Britain is the sixth-largest national economy globally, but it houses the largest financial center in the world alongside New York. London is one of the world’s largest cities and has the highest GDP city in Europe. This makes the UNITED KINGDOM an important financial center for international investors.
The London Stock Exchange has a market value of more than $ 6 trillion, making it the third-largest in the world. There are around 3,000 companies from more than 60 countries listed on the stock exchange, including companies from Africa, China, Latin America, Europe, and Asia.
Benefits and risks of investing in the UNITED KINGDOM
Some benefits of investing:
Financial Center: London has one of the most developed financial markets next to New York, making the stock market a stable and very liquid market for investors looking for exposure outside the United States.
The UNITED KINGDOM is home to many of the world’s largest companies, from Rio Tinto to BP to GlaxoSmithKline, which makes investing in the region less risky than other financial markets worldwide.
Some investment risks:
Service Economic: The UNITED KINGDOM economy comprises more than 70% of services, which is common among developed countries. This may mean more stability, but changes in consumer credit and commodity prices can quickly cause problems.
Political Risk: Britain threatened to leave the European Union in 2016, introducing a high political risk level to its economy. Scotland made similar threats to leave the United Kingdom. These types of threats can lead to economic volatility.
Starting a business in the UNITED KINGDOM
Any person who is a citizen of the United Kingdom can start commercial activity. Still, for a foreign investor, he needs an entry visa and a permanent residence permit, and it may be rejected or accepted, depending on the nationality the investor holds.
Steps to establishing a company
· Choosing the type of company that suits the kind of activities you will practice and the tax value.
· Choose a unique company name.
· Determine the shareholders or guarantors.
· Identify people with the most significant influence in managing and controlling the company.
· Preparing legal documents and drafting the articles of incorporation.
· Open a bank account in the name of the company and deposit the minimum capital.
· Obtaining a certificate and certificate of deposit from the bank.
· Check the records you need to keep.
· Register the company with the commercial registry.
· Register the company with the tax office.
Types of companies
Public Limited Company (PLC):
The business must have a capital of £ 50,000 or more, of which at least 25% must have been paid out before the company can begin trading. PLCs are also required to have at least two directors and a company secretary. All listed companies are PLCs, but many private companies take advantage of the PLC’s status and credibility.
A private company limited by guarantee:
A private company limited by guarantee limits its guarantors’ liability to a pre-agreed amount that they must pay in the event of the company’s termination. They are non-profit companies; there is no capital, and therefore no shareholders, in a private company limited by guarantee. Company members are the guarantors, and often they are only liable for a token amount such as £ 1 if the company is terminated.
A company limited by shares:
There is no minimum share capital. With more than two million companies registered in Companies House, private companies limited by shares are the most used company type in the United Kingdom. It is more commonly referred to as a private limited company and must have the word “limited” or the abbreviated suffix “limited” at the end of its name.
Unlimited private company:
There aren’t many unlimited private companies compared to other types. There is no maximum amount that its members must pay if the company is terminated, so it tends to be used in companies where bankruptcy is very low.
Particular types of limited companies:
In addition to the four main types of public and private companies, a few specific non-standard limited company entities are identified. These are: Community Interest Corporations (CICs) and Right to Manage Companies (RTMs).
Community Interest Company (CIC):
Societal interest companies are created for companies that seek to be beneficial to society rather than shareholders or members of the corporation. They can be either public or private and can be limited by capital or collateral.
Right to manage company:
(RTM) is used to transfer authority for things like maintenance and repair of a building from owner to tenants. All RTMs must be set up as a particular type of private limited warranty company.
They are commercial entities that can be established in all European economic areas. When incorporated in the UNITED KINGDOM, SEs are a type of public limited company formed as a subsidiary of another company or as a holding company. SE companies can also be created through mergers or from an existing PLC.