| JAMES
COWPER IS IDEALLY EQUIPPED TO EASE
YOUR EXPANSION INTO EUROPE OR THE UK. BY USING OUR
KNOWLEDGE OF THE UK MARKET-PLACE, WE CAN OPEN UP A WEALTH
OF NEW OPPORTUNITIES FOR YOU.
James Cowper’s specialist team understands
the challenges facing organisations wishing to locate in the
UK. We have many overseas subsidiary companies amongst our
clients. We have connections in Europe and the rest of the
world through Kreston International, a global association
of accountants and business advisers.
James Cowper is also registered with PCAOB
(Public Company Accounting Oversight Board) in the United
States. Authorisation from PCAOB is now a legal requirement
for any firm of auditors which wants to work with UK subsidiaries
of listed US based companies.
Detailed below are a selection of frequently
asked questions raised by people looking to invest or expand
into the UK and Europe. We would be pleased to talk to you
to discuss your business plans.
What
contacts do you have in Europe and the rest of the world?
Why
the UK and where do we start?
How
do we choose the right location?
How
do we find the right property?
Do
we need a UK company?
What
banking arrangements are appropriate and how should we fund
the UK operations?
How
can we find employees and how should we pay them?
What
rates of tax will we pay?
Should
we outsource the UK audit and accounting function?
How
can we locate reliable UK business suppliers?
Inward
Investment Update
What contacts do
you have in Europe and the rest of the world?
James Cowper is a member of Kreston International,
a global association of independent accounting and business advisory
firms. Kreston member firms operate from over 500 offices
in 75 countries around the world and the network is expanding rapidly.
If you are looking to expand overseas from
a new or existing UK operation, we can use the Kreston network
to help you identify high quality firms throughout Europe
and the rest of the world.
www.kreston.com
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Why the UK and where
do we start?
The UK Government wants to encourage multinational
companies to the UK. Tax legislation has been introduced which
now makes the UK a very attractive location for overseas investors.
Should you want to take advantage of these
opportunities, James Cowper can help you through the expansion
and cultural change process.
Our overseas clients have a wide variety
of needs and our "in-house" team, together with
our network of local contacts, can usually provide any help
required.
Whatever your needs you can be assured that
client relationships are of the highest importance to us.
Every client has a dedicated partner who will keep in touch
on a regular basis and ensure that we deliver a positive and
value for money service.
Whatever your stage of expansion into the
UK, whether you are a new entrant or an established organisation,
we would be happy to talk to you.
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How do we choose
the right location?
The right location for your operation is
crucial, not only to maximize exposure to potential clients
and partners, but also to increase your ability to recruit
skilled people and obtain government grants.
Click
here to view map of Thames Valley
About the Thames Valley
The Thames Valley is a UK region just west
of London and served by London Heathrow Airport, which is
a short drive from our three offices. The principal business
locations in the region include Reading, Oxford, Bracknell,
Newbury and Slough. As well as being close to Heathrow Airport,
it has good road and rail links. With this good communication
network and some of the world's leading universities, the
area has become a focal point for inbound investment into
the UK and a centre for technology, telecommunications, computer
and internet enterprises.
Some of the world's biggest multinational
corporations are located in the area including Microsoft,
Vodafone, Oracle, Hewlett Packard, Oxford Instruments, Amazon.com,
and Siemens. Yet at the same time it is the favoured location
of many smaller dynamic companies testing out the UK or European
market for the first time.
As one of the largest firms of accountants
and business advisers in the Thames Valley, James Cowper understand
the business dynamics of the region and we are excellently
placed to advise new entrants to the area.
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How do we find the
right property?
Depending upon your requirements you may
wish to consider a serviced office. This provides maximum
flexibility and usually includes secretarial support, boardroom
hire and the use of fax and photocopying facilities. We can
put you in touch with people who can help.
Similarly we can recommend property agents
who will help with your search for all types of property.
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Do we need a UK company?
Typically, companies operate in the UK either
through
 |
a UK subsidiary company or |
|
a UK registered branch or |
|
a UK registered place of business. |
There are a number of important tax, legal
and regulatory differences between these options, the key
ones being:
 |
|
|
|
| |
Place
of business |
Branch |
Company |
| Separate
legal entity |
No |
No |
Yes |
| Able
to conclude contracts in own name |
No |
No |
Yes |
| Registration
with UK Companies House required |
Yes |
Yes |
Yes |
| Filing
of annual accounts at Companies House |
Overseas
parent |
Overseas
parent |
UK
company |
| Annual
audit required |
No |
No |
Yes |
| Taxable
in the UK |
Possibly,
depending upon the activities |
Yes,
on profits of the branch activity and gains from UK assets |
Yes,
on world-wide income and gains |
| UK
profits assessable on foreign parent |
Yes |
Yes |
Generally
only if amounts are distributed |
| UK
losses available to parent |
Yes |
Yes |
Generally
not |
| VAT
registration |
Unlikely |
Possibly |
Possibly |
Reviewing these factors in isolation is
not enough. Your commercial requirements are crucial. At James
Cowper we understand your business needs and we can help you
conclude which operating structure is best for you.
Once a choice has been made, we can arrange
for the necessary paperwork to be completed as quickly as
possible.
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What banking arrangements
are appropriate and how should we fund the UK operations?
Opening a bank account
Setting up a UK bank account is often a
first priority. We have good contacts with local bankers and
we can arrange introductions.
Funding the operations
If the new operation is seeking finance
in the UK we can discuss with you the most appropriate lending
source. Again we have a network of contacts that you might
find useful. We can help you prepare the necessary business
plans and projections and attend meetings with possible lenders
if required.
If group funds are to be used, we
can advise on the associated tax issues and opportunities
involved with borrowing from overseas.
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How can we find employees
and how should we pay them?
The recruitment, retention and motivation
of employees will be key to your business success. Employees
in the UK will be subject to different cultural and regulatory
practices from your home country.
Using our own expertise and knowledge, together
with our network of local contacts we can help you with a
wide variety of people issues including:
|
Advising on work permit requirements
for people transferring from outside the EU |
|
Advice on local property markets,
schools etc for relocating employees |
|
Introductions to local recruitment
consultants |
|
Advice on tax-efficient remuneration
and benefit packages |
|
Personal tax advice for key
employees |
|
Advice on stock option plans |
|
A cost-effective and efficient
payroll service |
|
Advice on payroll taxes |
|
Employment contracts |
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What rates of tax
will we pay?
The UK Government wants to encourage multinational
companies to the UK. As a result new tax legislation has been
introduced which now makes the UK a very attractive location
for overseas investors. The UK now has one of the lowest rates
of company tax ("corporation tax") in Europe and
has a favourable capital taxes regime to rival that of The
Netherlands. In addition UK social taxes are lower than many
of its European neighbours.
Corporation tax
In the UK both branches and companies pay
corporation tax. The main rate of UK corporation tax is 30%
but it is reducing to 28% from 1st April 2008.
Both initially, and as your organisation
grows, your global tax bill can be affected substantially
by the way your UK operations are structured. Our inbound
team includes tax specialists who can advise you on a wide
range of tax issues including:
|
How should the UK operation
be structured? |
|
What functions should the UK
operation carry out? |
|
How much income should be recognised
in the UK? |
|
How should inter-company transfer
prices be determined? |
|
How can maximum advantage be
gained from UK tax reliefs and incentives? |
VAT (Value
Added Tax)
VAT is the European sales tax. A UK VAT
registered business must charge and account for VAT, currently
at the rate of 17.5%, on its taxable supplies (sales). It
is usually possible however to offset any VAT incurred on
expenses that relate to business purchases.
We can help you determine whether a VAT
registration is necessary or desirable and help with the periodic
returns. We would review any planning opportunities to minimize
your VAT cost.
Custom duties
If your products are liable to import duties,
or if you export from your UK base, then we can work with
you to ensure all custom duty planning opportunities are maximized.
Employee taxes
In the UK the social tax is known as national
insurance ("NI"). NI contributions have to be paid
by the workforce as a deduction from their gross salary ("employees
NI"), and by employers ("employers NI"). The
rate of employers NI is currently 12.8%.
Employers have an obligation to collect
NI, together with UK income tax, and pay the amounts over
to the tax authorities.
The tax team
James Cowper have a dedicated tax team which
is recognised as one of the most experienced in the Thames
Valley. The team is well regarded by the tax authorities and
within the Thames Valley business community. Members of this
team have specific expertise in helping inward investors maximize
their tax opportunities. One of our tax parters, Sharon Bedford,
heads the international tax group of Kreston International.
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Should we outsource
the UK audit and accounting function?
Many of our clients do not initially employ
a UK accountant in-house and therefore look to outsource some
or all of their financial and regulatory functions to a firm
such as ourselves.
Whilst some of the basic processing can
be done overseas there is usually a need to do some bookkeeping
in the UK. In addition there are a large number of ongoing
regulatory, legal and tax filings that are specific to the
UK. Whilst non-financial staff can deal with some of these,
this can distract from the key task of growing the business.
We have developed an efficient and cost-effective
approach to outsourcing these services on your behalf.
This could include:
|
Arranging initial tax registrations |
|
Producing accounting records |
|
Preparing management accounts
and reports in a format and to timescales acceptable to
the overseas financial reporting system |
|
VAT returns |
|
Payroll administration |
|
Corporate tax returns and associated
tax planning |
|
Being the Registered Office
and preparing associated statutory filings |
|
Annual corporate tax returns |
Audit
Under current legislation a UK subsidiary
of a foreign parent invariably needs an audit, unless the group as a whole qualifies
for exemption on the grounds of size.
If you have an international firm of auditors
we would be happy to liaise with them to ensure all the information
is in the format required. Alternatively we could independently
carry out a cost-efficient UK audit in accordance with UK
audit standards. We use a computerised risk-based audit approach
to ensure a rigorous audit is carried out.
James Cowper is registered with the Public
Company Accounting Oversight Board. Authorisation from the
PCAOB is a legal requirement for any firm of accountants carrying
out audit work for UK subsidiaries.
The Sarbanes Oxley Act requires PCAOB audits
to be carried out under US auditing standards. The Act also
requires auditors to report on internal controls under Section
404 audit reporting for UK standards. Auditors of US holding
companies normally accept responsibility for Section 404 audit
reporting for UK subsidiaries, with the UK auditors assisting
them in accordance with agreed procedures.
James Cowper has carried out PCAOB audit
work and assisted management with internal control reporting
under Section 404. This work includes recording internal
controls, testing those controls and identifying weaknesses.
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How can we locate
reliable UK business suppliers?
We have a network of local lawyers and bankers
who we can introduce you to. We are used to working closely
with our clients' lawyers and bankers to ensure consistency
of service and advice.
We also have a network of local business
suppliers who we can recommend. Examples include:
|
Travel agents |
|
Office equipment and furniture
suppliers |
|
Mobile phone leasing |
|
Vehicle leasing |
|
Car retailers |
|
Property agents |
|
Removal firms |
|
Advice on local schools |
|
Availability of grants |
|
Translators |
|
Printers |
|
IT suppliers |
|
Recruitment agencies |
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