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Setting up a branch or subsidiary of an overseas business in the UK

Written by
Helena Sheizon, Kadmos Consultants
Date of Publication:
30 June 2022

There is no specific visa requirement for anyone who wants to register a business in the UK. However, this is not the same as working for or on behalf of the business.

Ownership of a UK registered business does not give the owner residence rights and does not infer the right to work.

In order to be able to work for or on behalf of the business, the business owner may wish to consider all available opportunities before choosing the option that best fits their circumstances and objectives.

For businesses that have been established and trading overseas for at least three years, one of the possible entry routes, including an immigration option for up to five senior employees, is the Expansion Worker route. This route replaced the Sole Representative route in May 2022. The Expansion Worker route is open to both the business owner and senior employees of the business and allows up to five representatives in the UK at the same time. The requirement of the route is that the business should continue to have its main operations outside the UK, so the route is not suitable for a complete transfer of the business, but solely for the expansion to the UK of a business well established and continuing to trade overseas.

The first step down the UK Expansion Worker route is for the business to obtain a sponsor licence. To qualify for the licence, the business has to show that they have been established and trading outside the UK for at least three years and have a genuine intention and capacity to expand. The business also has to make a "footprint" in the UK – this means to register a branch or subsidiary in the UK or secure business premises. The documents required in support of the Expansion Worker sponsor licence application include a business plan and a financial projection to demonstrate viability of the project.

Expansion Workers have to be paid not less than £42,400 per year or the "going rate" for the job as specified in the Immigration Rules, whichever is higher. The worker has to have been working for the business outside the UK for at least 12 months before applying for entry clearance, unless their proposed salary in the UK is over £73,900. This requirement does not apply to Japanese companies.

There is no English language requirement for Expansion Workers. And this route does not lead to settlement in the UK. To qualify for a permanent right to remain in the UK the worker will need to switch into another immigration category, most commonly into the Skilled Worker route.

The registered branch has to remain dormant until all Expansion Workers have relocated the UK. Once the business has started trading in the UK, expansion worker route is no longer a valid option. At this stage, the business will need a Skilled Worker licence or a Senior or Specialist Worker sponsor licence to second their staff to the UK.

Skilled Worker sponsor licence is available to any trading business with a genuine vacancy. The business has to appoint an Authorising Officer as the responsible person dealing with the Sponsor Licence application. This Authorising Officer has to be either a British citizen or a person settled in the UK. Therefore, there is an implied requirement that the business must have at least one settled senior employee or office holder.

Skilled Worker licence is granted for four years and is renewed before the expiry.

There is no maximum number of Skilled Workers the business may sponsor. The process of sponsoring a worker from overseas is slightly different from sponsoring a worker who is already in the UK and is either switching into a new category or changing job. For sponsoring a worker from abroad the business has to request from the Home Office a "defined certificate of sponsorship". The request will include the details of the job title, job description, work hours, salary and SOC code for the job, but does not require information about the prospective employee. This process can take up to 14 weeks, although in practice is normally processed much quicker.

Once the defined certificate of sponsorship is obtained from the Home Office it is valid for three months and the employee is free to assign it to the applicant of their choice. The prospective employee should then make the application for a visa. The visa application has to be made within 3 months of assigning a certificate of sponsorship. The visa application process normally takes up to 8 weeks but can be expedited for an additional fee.

Skilled Worker can be sponsored for any period of time up to five years. After five years the employee is eligible to apply for indefinite leave to remain, subject to continuous residence requirements and suitability requirements related to clear criminal record and immigration history.