How to do Business in the United Kingdom
December 20, 2017
Introduction to the UK
Doing business internationally is the way of the future. Small businesses have much to gain from doing business around the world. But, it can be a challenge.
To hedge your bets, why not begin working with a country that knows how to get it done?
The UK has a long and successful history of international trade, especially with the US
It’s the fifth largest economy in the world, and the US frequently receives the most British export goods in a given year.
The most common exports from the UK include manufactured goods, fuels, chemicals, food, beverages, and tobacco. The common imports to the UK include: manufactured goods, machinery, fuels, and food.
With the still-recent Brexit vote looming, the UK’s economy is still transitioning. Many markets that were closely tied to Britain, specifically in the European Union, have slid behind the US. As a trading partner, the US is finally able to out-do the beneficial policies of the EU with high-quality goods and great prices.
For US small businesses, Brexit can be a great opportunity.
The UK’s long trade and diplomatic history with the US makes the international stage that much easier and less scary to enter. Whether you’re a new or established business, the UK is always a great place to invest.
London has a population of over 8 million, and is in the top thirty largest cities in the world. London is a global leader in many respects, and is the world’s largest financial center, making it the sixth largest GDP in the world.
London is a very cosmopolitan city. Over 300 languages are spoken there. It’s the world’s most visited city as measured by passenger traffic. London is the world’s leading investment destination, home to more international retailers and high-net worth individuals than any other city in the world.
For international businesses, you’d be hard-pressed to find a UK business that isn’t headquartered or has ties to London. Establishing some contacts here can greatly increase your chances of making it big on the island.
The UK, while recognized as a singular nation, is actually made up of a few historically diverse areas. Each of these areas has attempted to establish their independence from Britain, and therefore enjoys a diverse history and culture.
The UK is made up of England (obviously), Scotland, Wales, and Northern Ireland (since the Republic of Ireland split off in 1916. This can get a bit confusing, and generally those who live in these areas don’t refer to themselves as British. Scotland is home to the Scots, Wales to the Welsh, Ireland to the Irish, and everyone else is British.
This cultural diversity requires international businesses to be extra aware of every UK citizens’ cultural heritage. Don’t assume, and try your best not to offend.
The currency in the UK is the pound sterling, commonly called the pound (£) or GBP.
It is the world’s oldest currency in continuous use, which is pretty interesting.
GBP generally enjoys a favorable exchange rate over USD. In fact, the pound is worth more than the euro. This gives British businesses all the more incentive to use US suppliers. US businesses can offer better prices than the EU can because of the currency exchange rate.
Although the language of the UK is English, there is an old saying that the US and Britain are “two nations divided by a common language.”
The dialect and idioms of English vary so widely from US to UK that some businesses find themselves lost in conversation. You could find yourself accused of speaking “American.”
The most important differences to know about how English is used in the US and UK is vocabulary. There are several differences in how words are used. For example, one doesn’t say a product is “on sale,” you say it’s “on offer.” In the US you call them “sneakers” whereas in the UK they are “trainers.” Other differences can be picked up on as you go along.
Generally, your UK business partners will understand your dialect, though may find it a little strange. As long as you’re doing your best to pick up the lingo, you should get along just fine.
Finding a Supplier
Holidays in the UK
As we’ve said, the UK is diverse in its culture. Each geographic area celebrates its own holidays, while some are observed “nationally” across the United Kingdom.
Below are the holidays and where they’re celebrated. NI stands for Northern Ireland, S for Scotland, W for Wales, and E for England. Everything unmarked is celebrated nationally.
It seems confusing, but it’s really not that bad.
|New Year's Day||January 1||Monday, January 1, 2018|
|2nd January (S)||January 2||Tuesday, January 2, 2018|
|Saint Patrick's Day (NI)||March 17||Monday, March 19, 2018|
|Good Friday||March 30||Friday, March 30, 2018|
|Easter Monday (ENIW)||April 2||Monday, April 2, 2018|
|Easter Tuesday (NI)||April 3||Tuesday, April 3, 2018|
|May Day Holiday||1st Monday in May||Monday, May 7, 2018|
|Victoria Day (S) |
City of Edinburgh only
|Last Monday before May 25||Monday, May 21, 2018|
|Spring Bank Holiday||Last Monday in May||Monday, May 28, 2018|
|Orangeman's Day (NI)||July 12||Thursday, July 12, 2018|
|Orangeman's Day (NI)||July 13||Friday, July 13, 2018|
|Summer Bank Holiday (S)||1st Monday in August||Monday, August 6, 2018|
|Summer Bank Holiday (ENIW)||Last Monday in August||Monday, August 27, 2018|
|Autumn Bank Holiday (S)||3rd Monday in September||Monday, September 17, 2018|
|Christmas Day||December 25||Tuesday, December 25, 2018|
|Boxing Day||December 26||Wednesday, December 26, 2018|
Making calls from the US
To call your UK business partners. first dial 011, the US exit code. Next dial 44, the country code for the UK. Then dial the area code (2–5 digits). And finally the phone number (4–8 digits) to successfully contact UK partners.
Etiquette for phone call is generally the same as in the US. Be polite, formal, and don’t use first names unless invited to do so. If the language barrier is thicker than you might’ve expected, feel free to ask your partners if they would politely repeat themselves.
Similarly, email etiquette is the same as in the US. Be polite, formal, and don’t embarrass yourself.
Traveling to the UK
Visas are not required for US citizens doing business in the UK and staying less than three months. All you’ll need is your passport, and your ticket. It’s as easy as that.
Since the UK’s exit from the EU, visitors can no longer apply for the Schengen visa to travel to nearby countries like France. Since the UK is basically made up of four separate countries, you might think that travel between them is complicated. It’s not.
Like traveling to England, all you’ll need is your passport. To travel to other areas once inland, all you’ll need is some money for the train. Or some good shoes.
Using a Cell Phone in the UK
In general it is recommended to buy a SIM card when traveling to the UK. These can be found at all major airports, and in convenience stores nearby. These SIMs will come with their own specific plans, loaded with certain amounts of data, calling minutes, and texts depending on what you’d like and how much you’re willing to pay.
Vodafone is still the most popular SIM in Europe, so they’ll be easy to find. You can also buy a SIM-less phone from Carphone Warehouse. These allow you to put your existing SIM into the phone, and hopefully run your existing plan. However, if you have an iPhone, you’re probably out of luck. Have you ever tried to take those things a part? Just get a SIM.
Internet is everywhere in the UK. You can buy a wifi dongle with a prepaid sim card in any mobile phone store on any network. The price is reasonable – about £15 (about 21USD) for the dongle itself, which include 1GB of data. Then you just pay for data packs (£7-10 per GB of data depending on the network).
Most hotels offer wifi, and even more cafes and restaurants do. Most small hotels include it into the price, larger ones charge for it. You might have to hunt around for the password, but generally employees are happy to give it up.
In the UK they’re a big fan of trade shows! They run throughout the year are a great opportunity for you to meet, connect, and get to know potential buyers, suppliers, importers, and exporters. They may just be your one-way ticket into the international industry you’re looking for.
|Careers in Hospitality||London||Spring||Assists hospitality recruiters to attract and retain the best staff|
|Fluid Power & Systems||Birmingham||Spring||Exhibition for hydraulics & pneumatic industries|
|Edie Live||Birmingham||Spring||UK’s leading energy & sustainability exhibition|
|Safety & Health Expo||London||Summer||Europe’s safety and health expo|
|The Light Show||Birmingham||Fall||UK’s only dedicated lighting trade event|
|Energy Management Summit||London||Fall||Sustainability summit in the UK|
The English can be very traditional. They’re formal, and like their business partners to be the same. You can easily ruin a potential business deal by being overly relaxed, too excited, or by having bad manners. Here are some specifics to help you get through.
Polite and Courteous
British people are typically very polite.
They maintain good posture and have what is called “a stiff upper lip,” which means they stay calm in the face of adversity or conflict. In other words, they don’t openly complain in public.
Sometimes international business people can find the British a little too polite. When asked for their honest opinion, people from the UK may resist providing negative feedback in public. It’s important to read between the lines to find out what someone really means or would like out of your meeting.
Moreover, this politeness also comes with a hint of reservation. Not only are Brits courteous and unwilling to reveal their true opinion, but they are also somewhat withdrawn. British people can be difficult to read and often hold their cards close to their chests.
Their gestures or expressions may lead you to believe they are in full agreement with you when exactly the opposite is true.
US businesses need to ensure that they are sending a clear message.There is no room for assumptions or hidden meanings that could be misinterpreted. This may sound a bit hypocritical, but it’s the best way to get negotiations moving along in the UK.
Out of politeness, your British partners may speak indirectly. They avoid commands in favor of suggestions. For example a senior business person might say “you can finish that later” when really he means you must finish it later. In a meeting, if a British importer/exporter says “that’s an interesting point, but…” they probably disagree with you.
It’s best to follow suit in this sense. Avoid outright telling someone what to do, or directly refusing an offer. This way you will appear accommodating to your UK partners, and not rude or arrogant.
British people are well-educated. Even service people often have good educations. For example, to become a London taxi driver, you must first pass a difficult test in the geography of the city. (After one visit to London, you’ll see why this might as well be an SAT.)
However, undergraduate degrees are seen as a basic requirement for a career. So, many UK business people put more emphasis on experience rather than academic achievement. No need to put your credentials on a business card.
This practice differs largely from other European countries where experience must be founded in a solid academic background. Thankfully, the UK cares more about your work than your book knowledge. No need to go back to school.
Privacy and Personal Space
The people of Britain value their privacy greatly.
Although people may appear to be open in public and will talk to strangers, personal space is highly valued in the UK. For example, people will often avoid sitting next to another person on public transit or may apologize if they touch someone accidentally. It is considered rude to put yourself in close proximity to the person you’re talking to.
The UK may be multicultural, but it’s not a melting pot. Expect people to acknowledge differences, especially with respect to nationalities.
The private nature of the British causes many people to be wary of making new friends, and business connections. If a US importer/exporter want to develop valuable relationships, professional or personal, they must be patient, as this can take more time than it would at home. But, ultimately, it’s worth it in any sense.
Humor and Banter
Humor is an essential part of British working culture.
Humor can often be sarcastic and self-deprecating, but is generally used to “lighten the mood.” Humor is often understated, which can make it seem that a British importer/exporter is serious when in fact they are only kidding.
Overtly, a British importer/exporter may say something that appears insulting, when in fact they are teasing. The best way to handle this situation is to reply in kind, and thereby develop a banter with your British counterpart, strengthening the relationship.
Generally, it’s nearly impossible to develop a thorough understanding of British culture during a short business trip. In order to develop a valuable business relationship with your UK counterparts, play the long game. Respect their privacy and politeness, and connect through shared interests.
Foreigners often find conversations in the UK to be shorter and about general topics such as the weather or your trip to Britain, which are popular icebreakers. British people like facts and are quite reserved. Let the conversation develop organically. Follow the lead of your potential business partner, and don’t inject topics that they may not be aware of.
British people do not use slang and don’t act overly familiar with people they just met. You must develop a relationship before you can use humor and banter with British people.
Most meetings will follow an agenda that has been distributed beforehand. Discussion will tend to stick to the agenda, perhaps with an informal chat of greetings at the beginning of the meeting. It is polite to take notes during the meeting.
Probably the most important and jarring thing to watch out for is UK business people’s tendency toward understatement. They tend to self-deprecate, and shy from openly saying something like it is. For example, your UK partner might say that a process is taking “a bit too long,” when they mean that it’s taking way too long.
Being aware of this is vital to furthering negotiations, and landing business deals in the UK. If you can recognize the underlying meaning behind these vague statements, not only will you be ahead of the competition, but your UK partners will greatly appreciate it. They don’t have to explain themselves, and they recognize that you’ve done your research. It’s a win-win.
They may speak our language and appreciate our culture, but business etiquette in the UK is not the same as in the US.
As a country made up of four countries (Ireland, England, Wales, and Scotland), it’s important not only to highlight differences from the US, but differences within the population. Be aware that some smaller regions within these countries can have unique cultural differences that could affect your negotiations. If you’re going somewhere off the beaten path, I suggest you do a little extra research just to be safe.
- Here’s a quick do’s and don’ts list that will make you a hit at nearly any business negotiation in the UK.
- Tea Time: You’re sure to be offered tea or another hot beverage at any business meeting. As per the stereotype, the British drink a lot of tea, and offer it as a kind gesture to guests. It’d be wise to accept, though not liking tea isn’t a death sentence.
- Be Right on Time: Punctuality generally important in all business situations. But, in the UK, it’s best to arrive right on time. The British value their time and consider it wasteful to show up to a meeting early. If the tram gets you there early, though, that’s alright too.
- Be Friendly but Get Down to It: The British prefer a bit of small talk and friendliness in business relations. But, when it comes to work, that’s all that matters. Personal relationships don’t affect business, so keep your private life private.
- Speak Properly: Though kind of stereotypical, it’s best to avoid slang or relaxed language in UK business. The English language is particularly honored in the country of its namesake, so respecting it and its speakers is best practice.
- Check Your Rank: Meetings in the UK are conducted depending on who’s attending. If you’re the same rank as everyone else, your opinions and ideas will flow freely. If there are executives present, be prepared to have a one-on-one.
The English appreciate a unique sort of humor and a unique way of doing business. It’s important that you’re aware of this when sitting down with English business partners.
You may find them to be very objective-based, and even emotionless in negotiations. This is starkly different from most European countries, which are focused on the relationship above all.
Similarly, it’s wise to avoid the famous European air-kiss greeting.
Although they aren’t the exact same, it may be best to treat business in the UK as though it was business in the US. There are certainly differences between the two, but it’s much more similar than many European countries.
The UK is widely considered a safe and easy way to enter trans-Atlantic markets for US businesses. No language barrier, similar business practices, and a historical trade relationship make the UK seem great for businesses large and small.
But as with any country, it has its faults, though legislators and business people alike are looking to resolve them.
For the larger business, these issues may not seem as problematic. But for the small business owner with limited funds and time, it’s better to know than to be caught off guard.
Regulations and Permits
You can breathe easy in the UK. The islands have no significant trade barriers or restrictions for incoming US goods. The only real restrictions (which were minimal to begin with) were imposed by EU Directives and regulations. Now, that’s not an issue.
The forms you’ll need are fairly standard and will be required by US customs when you export your goods. These include a commercial invoice, bill of lading or airway bill (depending on the shipment method), packing list, and insurance documents. You may need special certificates of origin, but probably not.
Importers to the UK no longer need to register for an EORI (Economic Operator Registration and Identification) number, as this is only applicable for goods entering the EU. However, international businesses do have taxes to pay.
VAT (Value Added Tax)
Value Added Tax or VAT is a goods and services tax levied in the UK by the government. VAT is an indirect tax because it is paid by the seller (or business) to the government rather than by the purchaser who ultimately bears the tax burden.
VAT is levied on most goods and services provided by registered businesses in the UK. The default rate is 20% but some goods and services are taxed at a reduced rate so it’s recommended you find out the rate for your specific product.
Importer of Record
The importer of record is the business responsible for (1) ensuring the imported goods comply with local laws and regulations, (2) filing a completed duty entry and associated documents and (3) paying the assessed import duties and other taxes on those goods. It is advisable that you ask the business in the UK to whom you are importing/exporting to take on this role.
However, if there’s no way around your company taking on the importer-of-record obligation, it means you will have to become VAT registered in the United Kingdom. You don’t actually have to be in the UK to do this, but you do have to comply with the regulations of being a VAT-registered company. Which means more paperwork, including periodic filings, even if you haven’t made any sales.
But, depending on how large your UK operations are or aim to be, you might be better off exploring this option regardless of the extra workload.
A final hurdle for your business will inevitably be paying your supplier, or receiving a payment from a potential buyer. The quickest and simplest solution we have to offer for this is to have your business make use of the services offered by Veem.
Veem is an international business to business payment company that offers a cheaper and quicker alternative to the traditional banking system. By using Veem, you avoid all of the fees and delays associated with going through banks. Moreover, instead of crossing your fingers and hoping it gets there in time, you can track your payment in real-time thanks to Veems integrated multi-rail technology.