UK Trade & Investment handbook for overseas law firms interested in setting up a UK office.

1. Setting up in the UK
A handbook for overseas law firms

2. Contents
The UK: A Destination for International Business 4
The UK: the Best Choice for International Law Firms 6-7
Global Reach: International Dispute Resolution 8
Introduction to the Legal System 9-10
The Legal Profession in England an Wales 11-14
Practising Law in England and Wales 15-17
Practice Issues for Foreign Lawyers in England and Wales 18-22
Becoming a Solicitor of England and Wales 23-24
Opening Offices of your Law Firm in the UK 25-29
Complying with UK Business Laws and Regulations 30-33
Employment in the UK 34-39
Immigration to the UK 40-41
Useful Contacts 42-44

3. I am delighted to introduce this handbook and to commend the work that
UK Trade & Investment and their partners are doing to help lawyers from
overseas who are thinking of working in the UK.
The Ministry of Justice is committed to supporting the UK legal service sector.
It may therefore seem counter-productive for me to welcome a handbook that
gives foreign lawyers practical advice on how to work in the UK. Some might
think that the Ministry of Justice’s role should be to protect our lawyers from
foreign competition and to concentrate on helping UK lawyers to find work.
In fact, much of the success of the legal sector in the UK is due to the
international nature of the legal service market. London is home to hundreds
of foreign law firms from all over the world. The presence of lawyers and law
firms from the US, the rest of Europe, and increasingly from Asia, creates a rich,
diverse landscape where advice is available in multiple jurisdictions. Such an
atmosphere helps us to learn from each other – to share best practice and to
develop new ways of doing business. The UK experience is that competition has
led to innovation and growth. The foreign law firms in London have helped the
UK to become a truly international centre for legal services.
Whatever your plans – to develop contacts in the UK, to work here for a time,
or to make the long-term investment of opening an office here, I hope you will
enjoy the unique atmosphere of the UK’s legal world and contribute your own
particular skills and knowledge to it.
Suma Chakrabarti
Permanent Secretary, Ministry of Justice
3

4. England and Wales is open for legal business. We welcome lawyers from
other jurisdictions to our shores, whether on a temporary or permanent basis,
whether they want to practise as lawyers under their home title or whether they
want to requalify as English solicitors. We take this approach because we know
that lawyers from other countries who come here will bring new opportunities
with them. They either come with their clients, who will inevitably have other
legal needs which they will need the domestic profession to satisfy; or they
come with new expertise which enhances this country’s reputation as an
unrivalled hub for legal advice. As you will see from the contents of this useful
handbook, our regime for foreign lawyers is both flexible and light-touch.
The benefits to the profession in England and Wales of an open legal market
have been considerable. Over a quarter of our law firms earn fee income
from international work – serving clients from abroad in the UK or vice versa.
An estimated 40,000 legal jobs have been created by financial and legal
liberalisation since the late 1980’s and four English law firms are now in the
world’s top ten, compared to twenty five years ago when there were no English
law firms in the world’s top 100. Opening up to the world has made law firms in
England and Wales both innovative and globally competitive. We look forward
to welcoming more of the world’s best lawyers and law firms to the UK and the
Law Society of England and Wales is here to assist in any way it can.
Robert Heslett
President, Law Society of England and Wales
4

5. The UK: A Destination for International Business
The UK Government welcomes and The UK is at the heart of European
supports overseas companies in business and many corporations have
establishing themselves and investing set up their European headquarters
in the UK. The UK is one of the largest in the UK. The European Union is one
recipients of foreign direct investment of the largest single markets globally
(FDI) worldwide and the Government with 492.8 million residents and it
actively encourages foreign makes strategic sense for companies
businesses to set up in the UK. from elsewhere in the world to
establish a presence in the UK
There are few restrictions on FDI to access the European market.
into the UK and it is possible to invest
in almost any sector. Moreover, a Foreign entrepreneurs and companies
transparent tax regime, the familiarity are increasingly making use of the
of the English language and, in some dynamic and international business
cases, similar legal and accounting climate that is to be found in the UK,
systems makes the UK an appealing as well as a highly skilled workforce.
destination for law firms from across In spite of testing economic conditions,
the globe. acquisitions of UK businesses by
foreign owners totalled £31 billion,
The UK’s regulatory environment in 20091.
has been designed to be supportive
of the needs of both business and
the investor community. Regulations
in the UK are generally developed
in consultation with the business
community and are transparent,
easy to understand and encourage
investment and healthy competition.
Foreign-owned companies are treated
in the same way as their domestic
counterparts with very few restrictions
on foreign ownership and no
limitations on the free flow of capital.
1
Office of National Statistics – Statistical Bulletin: Mergers and Acquisitions of UK Companies Q4 2009
5

6. “The ever changing international FoxMandal Little, India’s largest and
market and the demands of oldest law firm, recently set up their
servicing and retaining a global office on King Street in the city of
client base necessitates lawyers London because they understood
being able to access consistent that a city location could lead to
high quality advice quickly and new opportunities for the firm.
seamlessly. For an international law
firm seeking to expand its business Ajit Mishra of FoxMandal Little
footprint into Europe, access via stated: “As India’s largest law firm,
the UK is an ideal route. There we saw expansion into the City of
are compelling business merits in London as a natural step. London is
having either a presence in the UK the world’s leading financial centre
as a stepping stone to Europe or, and foreign firms are attracted here
alternatively, forming an alliance to take advantage of the global
with a UK law firm as a way of opportunities present here.
accessing Europe.
”We set up our branch office here
“At Nabarro our international alliance in the city to work with UK and
has helped us win and retain EU companies both looking to
international clients. Many UK invest in India and also to guide
firms benefit from a “best friends” Indian companies while setting up
relationship with international firms operations in the UK. In the UK we
and undertake joint promotions, practise only Indian laws but when
branding and marketing.” Indian companies target the UK as
their place of business, through our
Ian Binnie extensive network and knowledge
Partner, Nabarro of the market, we introduce them to
appropriate law firms, accountants,
bankers and organisations such as
the City of London, Think London,
the UK India Business Council and
UK Trade & Investment.”
Ajit Mishra
Partner, FoxMandal Little
6

7. The UK: the Best Choice for International Law Firms
The UK is a leading international law
centre, home to three of the four largest “London is a legal hub as well as a
law firms in the world (measured by business gateway to Europe and the
fees) and playing host to hundreds world. Our clients are increasingly
of law firms from other jurisdictions. international in outlook, and it
Contributing £14.9 billion to the UK’s made perfect sense for the firm
GDP, the sector employs around 145,000 to be where its clients need it to
solicitors and 19,000 barristers. be. Merging with one of the most
cosmopolitan law firms in London
UK firms feature prominently in The provided McGuireWoods with
Global 100, a list of the top 100 firms a unique opportunity to expand
compiled annually by Legal Business internationally – its London lawyers
and The American Lawyer. A record are qualified in 12 jurisdictions,
total of 17 UK firms were listed in speak 24 languages and the firm
the top 100 in 2008. These firms
has key connections in 120 cities
spread across 50 countries.”
generated 20.5 per cent of the top
100’s total revenue. UK firms are also
Bengt Grundberg
among the biggest in the world, with Manager of European Marketing
four out of the top six places in terms McGuireWoods London LLP
of the numbers of lawyers employed.
The strength of the UK as an
international centre for legal services
is reinforced by the expertise of
barristers involved in international
practise. Over 1,000 members of
the Commercial Bar Association
practise in the field of international
commercial law, with many cases
heard in the Commercial Court.
7

8. Market Opportunities Law firms from other countries
International law firms in London England and Wales are very open and
have grown significantly in recent allow virtually unrestricted access for
years. Based on gross fees, three foreign law firms. There are hundreds
out of the largest four firms in the of foreign law firms in London, many of
world are international law firms which have capability in both English
based in London. law as well as their home country law.
International law firms based in They may operate as full service
London are leading advisers in deals firms or specialist or niche firms in a
taking place in international capital particular area of law. Often foreign
markets. They offer a substantial law firms in London will service clients
range of services. Other smaller firms from their own jurisdictions looking
offer expertise in certain services to invest into the UK and continental
such as shipping or international Europe, as well as servicing the needs
insurance, being world leaders in of UK, and Europe-based corporations
their own niche practice. and financial institutions undertaking
business in the country from which
they originate.
Law firms from a wide range of
jurisdictions have found it beneficial to
have offices in the UK, including most
European countries, Russia, China,
Kazakhstan, Australia, Canada, South
Africa, Ghana, Brazil, India and many
from the United States of America.
8

9. Global Reach: International Dispute Resolution
English law is, like the English Since 1895 the High Court has
language, commonly used in incorporated a separate Commercial
international commerce and Court where the procedures are geared
international dispute resolution. to reflect the special requirements
More international and commercial of the international commercial
arbitrations take place in London community. The international standing
than in any other city in the world, of the Commercial Court is such that
and 90 per cent of commercial cases around 80 per cent of the claims
handled by London law firms involve brought to the Commercial Court involve
an international party. overseas parties and, in around 50 per
cent of cases, there is no link to London
Up to 9,000 international disputes except for the parties’ choice of London
a year take place, mostly by for dispute resolution. Between 1,500
institutions such as the International and 2,000 cases are started every year,
Chamber of Commerce, London of which around 5-10 per cent typically
Court of International Arbitration, go to trial.
Chartered Institute of Arbitrators,
the Centre for Effective Dispute The biggest dedicated business court
Resolution and the London Maritime in the world is due to open in 2010.
Arbitrators Association. The new Business Court will match
and maintain London’s world-class
The International Dispute Resolution reputation as the first choice for
Centre is the largest of a number business law. For the first time, the
of specialist centres developed in specialist jurisdictions of the High
London in recent years for hosting Court dealing with business disputes
the resolution of disputes. It opened will be brought together under one
in 2000 and in 2004 had to move to roof. The new “super court” – believed
larger premises due to the strength to be around four times bigger than
of demand. its nearest competitor – will provide
29 courtrooms, 12 hearing rooms
(for related work such as bankruptcy
hearings), 44 public consultation
rooms, waiting facilities for parties
involved in proceedings, as well as
administrative office space for court
staff and judicial accommodation.
9

10. Introduction to the Legal System
The United Kingdom of Great Britain The Court system in England and Wales
and Northern Ireland contains three The Supreme Court is the final court
different legal jurisdictions: England of appeal for all United Kingdom
and Wales, Scotland and Northern civil cases, and criminal cases from
Ireland. Each of these has its own England, Wales and Northern Ireland
court system and legal professions; and hears appeals on arguable points
and in the case of Scotland, a of law of general public importance.
different legal system which is
influenced by Roman or Civil law. Within England and Wales there
are separate court systems dealing
Further information of the legal with criminal and civil cases. The
systems of Scotland and hierarchy of the English and Welsh
Northern Ireland can be found at courts below the Supreme Court is
www.lawscot.org.uk and as follows:
www.lawsoc-ni.org respectively. The Court of Appeal, which consists
of two divisions:
The civil division which hears
appeals from the High Court.
The criminal division which hears
appeals from the Crown Court.
The High Court, which is divided
into:
The Queen’s Bench Division
(dealing with contract and tort
issues as well as admiralty and
commercial court matters).
The Chancery Division (dealing
with estates, mortgages, trusts,
partnership and bankruptcy issues).
The Family Division.
10

11. Introduction to the Legal System (continued)
The Administrative Court (formerly Impact of the European Union on
known as the Crown Office) deals English Law
with a range of cases including The UK joined the European Economic
Judicial Reviews and statutory Community (now the European
appeals and applications. Union) in 1973, since when it has
been a requirement to incorporate
Crown Court (local criminal courts European legislation into UK law and
and appeals from Magistrates courts) to recognise the jurisdiction of the
County Courts (local civil courts) European Court of Justice (ECJ)
Magistrates Courts (criminal and in matters of EU law.
some family cases).
Human Rights Act
The Commercial Court (a specialist The UK is a signatory of the European
part of the High Court) sits in London, Convention on Human Rights and this
but judges with commercial expertise has now largely been incorporated
also sit in Birmingham, Bristol, Leeds into UK law with the passing in 1998
and Manchester. of the Human Rights Act, which
requires judges in domestic courts to
apply the provisions of the European
Convention on Human Rights directly
in those courts.
11

12. The Legal Profession in England and Wales
The UK’s legal profession is split For companies, solicitors may
into two main types: solicitors and draw up contracts and partnership
barristers (advocates in Scotland). agreements, and assist in all the
stages of a company’s life from
The distinction between the two has its formation onwards, including
been eroding over time but the main purchase and sale of major assets,
difference is that solicitors provide mergers and acquisitions, handling
continuous services to clients whilst disputes, employment tribunals and
barristers act as sources of specialist competition enquiries through to
legal advice on particular points liquidation or take-over.
of law, or as advocates in courts,
arbitrations and mediations. For private individuals, solicitors’
work ranges from handling property
Solicitors transactions, tax planning, dealing
The work of solicitors is highly varied. with wills and probate issues,
They advise and represent clients handling divorce, insurance claims
of all shapes and sizes – whether and other types of civil dispute.
governments, companies
or individuals. There are also solicitors who
specialise in criminal and other types
For governments, solicitors may of legal aid work eg immigration and
undertake a wide variety of work, family law cases.
from acting as advisers on issues
such as employment, public The majority of solicitors work in
procurement and public international private practice for firms of solicitors.
law, to representing the UK These firms range in size from big
government in the courts. City firms with thousands of lawyers
working for them to sole practitioners
who have traditionally been found
on the high streets up and down
the country. Nearly 40 per cent of
solicitors work for the top 100 firms.
12

13. The Legal Profession in England and Wales (continued)
Solicitors are increasingly becoming ICT, creative and media – UK law
more specialised and focusing firms have a depth of experience
on specific areas of law and legal and specialisms in new media and
practise. However, around 10-15 telecommunications unrivalled around
per cent are generalists working in the world. Telecommunications
smaller high street practices and as transactions are frequently governed
sole practitioners. by English law and disputes are
often subject to resolution before the
Sectors where UK solicitors have English courts or through arbitration
particular expertise include: in London.
Financial services – UK law firms’ Energy and renewables – Much of
expertise in this sector has developed the lending for significant projects is
in parallel with the growth of the City led by international lenders operating
of London as a leading international from the City of London. UK law firms
financial centre. Financial services have good links with these lenders
are a global business and the UK’s and regularly advise on risk analysis
global law firms have the capability and the development of loan and
to deliver legal advice in multiple security documentation for projects.
jurisdictions and on multiple
disciplines. London law firms have Transport – aviation, rail and shipping
also developed expertise in new – the UK has particular experience in
areas of financial services such as these areas drawing on its international
Islamic finance. status as an insurance and dispute
resolution centre. Worldwide, English
law governs 75 per cent of all shipping
contracts and 90 per cent of all
shipbuilding contracts.
13

14. Competition Law – UK competition Until recently, barristers in private
lawyers have a reputation for being practice had to work as sole
practical and commercial in their practitioners, although often working
approach. The training regime for UK collectively in chambers. The sole
lawyers which allows individuals who practice rule exists in order to ensure
have not studied law at undergraduate that access to barristers is not limited
level at university to convert to the law, by conflicts of interest. As sole
helps to bring in expertise from other practitioners, barristers in the same
sectors (eg in economic analysis) chambers can work on different sides
that is frequently a critical element of the same case. Since November
of competition advice. 2009, barristers have also been able
to join a Legal Disciplinary Partnership
Barristers (LDP) and thereby partner with other
Barristers in England and Wales form legal professions as well as up to
a corps of specialist consultants 25 per cent of non-lawyer managers.
with particular expertise in advisory,
drafting and advocacy work. There
are slightly more than around 12,200
individuals in private practice with
the Bar. Around 3,000 are employed
as in house lawyers offering legal
advice to their employers or in
firms of solicitors. Barristers in
private practice are generally used
for providing advice on complex
questions of law or litigation which
are outside the normal expertise of
solicitors and for advocacy in court or
alternative dispute resolution.
14

15. The Legal Profession in England and Wales (continued)
The Bar contains individuals with Regulation of solicitors and barristers
expertise in all areas of the law. Many Following the entry into force of the
will also have knowledge of other Legal Services Act 2007, the Law
systems of law and be able to advise Society and the Bar Council are
on complex international questions. both designated frontline regulators
Although barristers no longer have a with overall responsibility for the
monopoly on the right to appear in the regulation of solicitors and barristers
superior courts (The Crown Court, High respectively. Both professional bodies
Court [all divisions], Court of Appeal have independent regulatory arms
and Supreme Court), in practice the within them known respectively as the
bulk of advocacy in those courts is Solicitors Regulation Authority and the
undertaken by barristers. Barristers Bar Standards Board. The Solicitors
also frequently have rights of audience Regulation Authority, within the Law
in other common law jurisdictions (or Society, sets standards and oversees
can obtain them on a case by case the application of rules and disciplinary
basis) and in the courts of the EU arrangements governing the practice
institutions and Member States as of solicitors. The Bar Standards Board
well as in international tribunals. performs the same functions for
barristers. However, qualification rules
Barristers can be instructed directly and discipline for the bar are governed
by foreign lawyers. If a solicitor’s firm jointly by the Bar Council and the Four
is needed, a barrister will be able to Inns of Court. The Legal Services
advise on which solicitors are best Board acts as an oversight regulator
for the job. for all legal services.
An Office for Legal Complaints was
established from the beginning of 2010
to handle service complaints from the
public about legal service providers.
15

16. Practising Law in England and Wales
Your Options Some of these above-mentioned
England and Wales, and London in reserved areas are also open to other
particular, is one of the world’s most UK legal professions (notaries, licensed
cosmopolitan legal environments and conveyancers, etc) and, under certain
is home to lawyers from nearly a conditions, to lawyers qualified in the
hundred jurisdictions. They practise European Union (EU), the European
English law, European law, public and Economic Area (EEA)2 and Switzerland.
private international law, and the law Special rules also apply for all persons
of their state/jurisdiction of origin to seeking to offer financial advice or
provide a local and global service for immigration and asylum advice.
their clients.
The purpose of these limitations is
It is not necessary to be a solicitor, simply to protect vulnerable members of
barrister or other recognised society and the public interest in the good
professional to practise law in England administration of justice through the courts.
and Wales. Legal practitioners do not
have to be British nationals. Anyone is Lawyers from other countries can
free to offer legal advice and services in practise law in the UK subject to the
England and Wales, with the following above reservations. Lawyers from other
restrictions: countries can practise English law, as
Only those duly qualified and well as the law of their own country, in
certificated as solicitors or barristers in any of the following ways:
England and Wales can call themselves As a sole practitioner.
by those titles. As a Registered European Lawyer
Certain limited areas are reserved (NB: This status is only required of
to nationally qualified solicitors and lawyers practising in the UK under
barristers. These areas include the title of another EU/EEA jurisdiction
the exercise of a right of audience, or Switzerland and under conditions
conducting litigation, certain of citizenship).
reserved instrument activities In a partnership of foreign lawyers.
(including the conveyancing of land As an assistant or consultant in a law
and property), probate (succession) firm of any jurisdiction.
activities, notarial activities and the
administration of oaths.
The European Economic Area is the 27 countries of the European Union plus Iceland, Liechtenstein and Norway
2
16

17. Practising Law in England and Wales (continued)
In partnership with English solicitors Foreign lawyers who hold a dual
and/or Registered European qualification as English solicitors must
Lawyers (but only if registered with comply with the same professional
the Law Society as a “registered rules and obligations as those whose
foreign lawyer” or a “registered first qualification was as an English
European lawyer”). solicitor. If they wish to hold a
In employment with English solicitors. current practising certificate which
In employment as an in-house lawyer allows them to hold themselves out
(eg in the legal department of a as a Solicitor of the Senior Courts of
commercial company). England and Wales, they must have
professional indemnity insurance
Alternatively, a foreign lawyer may to the prescribed level of minimum
re-qualify as an English solicitor cover and, if practising in the UK, must
or barrister. contribute to the compensation fund
and fulfil annual requirements for
Requalification continuing professional development.
Subject to complying with the relevant The solicitor’s practising certificate
training requirements, a foreign is renewable annually in November
lawyer may seek to be admitted as and requires payment of an annual
a solicitor or be called as a barrister registration fee and the completion
in England and Wales. It is not of a registration form available from the
necessary to have British nationality Solicitors Regulation Authority (SRA).
to qualify or practise as a solicitor or
barrister, but normal immigration Professional Title
requirements would apply in respect Section 21 of the Solicitors Act 1974
of training, practise or employment. prohibits an unqualified person from
taking or using any name, title or
Lawyers from other countries wishing description implying that he/she is
to sit the requalification examinations, qualified to act as a solicitor. The object
run by the Law Society or Bar Council, of the following guidelines (which are
should check the latest requirements obligatory in the case of the notepaper
for their jurisdiction with those of Registered European Lawyers [RELs],
organisations (see contact details at and of foreign lawyers practising
the back of this handbook). together with solicitors or RELs) is to
17

18. inform members of the public of the As noted above, lawyers in England
status of the foreign lawyer concerned and Wales do not have a monopoly
in a way that distinguishes foreign of legal services. Subject to the
lawyers from members of the local restricted (reserved) areas of work,
profession. This avoids the inadvertent foreign lawyers in England and Wales
commission of a criminal offence, or are free to practise the law of their
of unfair trading practices. choosing including English law.
However, no lawyer should undertake
Foreign lawyers from non-EU work unless it can be handled
jurisdictions should describe themselves promptly and with due competence.
on office stationery, business cards,
nameplates and in all communications Registration with the Law Society
and publications (including law lists, Unless they wish to enter a
telephone, telex and street directories, multinational partnership or multi-
professional journals and conference national corporate practice with
brochures) either by their own solicitors and/or registered European
untranslated professional title or by Lawyers, with foreign lawyers
the word “lawyer”, together with a practising in England and Wales do
reference to the country or jurisdiction of not have to register with the Law
their qualification. Society or notify the Law Society of
their presence.
Rules of Professional Conduct
Foreign lawyers establishing offices The Law Society International Division
or providing legal services in England Any foreign lawyer, wherever based,
and Wales are expected to observe may apply to join the Law Society’s
the standards which apply to the legal International Division on payment
profession in England and Wales. of an annual fee. The status does
This is so whether or not the rules of not confer any professional title but
conduct and disciplinary procedures provides information, networking and
of the foreign lawyer’s home Bar business promotion opportunities to
apply to practise. Observing ethical its members.
standards means acting as befits a
lawyer, rather than complying with all
local rules.
18

19. Practice Issues for Foreign Lawyers in England and Wales
In common with most jurisdictions, Other foreign lawyers do not have
certain types of legal work in England rights of audience in the courts, or
and Wales are reserved to solicitors, the right to conduct litigation. Lawyers
barristers or other recognised from other countries may however
professionals. The reserved areas apply to the Chairman of the Bar
of legal work include the exercise Council for permission to appear in
of a rights of audience, the conduct the English courts on an ad hoc basis
of litigation, certain reserved where a matter from their jurisdiction
instruments (including for the is concerned.
conveyancing of land and property
and the drawing of trust deeds for the In most tribunals (such as employment
disposal of capital), the preparation tribunals), there are no restrictions on
of applications (or opposition to the rights of audience. However, this does
application) to administer a deceased’s not apply to the Employment Appeals
estate, notarial activities and the Tribunal or the Solicitors’ Disciplinary
administration of oaths. Tribunal, which are equivalent to
courts. Nor does it apply to Immigration
Lawyers from the EU, EEA and Adjudicators or the Immigration
Switzerland, whether they are Appeals Tribunal, where rights of
established in England and Wales audience are restricted to solicitors,
or practising on a temporary basis, barristers and legal executives qualified
have general access to all areas of in this jurisdiction; European/EU and
practice reserved to solicitors and/ EEA lawyers; and persons (including
or barristers. They must however foreign lawyers) who are registered
appear in courts in conjunction with with the Office of the Immigration
a local lawyer and can only practice Services Commissioner.
conveyancing and/or probate activities
in England and Wales if these activities There is no restriction on rights to
are not reserved to a specific notarial represent parties at arbitrations
profession in their home state. conducted in England and Wales.
19

20. Land and Succession Financial Services
The Solicitors Act 1974 reserves the Under the Financial Services and
following activities to solicitors and Markets Act 2000, the Financial
other specified professionals: Services Authority (FSA) is the
Drawing or preparing any instrument regulator for investment business.
of transfer or charge for the purpose Solicitors and “registered European
of the Land Registration Act 1925, or lawyers”, and their partners, are
making any application or lodging any permitted to carry on certain
document for registration under that categories of investment business
Act at the Land Registry. without authorisation from the FSA.
Drawing or preparing any other Other foreign lawyers will require
instrument relating to real or authorisation if they are to do any
personal estate, except a will or investment business.
other testamentary instrument, an
agreement not under seal, a letter Immigration advice and
or power of attorney, or a transfer immigration services
of stock containing no trust Under the Immigration and
or limitation. Asylum Act 1999 the Office for the
Drawing or preparing papers on which Immigration Services Commissioner
to found, or oppose, a grant of probate (OISC) is the regulator for immigration
of a will or of letters of administration advice and immigration services.
of the deceased’s estate. Foreign lawyers who are partners or
employees of solicitors; European
Registered European Lawyers from lawyers registered in the UK under
countries in which probate and the Establishment Directive and their
conveyancing are not activities partners and employees; and other
reserved to a separate legal profession EU lawyers and their employees;
(eg notaries) can also practice the are permitted to provide immigration
above-mentioned activities in England advice and immigration services
and Wales. without registering with OISC.
Other foreign lawyers will have to
be registered with OISC if they are
to provide immigration advice or
immigration services.
20

21. Practice Issues for Foreign Lawyers in England and Wales (continued)
Foreign lawyers practising with Following the adoption of the Legal
solicitors in England and Wales Services Act in 2007, new forms of
English solicitors may practise in practice are becoming available in
partnership or corporate practice England and Wales. Since March
with foreign lawyers who are 2009, Legal Disciplinary Practices
registered with the Law Society as (LDPs) enable solicitors, barristers and
registered foreign lawyers (RFLs) or other UK legal professionals as well
as registered European lawyers (RELs). as European and Registered Foreign
lawyers and up to 25 per cent of non-
A partnership of solicitors (and/ lawyer managers to practice together.
or RELs) and registered foreign
lawyers is known as a multi-national In 2011-12, Alternative Business
partnership (MNP). The rules of Structures (ABSs) will be introduced,
conduct applicable to solicitors apply thereby enabling new forms of non-
also to an MNP. An MNP can employ lawyer involvement in legal practices.
practising solicitors and RELs.
Employment of an English/Welsh
A mixed corporate practice is also solicitor by a Foreign Lawyer
permitted between solicitors (and/or The professional rules by which
RELs) and registered foreign lawyers. solicitors in England and Wales are
Such a corporate practice can be bound prevent a practising solicitor
either a company or a limited liability employed by a foreign (non-European)
partnership (LLP). Under a new lawyer or a foreign law firm to
regime which introduced firm-based provide legal services in some of the
regulation from 31 March 2009, all above-mentioned reserved activities,
partnerships which contain English including the exercise of a right of
solicitors need to be recognised by audience, conducting litigation or
the Solicitors Regulation Authority providing any immigration advice
(SRA), regardless of whether they are or immigration services (unless
a company or partnership. the employer, or a senior fellow
employee, is registered with the
Immigration Services Commissioner).
21

22. The restrictions noted do not apply to Other Professional Arrangements
employment of a solicitor by an MNP, Foreign lawyers, wherever based,
or by a “recognised body”, or by RELs, are entitled to enter into professional
or if the solicitor is practising abroad. arrangements with solicitors. Rules
They are also currently under review 8 on fee-sharing and 9 on referrals
by the Law Society. of business in the Solicitors’ Code of
Conduct and the home rules of foreign
Employment of Foreign Lawyers lawyers, if relevant, will govern
by Solicitors these arrangements. Specifically, the
Subject to their home rules, foreign Solicitors’ Practice Rules provide that:
lawyers may practise in the A foreign lawyer may enter into
employment of solicitors, RELs, an arrangement with a solicitor to
MNPs or recognised bodies. introduce clients to the solicitor.
A solicitor may agree to refer
Sharing of Facilities clients to a foreign lawyer.
The sharing of facilities in solicitors’ A solicitor may agree to share his
offices by a foreign lawyer and the professional fees with a practising
appearance of a foreign lawyer’s lawyer of a jurisdiction other than
name as a consultant or as an England and Wales.
associated practice on a solicitor’s
professional stationery or name plate Professional arrangements with
or brochure is permissible, but the foreign lawyers that are part of an
foreign lawyer must not be improperly entity where a controlling majority
held out as a partner or held out as a of the owners and managers are
solicitor, or as qualified to act non-lawyers could still be possible
as a solicitor. The solicitor will have under the conditions set out by Rule
an obligation to ensure that any 8, but not in the context of European
sharing of facilities will not give rise Cross-Border Practice (Rule 16).
to a breach of client’s confidentiality
and to ensure compliance with the
Solicitors’ Practice Rules.
22

23. Practice Issues for Foreign Lawyers in England and Wales (continued)
Relations between foreign lawyers Alternative Business Structures will
and barristers be introduced from around 2011-12.
The rules for foreign lawyers in These structures will allow any forms
Chambers in England and Wales are of non-lawyer involvement in a law
set out in Annex H of the “Code of firm, including up to 100 per cent
Conduct for the Bar of England and non-lawyer ownership of a law firm,
Wales”, issued by the Bar Council. subject to the satisfaction of various
“fitness to own” criteria.
The Future of Structures of the
Provision of Legal Services in Further details can be obtained from
England and Wales the Legal Services Board at
In October 2007 the Legal Services www.legalservicesboard.org.uk
Act became law and this new piece of
legislation is paving the way for some
potentially radical changes in the way
in which legal services can be delivered
in the UK. The Act permits the following
new forms of legal structure:
Legal Disciplinary Practices – which
were introduced in March 2009 and
which allow solicitors, barristers, other
UK and foreign legal professions and up
to 25 per cent of non-lawyer managers’
participation in a legal partnership.
23

24. Becoming a Solicitor of England and Wales
If you wish to call yourself a Solicitor of 3. Meet character and suitability
England and Wales, and to practise the requirements which will include the
reserved areas of law you will need submission of references.
to requalify. Until 2011, the Qualified
Lawyer Transfer Regulations (QLTR) Experience Requirement
are in force. These will be replaced Qualified lawyers from outside the
with new regulations from around the European Union, the European
beginning of 2011 which will introduce Economic Area and Switzerland are
a new test regime and open this to a required to show that they have gained
wider number of non-European and two years experience of working
non-common law jurisdictions. in legal practice in a common law
jurisdiction. At least one year must have
At present the QLTR allows certain been gained by practising the law of
overseas lawyers and other UK England and Wales. Such experience:
qualified lawyers to become must have been undertaken in three
solicitors in England and Wales. areas of common law, and
must have covered contentious and
There are three basic requirements non-contentious areas of practice.
that applicants applying under the
QLTR are required to meet (depending Qualified Lawyers Transfer Test
on which primary jurisdiction that they The Qualified Lawyers Transfer
are qualified in) before they can apply Test is a conversion test. It enables
for admission as a solicitor of England lawyers who are qualified in certain
and Wales. jurisdictions outside England and
Wales (and barristers of England
1. Pass as many “Heads” (or individual and Wales) to qualify as solicitors
examinations) under the Qualified in England and Wales.
Lawyers Transfer Test as required.
2. Satisfy a two year legal experience The test covers four heads
requirement of which at least one year (subject areas):
must have been gained by practicing Head 1 – Property
law in England & Wales (this does Head 2 – Litigation
not apply to lawyers qualified in the Head 3 – Professional Conduct
EU/EEA and Switzerland on conditions and Accounts
of citizenship). Head 4 – Principles of Common Law
24

25. Becoming a Solicitor of England and Wales (continued)
The requirements for different Before applying for admission as
jurisdictions vary depending on a solicitor in England and Wales,
an assessment of how closely qualified lawyers are required
the qualification requirements to obtain a satisfactory standard
in those countries and the type disclosure from the Criminal Records
of law studied mirror the English Bureau, which includes details of
requirements. More detail can be any current and spent convictions,
found on the Solicitors Regulation police cautions, reprimands and final
Authority website. warnings held on the Police National
www.sra.org.uk Computer. They also make use of
overseas criminal records information
Specification and Providers services whenever appropriate.
The SRA sets the Qualified Lawyer Failure to disclose convictions and
Transfer Test specification. The other issues at the certificate of
assessment is administered exclusively eligibility stage or subsequently is
by SRA-authorised test providers. For a serious matter and may result
details of test programmes and venues, in refusal of your application for
you must contact test providers admission as a solicitor.
directly. Before you arrange to sit the
appropriate head(s) with a test provider, Further information, including details
you must apply to the SRA for a of test providers, is available on the
certificate of eligibility. Solicitors Regulation Authority website.
www.sra.org.uk.
Character and Suitability
Qualified lawyers are also required
to show that they are suitable
for admission as a solicitor in
England and Wales by declaring
all convictions and other relevant
matters when they apply for a
certificate of eligibility to transfer to
the roll of solicitors of England and
Wales under the Qualified Lawyers
Transfer Regulations.
25

26. Opening Offices of your Law Firm in the UK
The UK has an open, transparent Definition of UK registered company
and business-friendly system The majority of foreign investors will
to encourage the formation of establish a UK registered company
new businesses. when setting up in the UK. There
are four different types of UK
There are more than 2.6 million registered company:
registered companies in the UK, with Private company limited by shares
over 440,000 new registrations each (“Ltd”) – the members’ liability is
year. No permission is required to limited to the amount unpaid on
establish a business presence in the shares they hold.
UK, although there are regulations on Private company limited by
the use of business names and certain guarantee – the members’ liability
business sectors which may require is limited to the amount they
licences or authorisation (such as have agreed to contribute to the
finance, defence and oil exploration). company’s assets if it is wound up.
Private unlimited company – there
Companies House is the key is no limit to the members’ liability.
government organisation that Public company limited by shares
co-ordinates the administration (“plc”) – the company’s shares
of businesses in the UK. Detailed are offered for sale to the general
guidance on the requirements for public through a stock exchange
forming a company in the UK is and the members’ liability is limited
available at: to the amount unpaid on shares
www.companieshouse.gov.uk held by them.
Independent professional advice on The vast majority of foreign
forming a company in the UK can also businesses are established as a
be obtained from accountants, solicitors company limited by shares, either
and company formation agents. as a private limited company or as a
public limited company. Most foreign
companies set up a private limited
company that is a subsidiary of the
overseas company. For a formal
definition of a subsidiary, please see:
www.clickdocs.co.uk/glossary/
subsidiary-company.htm
26

27. Opening Offices of your Law Firm in the UK (continued)
Setting up a UK registered company Alternative business structures for
It is a straightforward process to foreign investors
establish a company in the UK and Instead of registering a UK
there are no separate rules for foreign company, foreign businesses can
nationals. To register a company, establish a presence in the UK
certain mandatory documents such as through the following:
the “Memorandum of Association” and a) A branch
“Articles of Association” must be filed b) A place of business
with Companies House (for England, c) A partnership
Scotland and Wales) or with Companies d) A limited partnership
Registry (for Northern Ireland). e) A limited liability partnership
f) A joint venture
The documentation can be prepared g) A European public limited
and the company registered in a day, company (SE)
provided that standard Memorandum
of Association and Articles of a) A branch
Association are adopted (it can take A branch is part of an overseas
considerably longer if tailor-made limited company organised to conduct
Memorandum of Association and business through local representatives
Articles of Association are required). in the UK. After opening a branch,
“Ready-made” companies are the following documents must be
available from company formation submitted to Companies House (or
agents throughout the UK. Companies Registry in Northern
Ireland) within a month:
– a completed BR1 form,
– a certified copy of the company’s
constitutional documents (for
example, the charter, statute and
operating agreement),
– a copy of the latest set of audited
accounts required to be published
in the overseas country, and
– the registration fee (currently £20 in
England, Scotland and Wales, and
£35 in Northern Ireland).
27

28. Constitutional documents and Constitutional documents and
accounts must be in the home country accounts must be in the home country
language of the overseas company, language of the overseas company,
with (if not in English) a certified with (if not in English) a certified
translation made in the country where translation made in the country where
the company was incorporated. the company was incorporated.
b) Setting up a place of business c) Partnerships
A place of business gives a physical Individuals, including overseas
or visible indication that a company investors, can set up as a partnership
may be contacted there. An overseas in the UK. The partners have “joint
company also has to register if it and several liability” for all debts. This
regularly conducts business from a means that if a partner or a number
particular location in the UK, even of partners cannot pay, or be made
if there is no physical sign of the to pay, their share of any debts, the
company’s connection with it. other partners become liable (in
addition to their own share of debt).
Within a month of establishing a
place of business, the company must d) Limited partnerships
submit the following documents to A limited partnership consists of:
Companies House (or Companies – one or more persons called
Registry in Northern Ireland): “general partners” who are liable
– a completed 691 form (for England, for all debts and obligations of the
Scotland and Wales) or 641 form firm, and
(for Northern Ireland), – one or more persons called “limited
– a certified copy of the company’s partners” who contribute a sum
constitutional documents (for or sums of money as capital, or
example, the charter, statute and property valued at a stated amount.
operating agreement), and Limited partners are not liable for
– the registration fee (currently £20 in the debts and obligations of the firm
England, Scotland and Wales, and beyond the amount contributed.
£35 in Northern Ireland).
28

29. Opening Offices of your Law Firm in the UK (continued)
A limited partnership must be registered LLPs have similar disclosure
under the Limited Partnership Act of requirements to a company, including
1907. To register, all partners must sign the filing of accounts. They are also
and submit Form LP5 – including details required to:
of the business name, nature of the – file an annual return,
business, commencement date and the – notify any changes to the LLP’s
sum contributed by each limited partner membership,
– to Companies House (or Companies – notify any changes to their
Registry in Northern Ireland). An members’ names and residential
overseas limited partnership cannot addresses, and
usually register in the UK because the – notify any change to their registered
main place of business of a limited office address.
partnership has to be in the UK. For further detailed information
on LLPs, please see:
e) Limited liability partnerships (LLP) www.companieshouse.gov.uk/
An LLP is an alternative corporate infoAndGuide/llp.shtml
business structure providing the
benefits of limited liability but f) Joint ventures
allowing its members the flexibility An overseas company can form
of organising their internal structure a base in the UK by joining with a
and tax arrangements as a UK company. Such joint ventures
traditional partnership. (JVs) are usually made with limited
companies or established as a
Any new or existing firm of two or partnership. Information on possible
more “persons” (in law a “person” JV partners is available from the
can be an individual or a company) relevant UK trade association. For
can incorporate as an LLP. An LLP further information, please contact
is incorporated by registration at the Trade Associations Forum at:
Companies House or Companies www.taforum.org
Registry in Northern Ireland (following
a similar process to that required for
registering a company).
29

30. g) European public limited company Choosing a company name
European Union legislation allows Regulations restrict the choice of a
overseas companies to establish a company name. A company name
European public limited company cannot be chosen if it is the same
(also known as a “Societas Europaea” as an existing registered company
or “SE”) in the UK. An SE can be or uses certain words regarded as
registered in any country within the sensitive. For a list of sensitive words
European Economic Area although please see:
the registered office and head office www.companieshouse.gov.uk/
must be in the same country. There are aboutgbhtml/gbf3.shtml#appa
several ways of forming an SE:
– By merger Before applying to set up a company,
– As a holding company or doing anything to change its name,
– As a subsidiary it is recommended that a search
– By a plc transforming into an SE of the company name index
is undertaken. Please see:
An SE must have share capital and www.companieshouse.gov.uk
shareholders whose liability is limited
in a similar manner to that of a plc. As The regulations on law firm name
with a plc, an SE registered in the UK only apply to firms regulated by the
may denominate its share capital in any Solicitors Regulation Authority
currency it chooses, provided that at www.sra.org.uk
least £50,000 is denominated in sterling.
The major benefit of an SE is that the
registered office can be transferred
to another European country without
a loss of legal status (avoiding, for
example, the requirement to deregister
the company in one country and
reregister in another). For further
detailed information on the procedures
to establish an SE, please see:
www.companieshouse.gov.uk/about/
gbhtml/gb06.shtml
30

31. Complying with UK Business Laws and Regulations
Data protection in the UK Exporting data from the UK outside
As a law firm setting up a business of the EEA
in the UK, you will need to consider The DPA prohibits the transfer of
carefully whether you will have any personal data outside the EEA to
obligations under the Data Protection any country that does not ensure an
Act 1998 (“DPA”). The DPA requires “adequate level of protection” for the
that all organisations that handle rights and freedoms of data subjects in
personal information comply with a relation to the processing of personal
number of data protection principles data. Cross-border transfers of personal
regarding privacy and disclosure. data are becoming more common
Personal data means data that relates due to the flow of information over the
to a living individual, such as their internet, the spread of multi-national
name, address and salary details corporations and the increased trend
and personal sensitive data meaning in outsourcing back office and HR
data relating to racial or ethnic functions of organisations.
origin, sexual orientation, trade union
membership or religious beliefs. Your company may need to transfer
data from its branch or UK subsidiary
The DPA covers both UK registered to a company elsewhere. The UK
companies and overseas companies data protection regime prohibits the
who maintain an office, branch or transfer of personal data outside the
agency in the UK and individuals EEA unless adequate safeguards are
who are ordinarily resident in the UK. in place to protect the exported data.
A law firm with a branch office in the If you do not have the consent of the
UK will therefore need to comply with data subjects to transfer the data
the DPA. outside the EEA then, unless transfer
of the data is deemed necessary to
fulfil a contract, the simplest way to
ensure adequate data protection will
be to use the European Commission
model contract clauses or binding
corporate rules in the case of
intra-group transfers.
31

32. Money Laundering Identification documents
There is a strict anti-money In the course of setting up and carrying
laundering regime in the UK which out business in the UK, you are likely
forms part of an initiative to tackle to need the services of professionals
criminal activity worldwide. Money who will be subject to the anti-money
laundering is the exchange of money laundering regime, for example, banks,
(or other assets) obtained criminally solicitors, accountants, tax advisers
for “clean” money (or other assets), and insurance brokers. Under ‘KYC’
that is, money with no obvious link to (know your customer) obligations, they
its criminal origins. It includes money will need to carry out identification
used to fund terrorism. and verification checks in respect of
you and your business, monitor your
The relevant UK requirements and business activities, and report any
penalties are found in the Money suspicious activities to the Serious
Laundering Regulations 2007, the Organised Crime Agency (SOCA).
Proceeds of Crime Act 2002 and the The documents that they will require
Terrorism Act 2000. from you as proof of identification
and verification will vary according to
whether you are an individual
or a company.
Individuals
Documents you will typically need to
provide include:
Proof of identity (certified copy of a
passport).
Proof of address (certified copy of
an official document which shows
your address such as a utility bill or
bank statement no more than three
months old).
Banks or other regulated
professionals may carry out their own
additional identification checks.
32

33. Complying with UK Business Laws and Regulations (continued)
Companies Protect Intellectual Property Rights
If you are part of a group, you will in the UK
need typically to provide the following Intellectual property rights (IPR)
documents (or certified copies) in provide competitive advantage and
respect of the parent company in your can be one of the most important
home country: assets that a company owns. They
Constitutional documents. can be owned, transferred and
Proof of solvency. exploited like any other form of
Proof of identification/address personal property.
(in the form described above) of the
principal director/shareholder. The UK has established laws in place
Copies of annual reports protecting a range of intellectual
and accounts. property rights including:
Copyright – protects original
You can expect to be asked for literary, dramatical, musical
detailed information about how and artistic works, including
you plan to carry out business in software codes.
the UK and will need to show that Patents – protects technical
you are authorised to represent the inventions (products and
company (for example, in the form processes), including computer
of an original or certified copy of a implemented solutions and
letter of authority on the company’s technical problems.
letterhead). You should also be aware Designs – protects the appearance
that banks are obliged to verify the of a product.
chain of ownership of companies to Database rights – protects the
the underlying beneficial owners to investment in either obtaining,
understand the full structure of the verification or presentation of the
company and to identify and check contents of a database.
all sources of funding. Confidentiality – protects
information.
Trade marks – protects brands.
33

34. Copyright and database rights arise Trade marks and designs can both
automatically on creation of work. be protected through registration.
There is no system of registration for Rights in trade marks however can
these rights in the UK. For copyright also arise through use and can be
works however claim should be protected through a tortious claim
laid to the rights that already exist. of passing-off. Similarly, rights in
This can be done by ensuring designs will arise automatically on
that all “works” are labelled with creation of the work. However, the
an appropriate copyright notice registration system offers a quicker,
identifying the owner and year of easier and often a more cost-effective
creation. Accurate records of by who way of seeing off infringers (in the
and when the works were created case of trade marks) and longer term
should also be kept. protection (in the case of designs).
Inventions can be protected by Confidential information in the UK is
obtaining a patent. It is essential that protected by law even in the absence
the invention and any know-how of a confidentiality agreement. It
relating to the invention is kept is best practice however to use a
confidential (throughout the world) confidentiality agreement wherever
prior to the filing of the patent possible. The confidentiality agreement
application. Any unprotected should accurately identify the
disclosure of the invention (or any information that you intend to disclose
part of it) will destroy the patentability and the purpose for which you intend
of the invention. to disclose it. Even where the intended
recipients have signed a confidentiality
agreement, it is best practice to label
all documents and materials containing
confidential information
“Strictly Private & Confidential”.
34

35. Employment in the UK
Employee rights in the UK are derived Rights on termination of employment
from both contractual provisions and including rights to a minimum period
legislation, which is now derived of notice (according to length of
predominantly from European law. UK employment), a statutory redundancy
employment laws are varied and legal payment (where applicable) and the
advice should be taken before acting right not to be unfairly dismissed.
as the penalties for non-compliance
can be severe and damaging for the Additional rights including the right
reputation of your business. for male and female employees
to receive equal pay and the
Employment rights are diverse and right for all employees not to be
include the following: discriminated against (whether
Rights during employment including when recruited, during employment
rights to a minimum level of or on termination of employment)
wage prescribed by Government, on grounds of sex, marital status,
statutory sick pay during periods of race, disability, sexual orientation,
sickness, maximum weekly hours religion, belief or age.
of work and prescribed rest breaks,
rest periods and annual holiday Unfair dismissal
entitlement, protection and (where In addition, legislation preserves
applicable) payment during periods employees’ continuity of employment
of maternity, adoption, paternity and and existing terms and conditions
parental leave. where such employees are employed
in an undertaking which transfers
from one entity to another (eg in the
context of the sale of a business)
You cannot dismiss an employee
who has worked for you for more
than one year without a fair reason.
There are six potentially fair reasons
for dismissal including conduct,
capability, illegality, redundancy,
retirement and “some other
substantial reason”.
35

36. Employment Contract Financial obligations
A contract of employment may As an employer in the UK you have
be written or oral and terms may be a number of financial obligations in
express or implied. relation to your employees including
the deduction of income tax and
Legislation requires you as an employer employee national insurance
to give all employees a written statement contributions from their salary at
of their main terms and conditions source. You are also obliged to
of employment within two months of make additional employer national
commencing employment. You must insurance contributions. The level
notify employees in writing of any of tax and national insurance
change to the statement within one contributions depends on the
month of the changes. In practice, many level of an employee’s earnings.
employers in the UK have standard These deductions together with
terms and conditions of employment for the employer national insurance
their employees which extend beyond contribution must be paid over
the statement required by legislation. to HM Revenue & Customs on
a monthly basis.
Redundancy payment
An employee is entitled to receive
redundancy payment if he/she has
provided at least two years of service
and has been dismissed on redundancy
grounds. The redundancy payment is
linked to the employee’s age, length
of continuous service with you as the
employer and their weekly pay.
As the employer you must provide a
written statement showing how the
payment has been calculated, and
you must also strictly follow certain
prescribed procedures.
36

37. Employment in the UK (continued)
Foreign workers In the absence of any specific tax
Foreign nationals3 will need to apply planning employees seconded to
for permission under the UK’s Points work in the UK are subject to UK
Based System to be eligible to work income tax on their salary at a rate
in the UK. The UK Border Agency of up to 40 per cent or 50 per cent
issues leave which can be valid for for those earning over £150,000.
up to a maximum of three years, after However, if a secondment package is
which a foreign worker may apply for structured correctly, UK income tax
an extension if needed. The proposed and national insurance contributions
salary of the foreign worker should can be drastically reduced or in some
not be below the prevailing minimum cases eliminated entirely.
wage in the UK. In many cases, there
should also be clear evidence that Below is a brief description of the
a European Economic Area (EEA)4 main planning opportunities that may
resident is not available to fill this exist for secondees from abroad to
position. Please refer to the UK the UK:
Border Agency for further information. If the UK has a Double Tax Treaty with
your home jurisdiction it is possible
Employee secondment packages to make a claim that results in
A foreign company may wish to employees being able to work in the
second employees to work in the UK for up to six months in each UK tax
UK either with a group company or year (6 April to 5 April) without being
a third party, such as a customer for liable to UK income tax on income
example. Employees are normally derived from carrying our employment
seconded on their existing terms and duties in the UK.
conditions of employment, although
additional terms (or a variation of
existing terms) may be agreed for the
duration of the secondment and it is
possible for seconded employees to
acquire UK employment rights whilst
seconded to the UK.
The Points Based System applies to anyone who is not a national of the European Union, Switzerland, Iceland,
3
Liechtenstein or Norway.
See footnote 2 on page 15
4
37

38. Where an employee is being could be treated as being exempt
seconded to the UK for less than from UK taxes if it is paid into a bank
24 months it is possible to agree account outside of the UK and other
with HM Revenue and Customs necessary steps are taken. However
(the UK tax authority) that the the personal allowance of £6,475
proportion of their salary that is (for 2008-09) is lost if this exemption
spent on accommodation, food and is claimed.
sustenance, council tax and utility
bills and travel to work from home can Exemption from UK National
be paid to them free of tax. Insurance (Social Security)
Depending on the level of salary being Employees seconded from abroad
paid to the employee these tax free to the UK are exempt from UK
amounts, together with the tax free national insurance for a period
allowance of £6,475 (2010-11) that of 52 weeks. The employer is
all individuals working in the UK are also exempt from paying national
entitled to, that earn under £100,000. insurance contributions during this
period. These contributions could
Claim that salary in respect of days be as high as 12.8 per cent of the
working outside of the UK is only employee’s salary.
taxable if received in the UK
Where an employee is seconded to
the UK but spends some time working
outside of the UK (eg in mainland
Europe) then the proportion of the
employee’s salary attributable to days
worked outside of the UK is not subject
to tax in the UK provided it is not
received into a UK bank account (or
remitted to the UK in some other way).
Therefore, if an employee spends
three months a year working in
Europe then 25 per cent of their salary
38

39. Employment in the UK (continued)
Domicile of the UK (eg rents from non-UK
The concept of domicile is almost property, interest on a non-UK bank
unique to the UK and being designated account, dividends from a non-UK
non-domiciled can affect your tax company, etc.) are taxable only if
liability. A person is domiciled in the remitted to the UK. Therefore, UK tax
place where they consider home. can be avoided on non-UK income
Normally this is defined in terms of a and gains simply by keeping these
person’s “domicile of origin” which funds outside of the UK.
is taken from their father but if strong
ties are formed with a new jurisdiction If the non-UK income or gains total
and old ties are severed with the old is less than £2,000 in a tax year
jurisdiction, a “domicile of origin” will then the “remittance basis” can
be replaced with a “domicile of choice.” be relied upon by non-domiciled
HM Revenue & Customs generally individuals. However if the unremitted
accept that if a person has come foreign income or gains exceeds
to the UK solely for the purposes of £2,000 in a tax year then there is a
working with a view to returning to cost to submitting the claim on the
their home country in the future, the “remittance basis”. For individuals
“domicile of origin” is retained so who have been resident in the UK for
employees seconded temporarily from seven or more years (out of the last
abroad to the UK will be considered ten years) there may be a tax liability.
foreign domiciled for UK tax purposes. For individuals with a significant
non-UK income an annual charge of
Normally an individual who is tax £30,000 can be paid to discharge that
resident in the UK is subject to UK liability. This is separate to any tax
income and capital gains tax on due on funds remitted to the UK. This
their worldwide income and gains. is a complex area and advice should
However, where that person is be sought before seeking to rely on or
domiciled outside of the UK, it is claiming on the “remittance basis”.
possible to submit a claim so that
the income and gains arising outside
39

40. Health and Safety As an employer or business owner,
Liability insurance you will be legally responsible for
Under UK law, all businesses, the self- any damage or injury caused by
employed and employees are required negligence or breach of duty to
to comply with the statutory health employees, customers and the public.
and safety regime. This is governed by It is important therefore that you
the Health and Safety at Work etc. Act take out liability insurance to cover
1974, and includes a raft of associated any compensation and legal costs
regulations, as well as guidance and that may arise if you are found to be
Approved Codes of Practice. at fault. The main types of liability
insurance are listed below:
The legislation aims to protect the Employers’ liability
health and safety of employees, compulsory insurance.
contractors and members of the Public liability insurance.
public. Some of the key features of Product liability insurance.
the legislation that apply to most Pollution risk insurance.
businesses include the requirements to: Property owners’ liability insurance.
Register with either the Health and Professional indemnity insurance.
Safety Executive (HSE) or local Directors’ and officers’ liability.
authority (depending on the type
of business). Failure to have adequate cover
Appoint someone competent to can have serious consequences,
monitor your health and safety especially for small businesses. You
duties (this may or may not be an should therefore seek specialist
external consultant). advice as to the appropriate type and
Provide health and safety training level of insurance that is adequate for
for all workers. your business.
Ensure your workers have
safe equipment to use at work,
including appropriate visual display
equipment and report certain work-
related accidents, diseases and
dangerous occurrences.
40

41. Immigration to the UK
Any foreign national seeking to set Tier 1
up a business or work in the UK, will This tier covers:
need to obtain permission to do so Highly skilled workers who can
before travelling to the UK. come to the UK to look for work
or self-employment opportunities.
The UK immigration rules recently They do not need a job offer and
underwent fundamental changes they will be awarded points for
as the UK moved to a Points Based qualifications, previous earnings,
System (“PBS”). experience and age.
Entrepreneurs who want to invest in
In addition to the points requirement the UK by setting up or taking over
for each tier, you are likely to have to and being actively involved in the
demonstrate that you have a specified running of one or more businesses
amount of money to support yourself in the UK. An entrepreneur will not
and any dependants, and that you are be able to take up employment in
able to speak English. the UK.
Investors who want to make a
The PBS consists of five tiers. Those substantial financial investment in
that will be relevant to an individual the UK. An investor does not need
intending to set up business or a job offer in the UK but will be
work in the UK, or a foreign law firm permitted to work if he wishes.
wanting to transfer employees to the Post-study workers who are
UK, are as follows: graduates who have studied in the
UK. They do not need a job offer
and are free to look for work. This
category acts as a bridge to other
Tier 1 and Tier 2 categories.
41

42. Tier 2 You may wish to come to the UK on a
This tier includes: short-term basis to do business. An
Intra-company transfers – for individual can come to the UK as a
example, where an overseas business visitor for up to six months
company wants to transfer an provided they are only transacting
existing employee to a related business directly linked to their
business in the UK. employment outside the UK and that
A job offer that passes the they continue to be paid a salary
“Resident Labour Market Test” – from abroad. The individual must not,
the UK employer will have to show however, undertake productive work in
that the job has been advertised the UK (ie a hands-on management or
in the UK/EEA and that there is no administrative role or having any direct
suitably qualified worker from the executive responsibilities).
UK/EEA to fill the post.
Shortage occupations – a list of As a non-EEA or Swiss national,
recognised shortage occupations is you should check visa requirements
published by the UK Border Agency when planning to come to the UK as
– this does not include lawyers. a business visitor.
All applicants in Tier 2 must have a UK Trade & Investment have
certificate of sponsorship from their investment specialists who are
proposed UK employer, which must happy to give advice or referrals on
be registered as a sponsor with the immigration issues for companies
UK Border Agency. The job must be wishing to set up in the UK.
skilled and the worker must be paid
the appropriate UK salary rate. Prepared by the Law Society of
England and Wales in conjunction
Please check the UK Border Agency with the Ministry of Justice and
website for further information UK Trade & Investment.
on the PBS.
www.bia.homeoffice.gov.uk
42

43. Useful Contacts
National Ministry of Justice
UK Trade & Investment 102 Petty France
Kingsgate House London
66-74 Victoria Street SW1H 9AJ
London Tel: +44 (0)20 3334 3555
SW1E 6SW www.justice.gov.uk
Tel: +44 (0)20 7215 4904
www.ukti.gov.uk Bar Council
Law Society 289-293 High Holborn
London
International Division WC1 7HZ
The Law Society Tel: +44 (0)20 7242 0082
113 Chancery Lane www.barcouncil.org.uk
London
WC2A 1PL Bar Standards Board
Tel: +44 (0)20 7242 1222 289-293 High Holborn
Email: internationaldivision@ London
lawsociety.org.uk WC1 7HZ
www.lawsociety.org.uk Tel: +44 (0)20 7611 1444
www.barstandardsboard.org.uk
Solicitors Regulation Authority
Ipsley Court
Berrington Close UK Regions
Redditch
B98 OTD Scottish Development International
Tel: +44 (0)15 2750 4450 Atlantic Quay
www.sra.org.uk 150 Broomielaw
Glasgow
G2 8LU
Tel: +44 (0)14 1228 2828
www.sdi.co.uk
43

44. Invest Northern Ireland Yorkshire Forward
Bedford Square Victoria House
Bedford Street Victoria Place
Belfast Leeds
BT2 7ES LS11 5AE
Tel: +44 (0)28 9023 9090 Tel: +44 (0)11 3394 9600
www.investni.com www.yorkshire-forward.com
International Business Wales East Midlands
Welsh Assembly Government Development Agency
Trafalgar House Apex Court
5 Fitzalan Place City Link
Cardiff Nottingham
CF24 0ED East Midlands
Tel: +44 (0)14 4304 5500 NG2 4LA
www.ibwales.com Tel: +44 (0)11 5988 8300
www.emda.org.uk
One NorthEast
Stella House Advantage West Midlands
Goldcrest Way 3 Priestly Wharf
Newburn Riverside Holt Street
Newcastle upon Tyne Aston Science Park
NE15 8NY Birmingham
Tel: +44 (0)19 1229 6200 B7 4BN
www.onenortheast.co.uk Tel: +44 (0)12 1380 3500
www.advantagewm.co.uk
North West Regional
Development Agency East of England Development Agency
PO BOX 37 Victory House
Renaissance House Vision Park
Centre Park Chivers Way
Warrington Histon
Cheshire Cambridge
WA1 1XB CB24 9ZR
Tel: +44 (0)19 2540 0100 Tel: +44 (0)12 2371 3900
www.nwda.co.uk www.eeda.org.uk
44

45. Useful Contacts (continued)
Think London
Level 35
25 Canada Square
London
E14 5LQ
Tel: +44 (0)20 7718 5400
www.thinklondon.com
South East England
Development Agency
Cross Lanes
Guildford
GU1 1YA
Tel: +44 (0)14 8348 4200
www.seeda.co.uk
South West of England
Regional Development Agency
Corporate Headquarters
Sterling House
Dix’s Field
Exeter
Devon
EX1 1QA
Tel: +44 (0)13 9221 4747
www.southwestrda.org.uk
45