The right business model

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Many companies decide to invest overseas when they have established an export trade and a customer base. But has appropriate thought been given to the right business model?

So the first step could be to use a British agent and/or distributor if you are selling product, depending upon whether sales will be as the principal selling direct to the customer, or as agent for the parent company.

If you decide to start in the UK with a marketing facility, finding someone who can generate leads and, can test the UK market and even facilitate sales before you reach the UK would be useful.

Simple enough criteria, but you also need to consider the tax implications when making the decision. The tax treatment in the UK books could result in a full profit and loss recognition (by buying and selling at arms length) through to a cost-plus basis.

We put together a reasonably detailed blog post on the VAT registration for online businesses . This could be a different type of business model, where there will be no UK entity and the trading model will be the overseas entity is UK VAT Registered.

Other company’s could take the commitment leap and opt to setup a UK entity straight away. Depending on the customers and transactions, a UK based entity might be compulsory. For example, as part of a tender process there may need to be a specific type of legal entity, such as a Ltd company or LLP.

Of course we can advise on the viability of some suggested trading models, but only you will truly know your business inside-out. For further information please get in touch for further exploratory discussion.