for British politicians, they are good news for Indian startups wishing to expand and invest in the UK. For example, startups from outside the EU wishing to expand into Britain will now be playing on a level playing field. There is no longer an inherent bias towards European businesses. Everyone is welcome and the same rules apply to all.
Those startups that do set up branches and subsidiaries in the UK will find a fertile environment. The British SME economy is booming. According to the UK Federation of Small Businesses, at the start of 2021, there were 5.5 million small businesses in the UK, making 99.2% of the total business. SMEs account for 99.9% of the business population employing 16.3 million people, or 61% of the working population. The combined UK SME turnover was estimated at £2.3 trillion. The legislative, investment, and logistical frameworks within the UK encourage start-ups and contribute to the success of this sector.
UK internationalist political will is geared towards cross-border links and investment in trade and commerce. As a result of Brexit, the UK is on a global mission to make new trade deals with other countries. One of its key targets is India. The British government is eager to build business and trade links with India, with a view to signing a free trade agreement, and, over the past year has already signed a raft of agreements and joint initiatives covering sectors such as hydrogen energy and green energy grids. There are already strong historic and cultural links between the two nations and the UK government is intent on cementing these links further. There is also a large, well-established community of Indian ex-pat business owners already established in the UK with many examples of Indian businesses recently investing and expanding successfully in the UK.
Alan Joseph
One of the key routes Indian start-ups are eligible to take when expanding into the UK is via the Sole Representative visa. This visa route allows a senior representative of an Indian business to locate in the UK for the purposes of establishing a satellite office, branch, or subsidiary of the parent company. There are criteria that need to be met in order to qualify for this visa route and I would urge any business considering expansion into the UK to seek professional legal advice on immigration and visa legislation, which will save time and money and maximize the chances of success.
Once all the correct paperwork is in place and the move is made, however, the rewards are great.
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