020 7129 8651

Arriving in the UK at the age of 13, Surinder Arora had no English and was far away from his native Punjab. To pay his way through school his mother had a day job in a factory and a night job cleaning offices in West London. At 18, he became a junior clerk for British Airways – his first entry into the tourism industry. Today, as an ‘expat entrepreneur’, with a staff of over 2,000 and 16 hotels up and down the country, he is one of the UK’s most successful hoteliers. Arora Hotels is believed to make him worth £225 million. Although on the high end of expat entrepreneurs fortune-wise, he is a great example of one of the country’s half a million expat entrepreneurs.

Overcoming hurdles to being an Expat Entrepreneur

Reports from previous years have indicated that around 14% of startup businesses in the UK are founded by expat entrepreneurs. 18% of The Formations Company’s customers started limited companies as expat entrepreneurs. Expats have established over 450,000 businesses which currently employ 1.16 million. They tend to be eight years younger than their UK-born counterparts. Further, according to The Economist, 40% of the founders of Fortune 500 companies are immigrants and their children. Despite some negative stereotyping in media and political discourse, expats remain upbeat and entrepreneurial, looking for possibilities in one of the most dynamic economies in the world.

The UK has a rich history of expat entrepreneurship: Italian food makers, Irish construction companies, merchants and trader families from the old Silk Route stretched from northern India to Turkey. The top ten nationalities also include Germans, Americans, Chinese, Polish, Pakistani, and Nigerians. These are not all just related to food, consumer goods, and construction, but also manufacturing, IT, management consultancy and media. So the landscape is diverse. However, what challenges are they likely to face when setting up a business in the UK? And what are the best steps to not only overcome difficulties but to thrive here?

Visa Challenges

For those who live outside of the EU, visa issues will likely present the first challenge. The Tier 1 Entrepreneur Visa has been established for migrants who have either set up or taken over a British business or for those who plan to invest £200,000 or more. Individuals can make an application both within and outside the United Kingdom and up to two business partners may apply. A further incentive has been created to allow entrepreneurs who have created 10 or more jobs or who own companies with revenues of £5 million or more to fast-track naturalization with a later option to become a UK citizen.

#MigrationMadeEasy is a campaign we recently uncovered, heralded by ‘Migreat’, featured in WiredUK’s Startup of the Week. ‘Migreat’ is a portal — developed by a company called Sharehoods. They aim to make labour force migration easier by simplifying visa bureaucracy with user-friendly interface and navigation for immigration rules.

Financial Barriers

Financial barriers are often cited as one of the most common barriers to expat entrepreneurship not just in the UK but across Europe and North America. The trouble of not having a credit history can present an insurmountable challenge to new arrivals. Migrants are often forced to look at informal sources of financing (such as friends and family). Expat entrepreneurs tend to end up working with undercapitalized businesses which never reach their potential.

A lack of awareness or willingness to go for grants and other sources of private funding can also hinder the process. The government offers grants, loans, and other forms of funding for small and medium-sized businesses and start-ups.

In the private sphere, Shell’s Livewire program, for example, offers start-up awards between £1,000 and £10,000 funding to young entrepreneurs in the UK. The Prince’s Trust also has an enterprise programme for entrepreneurs between 18 and 30.  Take advantage of the various incubators offered in different cities and research the options available in your line of business.

Mentoring Support

Mentoring can benefit businesses of all shapes and sizes. It is an excellent way to walk the path of others’ successes and bring out innate talents and skillsets. There are 27,000 mentors to support small businesses in the UK today.

A company that has caught our attention recently is Transmit Startups. They provide start-up loans that can help expat entrepreneurs get their businesses up and running. Just as long as they are based in England or Scotland, aged 18 or over, and are starting a new business or within the first year of trading. Beyond the finance element, they provide guidance and support through the early stages of a new venture. From their team of experienced business mentors, their expertise is suited for every discipline from creative entrepreneurship to a myriad of other businesses.

Language and Cultural Understanding

One of the most attractive aspects of starting a business in the UK is the size of the market – a domestic population of 60 million plus an additional 500 million EU citizens. Enriched language skills and a deep understanding of culture will always spur diversification of migrant businesses. If English is your second language, then consider business English classes, which are offered across the country.

If your English is already up to scratch, think about business diversification. Targeting customers from native country communities may give migrant business owners an edge when starting, but in order to develop it is necessary to look past traditional customer groups. Think of slight adaptation of your products or services, or simply opening a branch in a new area. The key here, as always, is market research but expansion is possible with some creative thinking.

Lack of Access to Information

Finally one of the key challenges that the Centre for Entrepreneurs identifies is lack of access to information. Aspiring entrepreneurs may sometimes lack experience in market research, business plan writing and basic skills including bookkeeping, marketing, legal obligations and HR.

The UKTI Global Entrepreneur Program helps overseas entrepreneurs and early-stage startups to relocate their business to the UK. They provide aid with business plans and providing introductions to investors.

Likewise, formation packages can be a crucial investment for a new company particularly for those less familiar with UK regulatory obligations. The Formations Company offers different options for entrepreneurs, which allow for quick incorporation.

If you’re an Expat Entrepreneur looking to form a company in the UK and need aUK registered office? Our Registered Agent Address Service can help you. For more information and guidance on setting up a limited company, check out articles in our help center.

Published Thursday, January 24, 2013