Many entrepreneurs looking to expand their business overseas see the UK as an ideal jurisdiction. There are a huge number of reasons for this, but the main ones are considered to be ease, impeccable compliance with established rules and the safety of doing business in England. “England is a country where anyone can open a business during one day” - there are very few jurisdictions in the world about which the same can be said.
However, before opening a business and starting investment activities in the United Kingdom, one should study the specifics of the legislation of this jurisdiction. For example, in this article, you can familiarize yourself with the main aspects of foreign investment regulation in Britain.
Foreign investment regime in the UK
Great Britain is an island not only geographically. The UK stands alone in terms of domestic legislation. The conditions for organizing a business here differ from other EU members - fewer formalities and less money are required. The most attractive areas for investment are considered to be consumer goods and retail, industrial, and financial services.
The UK is open to business and foreign investment is encouraged, subject to regulatory oversight. After all, the rules must be followed!
For entrepreneurs planning to start a business in the UK, it is important to have a clear understanding of the interpretation of the concepts of "foreign investor" and "foreign investment". In England, general legal rules apply to all investments, regardless of origin. This means that foreign investments are not allocated in any way and are regulated by the same laws as national ones.
However, it is worth making a reservation here. In addition to the normal supervision that all UK registered companies are subject to, foreign investment laws may be subject to specific public interest laws:
- EU Merger Regulation;
- Law on Entrepreneurship EA02;
- TFEU Agreement;
- Takeover code - in some cases.
Mergers in the UK
If you are planning a UK merger, then the information below will be very useful for you.
The Competition and Markets Authority (CMA) has set the following thresholds:
Shares of the offer:
- if the combined entity will supply or purchase more than 25% of goods/services in the UK, and if the existing share of supplies is increased by 25% or more;
- if in relation to national critical sectors there will be 25% or more share in the supply of goods/services without the need to increase.
Registration with the CMA is optional for a transaction that meets UK thresholds. But if the transaction focuses on the thresholds of the European Union only, then registration is required.
The CMA has broad powers to intervene after a transaction is closed.
The UK is the second country in the world (after the United States) in terms of the volume of foreign investments attracted annually. There are many programs to support entrepreneurship here, ranging from free government seminars, to special visas for foreign investors and highly qualified specialists.
You can learn about the main provisions of foreign investment regulation in the UK by signing up for a personal consultation with our legal advisors. Our specialists are also ready to provide a wide range of accompanying services at all stages of the merger transaction in Europe.