You’ve made the strategic decision to set up a new office in
the UK to broaden your geographical reach.
The next step is the practical implementation of that decision, often
started through using the services of your existing trusted advisers and their
UK office or UK network of contacts.
As part of this you will need to appoint a director to the
legal entity from the date of incorporation. You could ask your advisers to fulfil this role,
however, they’re often conflicted either legally or through their internal
processes, from acting. Alternatively,
you could appoint from your head office with no UK based directors as there are
no legal requirements for the appointment of a UK resident director.
The other alternative is to appoint a UK resident director to
your board and there are advantages in doing so that will enable you to set up
faster and more effectively, thus delivering the returns you are seeking within
a shorter time period.
Such an appointment can also reduce your initial start up
costs, whilst providing local knowledge and contacts to support you in
delivering your UK goals.
Specifically, by appointing an experienced UK resident
director, benefits can include:
Local Knowledge
- their knowledge of local culture and work
practices, ensuring your business is effective in the local market as quickly
as possible by reducing the opportunities for mixed messages.
- knowledge of local governance requirements
which, whilst they may be similar to those in your home country, it’s often the
small differences that can become major distractions or costs if not adequately
covered at the outset.
- They speak the local language and understand
local nuances of communication and can translate requirements with you and to
your needs better than an online translation tool.
Bringing Efficiency to Reducing Time & Cost
- They have the ability to be on the ground
working alongside your local advisers ... being your eyes and ears,
contributing to the discussions at a senior level and from your position with
local knowledge. This can mean that decisions are made quicker which can reduce
the time spent costs of your professional advisor team.
- They will have the benefit of a UK residential
address when applying for local services, such as bank accounts.
- They work in the time zone of your new
subsidiary so can get things moving intra-day, possibly even whilst you’re
sleeping.
- It enables you to recruit the most needed roles
first, instead of those that don’t necessarily benefit your bottom line. For
example, your first hires may be sales people supported by a strong support
team, rather than a full time executive management team, thus focussing your
initial workforce costs on delivering strategic value and revenue from the beginning.
- Your first business support appointment can be
manager level support roles, with the potential to develop them within your
corporate culture over time, rather than taking the risk and cost of appointing
a director from the outset.
Building in Flexibility
- Can get your local office up and running quicker
than transferring staff from head office with the cost and time that relocation
processes bring.
- Setting up a UK legal entity takes a few days,
during which you will need a named director. A UK resident director can act as
your local director during this period and whilst you finalise the relocation
process for a transferee from another group office. Thus not delaying your UK timetable whilst
moving through these processes, or incurring extra cost by paying for a fast
track process.
- They can sit alongside your transferred employee
for a period of time whilst they get comfortable with the requirements of
acting as a director in the UK.
- Can be appointed to work part-time to limit the
cost of your executive team whilst you’re setting up, rather than incurring the
cost of full time directors from the outset. Aligning the cost of directors to
the success and revenue delivery of your business.
- As the UK office grows successfully, they can
increase their time contribution or be replaced by full time local directors
contributing as much or as little as you want them to.
Local Connectivity
- Can build a relationship on your behalf with the
local office of your adviser back home, so you have an internal cross-border
discussion at the same time as your advisers have their internal cross-border
communications;
- Will
have an existing network of contacts to support your new office location
efficiently and effectively from insurance to property, recruitment to finance.
- They
can provide connections into short-term contractors for implementation phases,
rather than you recruiting immediately into roles that will naturally change as
the business gets more traction;
- have
an ability to connect and speak with UK government departments on your behalf
as a director of the business – such as HMRC for tax, Companies House for legal
entity registration, Dept of Trade for government support (did you know they
have a team dedicated to supporting non UK businesses expanding into the UK?)
Legal Responsibility
The appointed director takes on the full legal
responsibility of being a director on your business. An experienced director understands these
requirements and legal responsibilities and is comfortable with taking on the
personal appointment.
By appointing an experienced independent director, you’re
not diluting the expertise of those you’ve appointed by also getting them to
take on the legal responsibility of being a director instead of focusing 100%
on what they were hired to do.
It also presents you with a wider pool of candidates for the
roles you need if you’re not also asking them to step up to the legal
responsibility of being a director. If you’re setting up a sales office, you
want to hire good sales people who have experience of selling in your sector.
The latter already reduces your pool of candidates. Why reduce it even further
by requiring director expertise as well?
The appointment of a local UK resident director will be your
support to enable you to achieve your goals in the UK more efficiently and
effectively working solely on your behalf. By sharing your strategic aims for
the business, they can be your UK facilitator alongside professional advisers
keeping your aims and objectives at the forefront of decision making.
In conclusion, you don’t have any legal responsibility to
appoint a UK resident director but it may be beneficial for you to consider the
alternatives and whether this can provide your short-term needs more
effectively. Hopefully this article has
given you some points to consider during the implementation of your exciting
new corporate journey in the UK.
Sue Lawrence is the
founder of S3L Consultants providing independent director as well as strategy
and governance consulting in the UK. This is backed by her passion for the
benefits of effective governance, a diverse corporate career and her training
as a Chartered Director. She brings a holistic overview to businesses, coupled
with proven implementation skills as well as drawing on a broad network of
professional contacts.
www.s3lconsultants.co.uk
