The Key Steps on How to Open a Business in the UK From Portugal
- Published: 29 August 2025
- 13 min read
- Starting a Company
Rodney Wong
Author
Rodney supports customers in the UK in understanding the details and benefits of our products and services, helping them see how technology can transform their business. Passionate about the impact of the written word, he translates tech topics into clear, relevant, and practical insights, inspiring entrepreneurs to bring their ideas to life.
Mosan Ali
Reviewer
Mosan Ali is our Accounting Manager based in the UK and has a wealth of knowledge of UK GAAP, VAT, and PAYE. With 12 years of experience crunching numbers and ensuring compliance, he keeps our financial reporting ship-shape. Think of Mosan as our blog's accounting guru. He carefully reviews our UK-focused content, ensuring it's accurate, up-to-date, and packed with helpful tips for UK businesses. Get your taxes right from day one with our informative blog posts.
Wondering how to open a business in UK from Portugal? Whether you have an established business but are looking to expand your business internationally or start a new venture in the UK, this guide will help you navigate the process smoothly. Starting a business in the UK from Portugal involves understanding cross-border legal requirements, tax obligations, and practical steps to establish your presence effectively.
Key Takeaways
- Choosing the appropriate business structure in the UK, such as sole trader, partnership, or limited company, is vital for legal and financial management.
- Registering with Companies House, obtaining necessary permits, and understanding tax obligations are essential steps for compliance when starting a business in the UK.
- Effective financial management, including maintaining accurate records and utilising tools like multi-currency accounts, is crucial for the sustainability and growth of a business.
- Portuguese entrepreneurs should take advantage of bilateral trade agreements and tax treaties between Portugal and the UK to avoid double taxation.
Understanding Business Structures in the UK
Selecting the right business structure is crucial when starting a business in the UK. Your choice will affect your taxation, liability, and administrative responsibilities, so decide wisely.
Common business types in the UK include:
- Sole traders
- Partnerships
- Limited companies
- Limited liability partnerships
Each has unique advantages and responsibilities. Understanding these options will help you decide on which is best according to your business needs.
Sole trader
Becoming a sole trader is one of the simplest ways to start a business in the UK. As a sole trader:
- You are self-employed, with no legal distinction between you and your UK business.
- You can trade using your name or a chosen trading name.
- You retain all profits after taxes.
- Business finances can have a direct impact on your private assets.
- Grants you significant control as the only proprietor.
To register as a sole trader, you must inform HMRC that you will pay tax through self-assessment. This straightforward process involves providing your name and address.
Although simple, this structure requires careful financial management since personal and business finances are not separate. Review your annual accounts and conduct thorough auditing if needed before filing for taxes, and mark your deadlines so you can pay on time.
Partnership
A partnership business is suitable for two or more people running a business jointly. Responsibilities and profit distribution are shared and defined through a formal agreement. Each partner is self-employed and handles their own tax returns. This collaborative structure allows partners to pool resources and expertise to achieve shared goals.
Each partner is responsible for their share of liabilities and debts, putting personal finances at risk if the business incurs debts. A clear, well-drafted partnership agreement is essential to outline roles, responsibilities, and profit sharing.
Choose the right company structure with confidence
Unsure which company structure is best for your business? Our team of experienced advisors in the UK is here to guide you through the decision-making process.
Limited company
- Legally separate the company from its shareholders and directors, offering significant liability protection.
- Must register with the governing agency and adhere to specific administrative responsibilities.
- Maintains independent finances.
- Is subject to corporate tax, which may be more favourable than personal income tax rates.
One key advantage of a limited company is the protection of personal assets. If the business faces financial difficulties, the owners’ liability is limited to their investment. This structure also enhances credibility with clients and investors, making it attractive to many entrepreneurs.
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Limited liability partnership (LLP)
A UK business formed under a limited liability partnership (LLP) allows:
- Limited liability to its members while allowing them to participate in management
- A requirement of at least two members
- Flexibility in profit distribution and management roles
- Members’ liability limited to their investment, protecting their assets from company debts
LLPs are popular among professional service firms, such as law and accounting practices, due to their flexible structure and liability protection. Registering an LLP involves filing with Companies House and adhering to legal restrictions, which protect shareholders and operators from prosecution.
Business Structure | Liability | Taxation | Registration Requirement | Suitable For |
|---|---|---|---|---|
| Sole Trader | Personally liable | Self-assessment income tax | Register with HMRC | Individual entrepreneurs |
| Partnership Businesses | Partners personally liable | Each partner files own tax | Register partnership with HMRC | Two or more people jointly running a company |
| Limited Company | Limited to investment | Corporation tax | Register with Companies House | Companies seeking liability protection and credibility |
| Limited Liability Partnership (LLP) | Limited to investment | Each member pays tax on profits | Register with Companies House | Professional firms needing flexibility and liability protection |
Steps to Register a Business in the UK from Portugal
Starting a company in the UK from Portugal involves several critical steps to ensure legal compliance and a solid structure. The streamlined process is highly accessible, and the UK also has welcoming rules toward EU citizens residing in Portugal who want to start their own business in the UK.
Check your legal status
As a Portuguese citizen, you should verify your legal status to work and start a business in the UK. Following Brexit, Portuguese nationals require the appropriate visa or settled status to operate a business in the UK. The EU Settlement Scheme may apply if you moved to the UK before the end of 2020. Otherwise, you may need to apply for a Start-up or Innovator visa to legally establish your business.
As of December 2024, over 4.1 million EU citizens were granted settled status under the UK’s EU Settlement Scheme – demonstrating the scale of post-Brexit residency adjustments
Choose your business name
Selecting a unique and compliant business name is vital for establishing your brand and avoiding legal issues. Key considerations include:
- The business name must be distinct and not identical to any existing registered names.
- A company name checker can help ensure the availability of your chosen name.
- Using such tools helps prevent potential conflicts.
A unique name for your UK business differentiates your company and supports credibility and regulatory compliance. This step is essential for building a strong brand identity and ensuring smooth registration with Companies House.
Determine your business structure
Deciding on the right business structure affects your legal liability, tax obligations, and operational needs. The UK offers various structures: sole trader, partnership, and limited company, each with distinct advantages and responsibilities. Assess your goals and the level of liability you are comfortable with to make an informed decision.
For partnerships, a formal agreement is necessary to outline earnings, losses, liabilities, and ownership splits among partners. This ensures clarity and prevents conflicts, making it a crucial step in the setup process.
Business address requirement
When registering a limited company in the UK, you must provide a registered office address– a physical UK location (not a PO Box) where Companies House and HMRC can send official correspondence.
Having a registered office address ensures legal compliance and helps establish credibility with clients and partners. This is a requirement for UK entrepreneurs and foreign business owners.
Small businesses often use a virtual registered office address as a practical, cost-effective way to receive and store important documents securely while maintaining privacy.
Register with Companies House
Registering with Companies House involves the following steps:
- Appoint at least one director, which can be yourself as a Portuguese
- Appointing a company secretary (optional but recommended)
- Calculating shares and appointing at least one shareholder
- Writing a memorandum and articles of association in the company register.
- Pay the registration fee of ÂŁ12.
Registration can be done online, often within 24 hours.
Incorporating a business enhances its credibility and offers liability protection for owners. Preparing and submitting all necessary documents correctly will facilitate a smooth registration process. All companies are required to have an Association Statement.
Register for taxes with HMRC
After selecting your business type, register for taxes with HMRC. This involves obtaining the necessary information from HMRC and registering your business for tax purposes. If your business has employees, you must also register as an employer and obtain employers’ liability insurance.
Portuguese business owners should be aware of the double taxation treaty between Portugal and the UK, which helps avoid being taxed twice on the same income. Consulting a tax advisor familiar with both jurisdictions is advisable.
Voluntary VAT registration can benefit some businesses, but it becomes mandatory once your UK turnover exceeds ÂŁ90,000. However, for non-established businesses without a UK base, VAT registration is required from the first ÂŁ1 of taxable sales, making timely compliance essential to avoid penalties.
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Open a business bank account
Opening a business bank account is essential for separating personal and business assets and maintaining a separate bank account. The process typically involves:
- Providing ID and address verification documents for the owner and directors
- Making an initial deposit (sometimes required)
- Opening the account online at some banks, although verification often requires a branch visit
Foreign businesses may find it convenient to use multi-currency business accounts or digital banking platforms that facilitate international transactions between Portugal and the UK.
A business account helps oversee finances and enhances business credibility. Alternative options like the Wise business multi-currency account can also be considered for ease of international transactions.
Kickstart your entrepreneurial journey. Open a bank account now.
As part of getting your business off the ground in the right way, we connect you with one of our partners to open a bank account best suited for your business in the UK
Legal and Compliance Requirements
Compliance with legal and regulatory requirements is crucial for smooth business operations. This involves registering with HMRC, staying updated on evolving laws, and adhering to industry-specific regulations. You must also file a confirmation statement at least once a year. Compliance protects your business from legal issues and enhances its credibility and sustainability.
Consulting local UK authorities can help identify the necessary licenses for your industry.
Insurance requirements
Public liability insurance protects against injury to third parties and property damage claims. It covers legal fees and compensation for at-fault claims, offering protection both on-site and off-site.
Employers’ liability insurance covers compensation claims from employees who are injured or become ill due to their work. It is mandatory for businesses with employees.
Employment law compliance
Employers must comply with the following mandatory requirements under UK law:
- Provide written employment contracts and statements of employment particulars.
- Adhere to workplace health and safety standards.
- Have employers’ liability insurance if they have employees.
Understanding these rules is essential for businesses intending to employ people and hire staff.
Financial Management and Taxation
Effective financial management and understanding taxation are vital for your business’s sustainability and growth. Keeping accurate records, creating a detailed financial plan, and understanding taxation rules will help you avoid penalties and manage your business efficiently.
Corporation tax
Limited companies pay corporation tax on profits, which can be more favourable than personal income tax rates. Corporation tax returns must be filed within 12 months of the end of the accounting period, and any unpaid tax must be paid within nine months and one day following the end of the accounting period.
Self-assessment for sole traders
Business owners must register for self-assessment by 5 October following the end of the tax year and file their returns by 31 January. Keeping accurate records of income and expenses is crucial for the self-assessment process.
Self-employed individuals must complete their tax returns online or by paper, depending on their preference.
VAT registration and returns
Businesses must charge VAT on taxed sales and issue VAT invoices to their customers. VAT returns are generally filed quarterly, but businesses can opt for annual returns if that suits their operations better.
Timely VAT registration and return filing are essential for compliance and financial management.
The essential VAT guide for SMEs in the UK
We covered all you need to know about VAT: VAT rates, registration for VAT, and the best VAT schemes for your business in the UK.
Practical Tips for Portuguese Entrepreneurs Starting a Business in the UK
Starting your own business in the UK can be challenging, but practical tips and advice can ease the journey. Building a robust support network, creating a comprehensive business plan, and focusing on marketing and branding are crucial steps for small business owners.
Creating a business plan
A comprehensive business plan helps define your goals and strategies for achieving them. It serves as a roadmap for operations and a tool for securing investment.
A well-structured business plan outlines specific goals and steps needed for success.
Networking and support resources
Joining UK business associations and chambers of commerce that support international businesses can be extremely beneficial for your newly established UK company. These platforms provide access to valuable resources, mentorship, and networking opportunities.
Marketing and branding strategies
Creating a unique brand identity is essential for standing out in a competitive market. Key strategies include:
- Establishing a unique brand voice
- Leveraging digital marketing tactics to enhance customer engagement and brand awareness
- Utilising social media effectively to boost brand visibility and customer loyalty.
Effective branding creates an emotional connection with customers, leading to higher customer retention and loyalty. By focusing on building a strong brand, you can differentiate your business from competitors and create a lasting impression on your target audience.
Managing International Payments Between Portugal and the UK
Payment management is crucial for businesses engaged in cross-border operations. Utilising multi-currency accounts and low-fee transfer services can significantly ensure smooth transactions while saving money on processing fees. These types of business accounts also help reduce the costs associated with currency conversion and enhance transaction speed.
Multi-currency accounts
Multi-currency business accounts allow businesses to hold and manage money in multiple currencies, facilitating easier cross-border transactions. Using multi-currency accounts reduces the costs associated with currency conversion and can improve transaction speed.
Wise Business accounts offer several features. These include linked debit and expense cards, multi-user access, batch payment tools, and cloud accounting integrations.
Low-fee transfer services
Using services like Wise, businesses pay fewer fees for international transfers compared to conventional banks. Some low-fee transfer services allow businesses to send money in over 100 currencies, enhancing world transaction capabilities. These services can save you a handsome amount of money once your business is up and running.
Osome makes it easy for foreigners to set up and manage a business remotely. From fast company registration to ongoing accounting support, we handle the paperwork so you can focus on growing your venture with confidence.
Summary
Starting a business in the UK from Portugal involves a myriad of steps, from choosing the right business structure to ensuring compliance with legal and financial requirements. Then, by registering with the appropriate authorities and managing your financial and legal obligations, your new business is ready for success.
Equipped with practical tips and strategies for networking, branding, and managing international transactions, you’re now ready to navigate the UK business landscape with confidence. Remember, thorough planning and adherence to compliance are key to building a sustainable and successful business.
Rodney supports customers in the UK in understanding the details and benefits of our products and services, helping them see how technology can transform their business. Passionate about the impact of the written word, he translates tech topics into clear, relevant, and practical insights, inspiring entrepreneurs to bring their ideas to life.
