The United Kingdom remains an entrepreneurial hub, with foreign entrepreneurs increasingly setting up or expanding their business. According to overall trends and statistics, foreign entrepreneurs are increasingly forming UK companies, with Q1 of 2025 reporting 89,515 new companies, a 36.49% increase from Q1 2024.

This report shows that foreign business incorporation in the UK is increasing year on year, with the fastest-growing sectors being property, professional services, and food services. The UK doesn’t require foreign nationals to be residents to incorporate a company, like other countries, making it an ideal location for them to expand their business.

Let us dive right into why global entrepreneurs are choosing to incorporate a company in the UK and the types of business structures they can form.

What attracts foreign entrepreneurs to the UK

English-speaking environment

Language barrier is highly notorious when it comes to international business, but the UK is an exception market. The UK is an English-speaking country that favours many entrepreneurs looking to expand their business in Britain. 

Setting up a business in the UK means businesses and customers will understand each other, making the process seamless and effective.

Strategic time zone

The UK’s time zones allow for global connectivity as it overlaps with both the US and the Asia trading sessions.  The most active period is consistently the four-hour overlap between the London session (8:00 AM - 4:00 PM UK time) and the New York session (12:00 PM - 9:00 PM UK time).

Strong business-friendly environment

The UK offers a business-friendly environment for entrepreneurs due to its stable market, government support, and skilled workforce. The UK attracts both international students and people who bring their expertise into the market that caters to a diverse economy.

Access to the global market

Incorporating a company in the UK gives your business access to the global markets. There are 130+ double taxation treaties, which businesses can access. Additionally, the UK has strong trade relationships with the EU, the US, Asia, and the Commonwealth, and it is a global business hub in London, one of the world’s top financial cities.

Financial and tax advantages

The UK is the most affordable country to incorporate a company, even with the recent fee changes expected to take place in February 2026. Additionally, there are no restrictions on exchanging or remitting business income or capital.

The country also offers a favorable tax system, which is designed to be attractive to businesses, with competitive corporate tax rates and incentives for research and development.

Talent and workforce

Located in a strategic location, the UK attracts a global talent pool across various sectors, and the government offers visa programs to support this.

Types of legal structures foreign entrepreneurs can incorporate in the UK

As a foreign entrepreneur, you can use any company structure to start your business. Before choosing a structure for your business, it is essential to understand what your business needs and how it will benefit from it. We will highlight everything about the structure to help you choose the best one for your business.

Sole traders

This business structure is operated by an individual, since it acts as self-employment. The business owner is responsible for running the company, including tax planning, filing for self-assessment, and administrative duties.

To operate as a sole trader, you do not need to register with Companies House, but you must register with HMRC for self-assessment.

Private limited company (Ltd)

This is a separate legal structure that is distinct from the business owner and directors. It provides limited liability protection to the business owner, company director, and shareholders. This company structure is most popular since company owners can control their ownership.

Shareholders have the power to choose the number and the type of shares they can sell to investors, just to keep the ownership of their company.

Public limited company (PLC)

This is also a separate legal structure that is distinct from the company directors and shareholders. This structure’s shares are sold to the public on a stock exchange.

Limited Liability Partnerships (LLP)

This structure is formed by two or more people. The structure offers two features: the limited liability protection and the partnership, where members are responsible for filing their own self-assessment tax.

LLPs are operated by at least two members and must be registered with Companies House.

General partnership

A general partnership is also started by two or more people, but it is not legally registered with Companies House. Just like sole traders, members are responsible for running the company and filing their own self-assessment taxes.

Each of these company structures is legal to operate in the UK; however, business owners must understand how they operate to ensure they choose the correct one to meet their business needs. 

What you need to set up a business in the UK as a foreign entrepreneur

If there are any differences between UK residents and foreigners in the requirements needed to incorporate a company in the UK, they may be slight. Here are the requirements for incorporating a company in the UK;

A unique company name

The name must be unique and not similar to those already registered with Companies House. Depending on the company structure you choose, your company name should end with it. For instance, if you choose to incorporate a private limited company, the name should end with (Ltd or Limited company).

There are other company name restrictions that a company should know before registering a company with Companies House. To know more about the restrictions, you can check on Companies House website.

A registered office address

You need a registered office address to register a company in the UK. While being a foreign entrepreneur may make it tricky to have a registered office address for your business since you are physically located there, technology has made it easier through the virtual office.

No matter the jurisdiction you want to incorporate a company in, you can rent a UK virtual address to act as your registered office address. It is essential to ensure that the virtual office service you choose complies with the Companies Act 2006.

Standard Industrial Code (SIC)

Business activities are classified under the SIC code, a five-digit number that categorises a company's primary activities. For example, 27400 for the manufacture of electric lighting equipment.

At least one director

A private limited company needs at least one company director. You can be the sole director if you are starting a business alone; however, if you are starting the company with other business partners, you can choose who will be a director.

When choosing a director, it is essential to know that they have responsibilities under the Companies Act 2006 that they must fulfil.

Shareholder

The company should also have at least one shareholder who can also be a director.

Memorandum and Articles of Association

Memorandum of Association: This is a legal document signed by shareholders confirming that they have agreed to form the company. 

Articles of Association: Not really a legal requirement, but it is recommended for companies to have them and is recognised under the Companies Act 2006. This document contains a set of rules that govern how the company will be operated. It also states the responsibilities of the director, shareholders’ powers, share distribution, among more.  

With all these requirements, you can easily incorporate a company with Companies House or use a third-party service like a company formation agent. A trusted provider such as BusinAssist can make the incorporation process smoother and more seamless, especially for foreign entrepreneurs who may not be familiar with the legal procedures involved in UK company incorporation.