Home of the Beatles, James Bond, Agatha Christie, fish & chips and tea & crumpets, the UK is also where you will find more than 5.6 million private sector businesses (99% of which have less than 50 employees), with a further 700,000 being started every year. So why do so many entrepreneurs start a business in the UK?
While the allure of the country’s cultural identity might be an influencing factor for some entrepreneurs, for many more, it's the strategic advantages, supportive business environment, common language - spoken by 1.4 billion people - and appetite for innovation that truly set the UK apart as an ideal location to start and grow your business.
Admittedly, the UK’s departure from the European Union in 2020 certainly shook international confidence in Britain’s ability to maintain a stable economy and accommodate seamless trade with its neighbours without an abundance of frustrating red tape. But the result has been a government - or series of successive governments - that is eager to entice new businesses to set up shop in a land of opportunity, painted red white and blue.
In Britain, businesses can enjoy a corporation tax rate of 25% (on profits over £250,000) - lower than that of Germany, France and Italy - alongside a suite of incentives aimed specifically at encouraging start-ups. It should, therefore, come as no surprise that the country is currently home to around 43 unicorn companies - startups which are valued at over $1 billion (approximately £804.25 million).
Related article: How European businesses can break into the UK market
Aside from government incentives and a lower tax burden, the UK demonstrates plenty of other advantages that will benefit your business if you decide to embark on an entrepreneurial endeavour there:
1. Its rich talent pool
For any new business venture, sufficient skills and experience are not only desirable but essential to successfully navigate the road to profitability, and overcome any challenges that might present themselves along the way. Without them, you may struggle to adapt to the landscape of modern business, where technical advancements, market fluctuations and consumer behaviours are constantly evolving.
Thankfully, the UK is home to a rich talent pool that can contribute towards the profitability of your organisation. Britain boasts the famous Oxford University, determined by Times Higher Education rankings to be the best university in the world, accompanied in the illustrious top-10 by two other UK institutions (Cambridge University and University College London). The rest of the top-10 spots all belong to American universities, which receive substantially higher levels of funding.
Because the standard of further education is so high in the UK, it is estimated that more than a third of people in England and Wales have a degree, a figure that has increased by six per cent since 2011. Furthermore, the number of people with zero qualifications is approximately 18%, far lower than the EU average of 33%.
However, it has to be acknowledged that not all businesses benefit from a potential employee with a degree. Apprenticeships are a popular alternative, providing on-the-job training, a specialised qualification, and a paycheck to boot. Their popularity continues to grow, with 70,700 people choosing this option for the academic year 2023/24, compared with the year before.
2. Its high innovation score
Every year, the World Intellectual Property Organisation (in partnership with Cornell University and the European Institute of Business Administration) publishes its Global Innovation Index, a report that ranks countries based on their capacity for, and success in, innovation. In the latest index, the United Kingdom came fourth with 62.4 points, behind only the United States (third, 63.5), Sweden (second, 64.2) and Switzerland (first, 67.6).
Experts believe that the UK scores so highly in this field because of its strong commitment to fostering a culture of innovation and entrepreneurship, fuelled by world-class research institutions, a vibrant startup ecosystem, and supportive government policies. Because innovation is often directly linked to economic prosperity, it is in the government’s interest to encourage businesses to cultivate new ideas, and take advantage of groundbreaking technologies.
As we mentioned in our introduction, the UK has 43 unicorn companies including Deliveroo, Monzo, BrewDog and Starling Bank. These companies underscore the UK's ability to nurture and support high-growth opportunities across various industries, from fintech and e-commerce to biotech and hospitality.
3. Its global inter-connectivity
The UK might be a small island nation, but its strong affinity with Europe and the rest of the world makes it one of the most internationally connected countries on the planet. According to DHL’s (the worldwide courier) Global Connectedness Report, the UK placed ninth with 68.7 points out of a possible 100, four places ahead of Germany, 11 ahead of Norway and a staggering 35 places in front of the United States of America. As with all reports, this one must be taken with a pinch of salt, but it is published to highlight countries with which trade is frictionless - or as frictionless as possible.
It would be difficult to deny that the UK’s departure from the European Union has dented some of that interconnectivity by introducing additional red tape around imports and exports. That being said, the UK continues to maintain strong ties with its European neighbours and the global community through bilateral agreements, trade partnerships, and diplomatic channels. Through initiatives such as the UK-Australia Free Trade Agreement, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and bilateral trade talks with countries such as the United States and Japan, the UK is forging new alliances and opening up new markets for trade and investment.
4. Its robust infrastructure
The backbone of any flourishing country is its infrastructure, facilitating the efficient movement of goods, people, and information across the country and beyond. To make that lofty ambition a reality, the UK has approximately 245,000 miles of paved roads, 20,000 miles of rail track, 144 airports, and more than 120 commercial ports. Whether you need to get from Land’s End to John o’ Groats or London to Lisbon, Britain’s infrastructure can serve your business well.
Related article: Guide to importing & exporting goods in the UK after Brexit
Aside from transport, the UK is investing significant sums of money in green energy - including £960 million announced in early 2024 - which will (it is hoped) help to lower the utility costs that have been squeezing the profits of European businesses. Openreach meanwhile has committed to deliver full fibre connectivity to 25 million homes and businesses by December 2026, with ambitions for complete coverage in most major towns and cities.
5. Its quality of life
We know better than anyone that starting a business in another country, even one that you might be familiar with, is a daunting prospect. In the UK’s case, that can be made easier by the high quality of life. According to Numbeo’s Quality of Life Index, the United Kingdom comes in at 29th - an admirable position for a country that sees rain for almost half the year!
Weather aside, the UK has a national health service that has been described as the envy of the world, a world-beating further education system (as established above), a language spoken by almost 20% of the earth’s population, a crime rate far lower than other similarly prosperous countries, and a happiness ranking of 20th (far ahead of the United States, Germany, Italy and Japan).
All of these things should help to put your mind at ease when you consider whether moving to the UK and setting up your business is right for you and your family. For more detailed information, go to our start a business in the UK page.
