The United Kingdom remains one of the world’s most attractive destinations for international business, offering a wealth of opportunities for Polish companies looking to expand their global footprint. With its resilient economy, innovative ecosystem, and strategic location, the UK provides an ideal launchpad for businesses seeking growth and success in the English-speaking world and beyond.
Economic Outlook
According to KPMG’s UK Economic Outlook report from July 2024:
• GDP growth is forecast at 0.5% in 2024 and 0.9% in 2025.
• Inflation is expected to average 2.6% in both 2024 and 2025.
• The unemployment rate is projected to rise to 4.5% in 2024 and 4.9% in 2025.
The UK economy is gradually recovering from a technical recession in the second half of 2023, with growth led by the service sector. Despite challenges, these figures demonstrate the UK’s economic resilience and potential for growth.
A Thriving Business Environment
The UK consistently ranks as one of the easiest places to do business globally. In the World Bank’s Doing Business 2020 report, the UK ranked 8th out of 190 economies. This high ranking reflects the country’s business-friendly regulations, strong legal framework, and efficient processes for starting and operating a company.
The UK government actively supports foreign investment through various initiatives and incentives. For instance, the Department for International Trade offers tailored support to help international businesses establish and expand their presence in the UK.
Strategic Location and Market Access
One of the UK’s key advantages is its strategic location and extensive trade networks. Despite Brexit, the UK maintains strong economic ties with the European Union while also fostering new trade relationships globally. The recent free trade agreement with Australia and ongoing negotiations with other countries demonstrate the UK’s commitment to international trade.
For Polish businesses, the UK offers access to a large domestic market of over 67 million consumers and serves as a gateway to global markets. London, in particular, remains a global financial hub, providing unparalleled access to capital and financial services.
Innovation and Technology
The UK is at the forefront of innovation, with world-class universities, research institutions, and a thriving startup ecosystem. Cities like London, Manchester, and Edinburgh have emerged as major tech hubs, attracting talent and investment from around the world.
The government’s commitment to fostering innovation is evident in initiatives like the UK Innovation Strategy, which aims to make the UK a global hub for innovation by 2035. This creates numerous opportunities for Polish tech companies and startups looking to tap into cutting-edge research and development.
Key Sectors for Investment
Several sectors in the UK offer particularly promising opportunities for Polish businesses:
1. Financial Services: London’s status as a global financial centre makes it an ideal location for fintech companies and financial service providers.
2. Technology: The UK’s tech sector is booming, with particular strengths in artificial intelligence, cybersecurity, and clean tech.
3. Creative Industries: The UK is a world leader in creative industries, including film, music, and digital media.
4. Advanced Manufacturing: With a focus on high-value manufacturing, the UK offers opportunities in sectors like aerospace and automotive.
5. Life Sciences: The UK’s strong research base and supportive regulatory environment make it attractive for pharmaceutical and biotech companies.
Navigating the Business Landscape
While the UK offers numerous advantages, it’s important for Polish businesses to be aware of key considerations:
• Taxation: Understand the UK tax system, including corporation tax, VAT, and employment taxes. The corporation tax structure changed in April 2023: for profits over £250,000, the main rate increased from 19% to 25%. However, for businesses with profits between £50,000 and £250,000, a marginal relief system applies, creating a sliding scale of tax rates. Companies with profits up to £50,000 continue to pay the 19% rate. This tiered system means not all companies with profits between £50,000 and £250,000 are taxed at the full 25% rate, but rather at an effective rate that increases gradually based on their profit level. Recent changes also include the end of the 130% super-deduction capital allowance on 31 March 2023, replaced by a new full expensing regime allowing 100% deductions for certain capital expenditures.
• Employment Laws: Familiarise yourself with UK employment regulations, including minimum wage requirements, working hours, and employee rights.
• Intellectual Property: Ensure your intellectual property is protected. The UK has robust IP laws and is a signatory to major international IP treaties.
• Data Protection: Data Protection: Comply with UK data protection laws, which are largely based on the EU’s GDPR. However, be aware that the UK is considering has proposed reforms to its data protection framework through the Data Protection and Digital Information Bill, which could may lead to some divergence from GDPR in the future. This might could potentially impact businesses relying on the UK’s data adequacy agreements decision with the EU, which is due for review by June 2025.
• Regulatory Environment: Be aware of increased reporting requirements, including the implementation of Pillar Two rules. Pillar Two establishes a global minimum tax regime which will apply to both public and privately held multinational groups with consolidated revenue over €750m. This may impact some larger Polish businesses operating internationally, requiring them to ensure a minimum 15% effective tax rate across their global operations.
Success Stories
Many Polish companies have already found success in the UK market. For example, CD Projekt, the video game developer behind “The Witcher” series, has established a strong presence in the UK gaming industry. Similarly, Comarch, a Polish IT company, has successfully expanded its operations in the UK, serving major clients across various sectors.
Looking Ahead
As the UK continues to adapt and evolve post-Brexit, it remains committed to being a global hub for business and innovation. For Polish companies looking to expand internationally, the UK offers a unique combination of opportunities, support, and potential for growth.
Take the Next Step
Are you a Polish entrepreneur looking to expand your business to the UK? Lexefiscal can help guide you through the process. Our team of experienced advisors specialises in assisting Polish companies enter the UK market successfully. We offer comprehensive support including:
• Guidance on legal entity setup
• Assistance with regulatory compliance
• Tax planning and optimisation strategies
• Connections to local business networks
Don’t miss out on the opportunities the UK market has to offer. Contact Lexefiscal today for a free initial consultation on how we can help your business thrive in the UK. Visit www.lexefiscal.com or email info@lexefiscal.com to get started on your UK business journey.
Partners
Dr Clifford J Frank – PhD: clifford.frank@lexefiscal.com
Angelo Chirulli – ACA: Angelo@lexefical.com
Senior Associate
Justyna Szymaszek: justyna@lexefiscal.com
Tel: +44 208 092 2111 www.lexefiscal.com
