10 Reasons why you should set up a business in the United Kingdom

Thinking of setting up a business in the U.K.? Here are ten reasons why you should choose the U.K. over any other country!

Launching a business is complex and challenging but can also be advantageous. However, there are several important considerations to consider when starting a business. One of the most crucial factors is deciding where to establish your business. When it comes to a country for business setup, search no further than the United Kingdom, a financially secure, interconnected country with a vibrant business climate. 

For a valid reason, the United Kingdom (U.K.) is the headquarters of many international corporations. The U.K. provides businesses with the ability to connect to a wide range of clients, as well as to collaborate with many other nations around Europe. According to research, a business in the United Kingdom can gain exposure to more than 500 million customers worth $134 billion each year in Europe alone.

Find out more reasons to kickstart your business in the United Kingdom:

Strong and Big Economy

The United Kingdom boasts a formidable economy that attracts businesses and startups alike. With a population exceeding 66 million, it offers a substantial consumer base, making it a prime market for various industries. Regarding Gross Domestic Product (GDP), the U.K. consistently ranks among the world’s top economies. In 2022, its GDP stood at over £2.2 trillion, roughly a £86.3 billion increase compared to the preceding year when the U.K.’s economy measured at £2.14 trillion.

Its robust support infrastructure makes the U.K. particularly appealing to entrepreneurs and startups. The country’s stable political environment, well-established legal framework, and access to venture capital make it an attractive destination for businesses seeking growth and innovation. Government initiatives and private investors seek promising ventures, providing ample funding opportunities.

Moreover, the U.K.’s diverse economy spans sectors such as finance, technology, healthcare, and manufacturing, offering many opportunities for startups to thrive and collaborate with established players. 

Global Reach

The United Kingdom has an extensive global reach facilitated by a network of international agreements, positioning itself as a key player on the global stage. 

One notable example is the U.K.’s trade agreements. After leaving the European Union, the U.K. swiftly struck trade deals with countries worldwide. The historic UK-Japan Free Trade Agreement, signed in October 2020, is set to increase trade between the two nations by an estimated £15.2 billion, reflecting the U.K.’s ambition to expand its global trade presence. 

Additionally, the U.K. has pursued negotiations to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which would further enhance its access to the Asia-Pacific market. Diplomatically, the UK is a member of numerous international organizations, including the United Nations, G7, G20, and the Commonwealth, allowing it to engage in diplomatic efforts and foster relationships with nations across the globe.

International Language

U.K.’s international language status opens a vast global network, simplifying market expansion, international partnerships, and access to a diverse talent pool. Moreover, London, the U.K.’s capital, boasts unparalleled linguistic diversity, with more than 250 languages spoken across the city. This multicultural environment fosters a global outlook, making it easier for startups to navigate international markets.

English is the second most widely spoken language globally, with over 1.35 billion speakers, including non-native speakers. As the primary language, English serves as a global lingua franca, facilitating communication and collaboration with partners, clients, and investors worldwide. This linguistic advantage significantly contributes to the U.K.’s appeal as a business destination.

The international language advantage extends beyond business communication. English-language content from the U.K. has a broader reach, as it can easily engage global audiences. It simplifies market entry for startups aiming to target English-speaking markets, encompassing countries like the United States, Canada, Australia, and many others.

Supportive Government

The United Kingdom has established itself as a hub for business innovation and entrepreneurship, largely thanks to its business-friendly government policies. These policies create an environment conducive to starting and growing businesses, benefiting aspiring entrepreneurs and the economy.

The Start-Up Loans program is a notable example of the U.K.’s business-friendly approach. Launched in 2012, this government-backed initiative provides low-interest loans and mentoring to new entrepreneurs. 

Another significant program is the Research and Development (R&D) Tax Credit scheme. It encourages businesses to invest in innovation by providing tax relief on qualifying R&D expenditures. This incentivizes companies to develop new products, services, and technologies, contributing to economic growth. 

Check out the official U.K. government website to learn more about business-friendly support.

Tax Benefits

The complex tax systems businesses must navigate are a significant barrier to international expansion. Fortunately, the U.K.’s tax structure is relatively simple when compared to those in other economies. The United Kingdom features a variety of tax breaks for businesses, as well as some of the most business-friendly tax regulations in the world. Businesses in the United Kingdom can benefit from various tax benefits, including VAT exemptions.

The United Kingdom has one of the lowest corporation tax rates of any industrialized country, making it an appealing location for businesses. This allows enterprises to retain more income and invest in their future. The U.K. now has a corporation tax rate of 25%.

In addition, the Kingdom has entered into double-taxation treaties with several other countries, implying that many U.K. corporations do not have to pay taxes on any overseas profits received. Furthermore, the U.K. has established a 20% VAT (Value Added Tax) on a wide range of services and items sold in the country, which might benefit your company.

Entrepreneur-friendly culture

The United Kingdom offers various enterprise zones that are appealing to overseas enterprises. Enterprise zones are geographical locations within the United Kingdom that provide advantages such as tax cuts to new and expanding enterprises. Furthermore, the barriers to beginning a new business as a foreigner in the United Kingdom are pretty low compared to other affluent nations in the East and West.

The United Kingdom is usually acknowledged as an excellent business location, partly due to its stellar track record for transparent business practices. In 2022, the World Bank placed the United Kingdom seventh in terms of “ease of doing business.” This score is calculated using business launching, collecting taxes, cross-border learning, and contract enforcement.

Hardworking Talent Pool

The United Kingdom boasts some of the world’s most ancient universities and currently supports a workforce exceeding 33 million, possessing one of Europe’s most extensive pools of highly skilled talent.

Furthermore, the U.K. maintains a flexible labor market with regulations prioritizing employee protection. Rather than being perceived as a hindrance, businesses consider these stringent, employee-centric regulations advantageous. They not only clarify employment requirements in the U.K. but also enhance the well-being of their workers.

Regarding labor costs, the United Kingdom remains competitive compared to neighboring countries like Ireland or Germany. Nonetheless, the lower social security contributions required of employers make hiring in the U.K. more cost-effective, ultimately bolstering their financial performance.

Finance hub

London’s financial sector plays a massive role in the U.K.’s economy. It makes up over 8.3% of the U.K.’s GDP, with the City of London alone contributing 30% of its taxes. This bustling financial environment offers several advantages for new business owners:


      • Funding Opportunities: London’s financial district is home to a vast network of investors, including venture capitalists, angel investors, and private equity firms. Entrepreneurs can tap into this substantial source of capital to secure funding for their ventures.

      • Global Expansion: London’s worldwide connections provide a launchpad for startups to expand internationally. Access to global markets and a diverse talent pool can accelerate business growth.


        • Government Support: The U.K. government offers various programs to assist startups. For example, the Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) provide tax incentives to investors who support early-stage companies, making it easier for entrepreneurs to attract funding.

        • Startup Resources: London hosts numerous startup incubators and accelerators like Techstars London and Level39. These organizations provide mentorship, resources, and networking opportunities invaluable to entrepreneurs.

        • Access to Expertise: London’s concentration of financial expertise means easy access to legal, financial, and advisory services crucial for business success.

      Booming tourism industry

      The United Kingdom is a prominent tourism hub, attracting millions of visitors annually. This thriving tourism industry offers significant benefits for entrepreneurs launching their businesses. In 2022, the U.K. welcomed over 40 million international tourists, contributing £30 billion to the economy. This influx of visitors creates a substantial customer base for various ventures, from hospitality to retail.

      The United Kingdom boasts a robust legal system, which serves as a cornerstone of support for entrepreneurs launching their businesses. This strength is evident in the World Justice Project’s Rule of Law Index, where the U.K. consistently ranks among the top nations globally. A solid legal framework provides security and confidence to business owners, protecting their interests and investments.

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      Final thoughts about the United Kingdom

      Thank you for reading this article. You can continue to explore our articles about the United Kingdom in our Blog or access some other articles about English Education and Housing, how to start a Business and Statistics, Finance and Travel Business. If you need services related to company formations, nominee services, banking or payment processing services, please get in touch, and we will introduce you to our trusted partners.

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