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Going overseas? I want to give you a basic insight and explain what a US business may need to consider before trying to do business in the UK. Equally, the same issues and opportunities apply in reverse to a UK business considering trying to do business in the USA.
Managing A Team Overseas
So you want to do business in the UK and Europe…Fantastic news! Aside of the dreaded Coronavirus that is currently thwarting us all, it’s a world of opportunity for a growing US business wanting to expand overseas and the UK is definitely the place to be!
There are lots of cultural similarities between the US and the UK and, generally speaking, the UK is not a complicated country in which to do business. The most obvious advantage is the same language and the westernized culture that prevails, as well as the wonderful politeness and hospitality that the UK is so famous for. The UK also offers the easiest access as a gateway to doing business in Europe, even despite what you may hear about Brexit.
However, don’t make the mistake of thinking you can just open shop and carry on business as usual; there are many considerations that an expanding US business must consider before entering the UK market. Probably the most important priority is to better understand the employment issues you may face. The UK labour law is much more detailed and employee-friendly in the UK as compared to the US, where “at-will” employment is the norm.
Hiring Employees in the UK
In the UK, as in many countries, an employment contract is set out at the beginning of an engagement which outlines almost everything about what’s expected of an employee and what an employee can expect from their employer. Key things to watch out for when negotiating with an employee in the UK include the much longer notice periods, where between one and three months of notice prior to terminating employment is quite common.
In the UK, the HMRC tax structures are noticeably different to the US in many areas including stock options, employee tax allowances, national insurance (this provides the UK healthcare scheme known as the NHS) and personal allowable expenses. As you’d expect, this will be costly if you don’t manage it properly to begin with and a bit of prep work on the front end with a good advisor can save you a lot of time and money.
Employee benefits are important, but much less so than in the US. In the UK and most countries outside the US, people have reasonable public healthcare and get taxed on additional private health insurance. A personal pension is also one of the most sought-after supplementary benefits in the UK. Pensions are becoming mandatory and your employees will negotiate hard for more-than-the-minimum pension. Layoffs occur too, but UK redundancy laws are very strict and tight to navigate and any slip up outside of the well-defined process can have disastrous financial and reputational consequences to your business; this is an area you do not cut corners on!
Getting a FastStart with TechCXO
When hiring, onboarding, and managing employees overseas, there is understandably a lot to consider. No doubt you may consider interning a senior member of your team from the US to oversee this or even look to recruit a local country manager, depending on the visa complexities. However, whatever route you take you must consider getting expert help to navigate the nuances of the UK market and particularly when it comes to employment, where staffing can be extremely unique and individualized, even beyond the labour-friendly rules and cultural nuances.
TechCXO has launched FastStart, which is our accelerated support model to assist US and UK companies to take advantage of the cross-border expansion opportunities in these respective territories. Our scheme is tailored to meet the needs of every client, depending on where you are in the process.
Our accelerated package offers initial scoping studies and market opportunity planning services to help you assess the opportunity and the considerations needed to do business in the UK. If you have made the strategic decision to launch in the UK, then our concierge service provides an encompassing service to accompany you on a personal trade mission to London and help you to consider city locations (office and home). We also provide a complete orientation and deep dive into the political, social, economic, commercial and cultural scene and help you shape how your expansion journey will unfold. At the higher end of the service beyond the aforementioned, FastStart will offer a co-managed service, acting as your local business partner to deliver on-the-ground executive services in all areas of the business including, leadership, financial, technical, operational and sales & marketing. Our unique connection service will accelerate your local market engagement with the people you want to do business with.
TechCXO is uniquely placed to support your overseas expansion with over 100 expert and experienced partners and a vast personal network with unique local knowledge and resources in both the US and UK territories.
Advice from an Intercontinental Entrepreneur
Please remember that the above is not just for companies in the US aiming to launch in the UK; the reverse applies equally for any UK company expanding to the USA. So, if you would like an exploratory chat about opportunities on both sides of the pond, then please feel free to get in touch. As an entrepreneur and having worked and lived in the USA and UK, I have a unique and very personal perspective and, without doubt, I can help you navigate and accelerate your expansion into the UK or the US. Growth and acceleration: it’s what we do!
Are you considering expanding your business to the UK? Let us know down in the comments.
This article originally published on GREY Journal.