One of the biggest dreams of every Nigerian entrepreneur is to achieve global recognition. As much as this might sound like a difficult thing to achieve, it is not. Many Nigerian brands like Flutterwave have taken very bold steps to build global businesses. And registering their businesses in the UK is one of the best moves they could have made in that direction. Registering a business in the UK as a Nigerian is not so much of a hassle. The UK has a very efficient and transparent system that welcomes entrepreneurs. Whether they are residents, citizens, or not, they can easily incorporate, build, and legally run a business.
As a Nigerian, it is possible for you to run a fintech company, a consulting firm, an e-commerce brand, or a tech startup in the UK. This is highly achievable with a proper business plan. The first thing you should do is register your brand in the UK. And in this article, we’d be showing you the step-by-step method on how to register your business in the UK as a Nigerian without breaking your back.
Why You Should Register Your Business In The UK As A Nigerian
Before we show you how to register your business in the UK as a Nigerian, it is safe to know why the UK is a good option for your business to reach global recognition. First of all, the UK has one of the best systems and structures that make it very effective for non-residents and non-citizens to register their businesses. As a matter of fact, the World Bank confirmed that the UK has one of the highest ease of doing business scores out of all the countries in the world. Examples of the structures the UK has put in place to help the business of non-residents/citizens thrive are:
- An easy tax system that is easy to learn and manage, especially when compared to other countries in Europe.
- A no-residency requirement, i.e, you don’t need to be based in the UK or even have a UK visa to register or run your business in the UK.
- Access to accounting and financial tools and payment gateways like PayPal and Stripe to receive money globally.
- Legal protections that allow you to separate your assets from business liabilities as a limited company owner.
You should also know that registering your business in the UK as a Nigerian helps you build global trust and credibility. Thereby earning you more access to the international market and clients. What about the process of registering your business in the UK? It is very seamless and fast. As a matter of fact, you can register your business in the UK while you are in Nigeria within 24 to 48 hours because the process is very digitised and fast.
Company Structures To Register Your Business In The UK As A Nigerian
Before you start the process of registering your business in the UK, you have to decide if you want to launch your company as a sole trader, a limited company, or an umbrella company. It is also wise to consider the city you might want to operate your business from. This is because finding the right format for your business would help you operate more effectively and efficiently while saving money on taxes.
Sole Trader:
If you want to be the exclusive owner of your business, maybe as a freelancer or contractor, you could launch and register your business as a sole trader. The sole trader structure also entitles you to all your profits after tax payments. It is easy to set up because you would not need to register with Companies House, although you have to set up with HMRC.
But you should know that if you register your business in the UK as a sole trader, you wouldn’t get as much tax relief as you would get if you register as a limited company. Also, there is very minimal access to getting a business loan if you need one. Lastly, you wouldn’t have the same level of protection as you would if it were a limited company. This implies that if the business goes into debt, it’s the same thing as you going into debt.
Limited Company:
Unlike the sole trader structure, the limited company structure separates your identity as the business owner from the identity of the business. This means that both you and your business are two different entities. It is called a limited company because it offers limited liability. And this implies that even if your company runs into financial troubles, your assets would be protected. For most Nigerian entrepreneurs, the Private Limited Company (Ltd) is the most practical and safest option to register your company in the UK. This is because it can allow you to be both the director and a shareholder in the company, protects your assets, and offers tax efficiency if your profits are reinvested or withdrawn via dividends.
Umbrella Company
Registering your business in the UK as an umbrella company means that another business would be acting as an employer for you. This type of registration is usually done for a fee and a fixed term, and would give you more access to guidance and support as a new business owner. It would also shield you from the hassle of setting up formally as a limited company and the normal responsibilities of running your business, like VAT returns, payroll, opening a company account, etc. But you should note that registering your business as an umbrella in the UK as a Nigerian, you would have less control over expenses, unlike you could with your limited company. Also, you would have a lower take-home pay as umbrella companies deduct taxes before paying. Lastly, you wouldn’t have your brand or ownership—you are regarded as an employee.
Required Steps To Register Your Business In The UK As A Nigerian
To successfully register your business in the UK as a Nigerian, you need to know the exact regulations so as to do things properly and correctly. Here are the general steps to guide you on how to register your company in the UK as a Nigerian:
1. Choose The Right Business Structure
The very first thing you want to do is to choose the right business structure for your business, because this would determine the registration process you would undergo. As a Nigerian registering from outside the UK, the most suitable option for you is to register your business as a Private Limited company.
2. Pick a Unique Business Name.
As easy as this sounds, it is not so easy. First of all, you should know that your business name should reflect what your business stands for and the services you provide. Secondly, your business name must not be identical to or too similar to existing companies. So, in order to choose a unique business name for your brand, you should use the Companies House name checker to ensure your desired name is available. You should avoid selecting a name that will be too difficult to pronounce or spell, as this will only frustrate your potential customers. Furthermore, you should get the Standard Industrial Classification(SIC) code that identifies what your business does, because it would help the Companies House understand your company’s sector or Industry.
NB: Unless you have permission, your business name should not contain sensitive words like “Insurance” or “Bank.” Also, you should avoid trademarked names, except if you own the trademark.
3. Get a UK Registered Office
What is a registered business in the UK without an actual location in the UK? Every UK-registered company must have a registered office address in the UK because this is where official mail and documents from the Companies House would be sent. As a Nigerian who is not residing in the UK, you are likely not to have a UK address, but this is not a problem.
You could either use a virtual office service, which costs about £10 to £30 (₦25,000 –₦ 70,000) per month, depending, or you could use your lawyer or accountant’s office in the UK. The most preferable option is to use a UK company formation agency that provides an address as part of their package, as it would save you most of the stress of handling the whole process yourself. This would also be useful in opening a bank account. There are co-working spaces or company formation agents that offers address services for businesses.
4. Appoint Directors and Shareholders
To register your business in the UK as a Nigerian, you must have at least one director as the one who runs the company and one shareholder who owns shares. The good news? You can be both, so there is no need for any UK citizen to be involved. Although, you would need to provide the personal details—name, personal address, and date of birth of the director and the shareholders. You would also need to decide on the share structure of your business, i.e, you need to decide how many shares your company would have, the value of each share, and how many shares each shareholder would own. If you are the only shareholder, you can own 100% of the shares. NB: You don’t need to deposit any share capital immediately, as this is just a declaration of ownership.
5. Prepare Legal Documents
To register your business in the UK as a Nigerian, you would need the following documents: IN01 form, Articles of Association, and Memorandum of Association. You can download these documents from the official site of the Companies House. The IN01 form is used by the Companies House to register companies. In this form, you would provide the basic company information, like company name, structure, etc., and information about the director, shareholders, and secretary(their names, address, and date of birth).
The Articles of Association are a document that states your company’s rules, legal responsibilities, and the roles of all members. It outlines how your company will be run. All directors and shareholders who run a business in the UK must sign the Articles of Association document. The memorandum of association includes a statement regarding the liabilities of the company’s members and all the information on the share capital. These are the legal documents required to register your business in the UK as a Nigerian.
6. Register With Companies House
Once you’ve gathered all the required documents, go on to the Companies House website and submit all your details. Registering your business on Companies House can be completed in one day if you are able to submit all the documents before 3 pm. If you are registering with a formation agent, then you would submit all the documents to them to do the registration process for you.
7. Register With Corporation Tax
Once your company is approved by Companies House, you will receive a confirmation email and a certificate of incorporation. The next thing you should do is to register for Corporation Tax within 3 months of starting any trading activity. To register, you’ll need your company’s Unique Taxpayer Reference (UTR), company registration number, and the start date of trading.
8. Build Your Professional Presence
Although this is very optional, it is very necessary to build credibility, especially as your company is registered. To build your professional presence, you could start by creating a professional email for your company, if you don’t have one already, and also creating a website for your business. You can also leverage social media platforms like LinkedIn, Instagram, and Facebook in order to connect with your clients.
Common Mistakes Nigerians Make When Registering A Business In The UK
It is one thing to register your business in the UK as a Nigerian, and it is another thing to do it correctly. This is because some mistakes are bound to happen when compiling documents or even while filling out the numerous forms.
Using an Invalid UK Address
Sometimes, due to filling out the basic information of address, name, etc, you might fill your Nigerian residential address as the company address. This is a common mistake most people make. You should know that the UK law requires a valid UK address for company registration because it is where government letters can be received. And this address must be a physical address in England, Wales, Scotland, or Northern Ireland.
Not Following Legal Obligations
If you think that the registration of your business is all you need and ignore the annual legal obligations required of your company, you risk the dissolution of your company. After registering your business, you are legally required to register for Corporation Tax within 3 months of starting your business.
Using Incomplete or False Information
Using fake names or providing incorrect director/shareholder information is one big mistake you should not make. Read each document clearly before you fill it out and ensure that every detail is correct. Also, you should choose at least one SIC code that describes your business activity. You can check the UK government’s official site to find your SIC code.
Relying on Unregistered Agents or Scam Platforms
As much as you are advised to use company formation agencies to make your registration process as seamless as possible, it is still safe to note that there are unregistered and unlicensed agents out there to scam you. The worst mistake you could make is to fall into their traps. To avoid mistakes like these, you should check the UK government’s official website for registered and licensed company formation agencies you can trust.
Conclusion
Registering your business in the UK as a Nigerian is one step to achieving global recognition and creating room for growth and expansion. The beautiful part is that it is even easier than you would have thought. You do not need a visa, nor do you need to live in the UK. So, do you want to attract international clients and build a sustainable business in the UK? All you need to do is follow the steps as listed in this guide to register your business and take the bold step to position your business for global growth.
Frequently Asked Questions (FAQs)
Q. Can I register a UK company while living in Nigeria?
Yes. You don’t need to live in the UK. The process is online and open to foreign nationals.
Q. How much would it cost me to register a business if I do it myself?
Online registration costs £12, which takes about 24-48 hours, while registration by post costs £40 and will take 8-10 days for approval or refusal.
Q. Can I get a business visa after registering a UK company?
No, registration doesn’t guarantee a visa. You’ll need to apply through official immigration channels.
Q. What documents would I receive upon registration from Companies House
The documents you will receive from the Companies House are:
- Certificate of Incorporation
- Memorandum of Association
- Articles of Association
Q. Can I run a business without registering?
Yes, if you are running your business as a sole trader. But you will need to register with HMRC for tax returns. If you are running a Limited Company, you must register with Companies House.
Q. Do I need a UK partner or director?
No, you don’t. You can be the sole director and shareholder, even as a Nigerian resident.
