London, the capital of the United Kingdom, is one of the most culturally diverse cities in the world, with just under nine million people living in the city. The primary spoken language is English, but there are over 300 languages spoken and 53 recognized languages in London. Global business in London is popular because of its location, appeal to travelers, influence, innovation, and sustainable and investment friendly business environment.
Types of Business in London
- U.K. Establishment: a branch or a place of business. This is not a separate legal entity from the overseas parent company, therefore does not have limited liability.
- Limited Company: a separate legal identity, with its own limited liabilities. It offers flexibility of ownership, rather than an establishment above.
- Limited Liability Partnership (LLP): is a legal entity with a flexible, organizational structure, like a partnership.
Top Industries in London
London has always been one of the most successful cities for domestic and global businesses. The U.K. has the sixth largest economy in the world. London’s economy has changed gradually throughout the years. The manufacturing industry was the highest through the nineteenth century and in the early twentieth century service industries, especially financial and business, have risen, and manufacturing has moved to cheaper locations.
The Top 10 Industries in the U.K.
- Finance and Banking
- Information Technology
- Oil and Gas
- Wholesale and Retail
- Transportation and Logistics
London is an international city and well known for business and cultural diversity. London has five business districts, The City, Westminster, Canary Wharf, Camden & Islington, and Lambeth & Southwark. With each location specializing in certain business types.
Dos and Don’ts of Doing Business in London
- Shake hands.
- Introduce yourself and the business.
- Start the meeting talking about uncontroversial topics.
- Dress smart, but not too dressed up.
- Listen and take time in negotiations.
- Ask advice from others in business.
- Be too personal.
- Expect to gain trust immediately.
- Show emotions.
- Promote your business at social events unless someone asks.
- Be too generous, it is classed as a bribe.
London has a vast taxation system. A company that resides in the U.K. for tax purposes is liable to corporation tax on its worldwide profits and chargeable gains.
Companies are required to submit an annual ‘self-assessment’ return within 12 months of the year end. Penalties may be charged for failure to notify Her Majesty’s Revenue and Customs (HMRC) of a liability to corporation tax within three months and for late filing of a tax return.
Other forms of taxation are as follows:
- Capital Allowances
- Chargeable Gains
- Dividends and Profit Repatriation
- Withholding Tax
- Capital Gains Tax (CGT)
- Stamp Duty
- Research and Development Expenditure
- Audited Financial Statements for U.K. Companies
To summarize, doing business in London is an attractive option for companies in the U.K. and around the world. London’s alluring location, influence, sustainable and investment friendly business environment attract companies and tourists from all parts of the world.