London has been financing business activities for centuries and remains one of the world’s major centers for international trade and commerce.
London has been a global financial center ever since ships sailed out to populate the New World. In the 19th century, finance raised in London helped build the railroads that opened up the American west.[1]
Today, London’s reputation as a place where the world comes to trade is firmly established, as it remains the world’s largest foreign exchange center.[2] Over half (54%) of investors in the London Stock Exchange (LSE) are from overseas.[3] What makes London and the U.K. such a compelling destination for global investors and companies? In our latest Doing Business Internationally webinar, Aline Sternberg, director of Global Financial Markets, and Wenda Adriaanse, head of Corporate Services, U.K., explain the country’s time-proven appeal.
A history of financial service
The financial services sector—one of the most important drivers of the U.K. economy—contributes over GBP 430 billion in foreign direct investment (FDI).[4] Understandably, the U.K. government is keen to support it with a welcoming attitude to overseas investment.
The city’s reputation as an international financial hub is underpinned by robust legal and regulatory systems that have been copied across the world, and enhanced by London’s appeal as a global city of limitless opportunity. About 300 languages are spoken on London’s streets.[5] The Global Talent Competitiveness Index ranks the U.K. second for both the quality of its universities and its pool of global knowledge skills.[6]
To some extent, the city has simply made the most of its good fortune. English has become the global language of business, and the U.K. sits in a central time zone, which means it can trade with markets to the east and west in the same working day.
Choosing the right structure for doing business in the U.K.
For all these reasons, the U.K. is an attractive destination for overseas investors, and nowhere more so than in capital markets. The London Stock Exchange (LSE) is considered the world’s most international market for the trading of both primary and secondary equity and debt securities.
As far as company structures go, private limited companies are by far the most popular in the U.K., thanks to very low setup requirements. Their simplicity and flexibility mean they’re also a common choice for special purpose vehicles (SPVs) housing capital market transactions. Notes are issued to private investors, and only one issued share—value GBP 1.00—is required.
By contrast, public limited companies operating in capital markets issue notes to public investors and are listed on a regulated stock exchange, typically the LSE or the Irish Stock Exchange. They require 50,000 issued shares, a quarter paid up.
Limited liability partnerships (LLPs) and limited partnerships (LPs) are both available and are most commonly used for funds.
How CSC can help you do business in the U.K.
While the U.K. offers a light-touch regulatory environment, keeping these entities in good standing can still be a time-consuming task. For example, deadlines for financial statements are strict, and it’s also considered good governance to hold at least two board meetings a year. In addition, the U.K.’s tax advantages, including a wide network of double tax avoidance treaties, can only be accessed by compliant organizations that meet substance requirements.
In all these matters, CSC can help. We offer an end-to-end service for companies, funds, and SPVs in the U.K., from entity formation and accounting to a full suite of corporate secretary, substance, and other legal services. We provide tailored capital market services, giving you the option to completely outsource all SPV obligations across a variety of asset classes. Our team has experience of deals using orphan SPVs and those that sit within a wider corporate group.
The U.K. is a highly regarded location for doing business. CSC helps you make the most of its vast potential.
Why CSC?
CSC offers a full suite of corporate services in the U.K., from entity formation to winding up services, and everything in between.
CSC provides knowledge-based solutions for every phase of the business life cycle, helping businesses form entities, maintain compliance, execute transaction work, and support real estate, M&A, and other corporate transactions in hundreds of U.S. and international jurisdictions.
We work with some of the world’s largest banks and commercial lenders to reduce risk in their lien portfolios, improve their transaction speeds, and create a secure environment for their financial processing needs. We also provide solutions for secure real estate document preparation and recording.
We are the trusted partner for 90% of the Fortune 500®, nearly 10,000 law firms, and more than 3,000 financial organizations. Headquartered in Wilmington, Delaware, USA, since 1899, we are a global company capable of doing business wherever our clients are—and we accomplish that by employing experts in every business we serve. Missed this webinar? Watch it on demand and register for the full series here.