Expanding to the West: Is the UK a suitable place for Indian businesses in 2026?
Many Indian businesses are now looking west, hoping to capture markets in Europe and North America to add to their presence in Asia. The UK could be the answer due to its stability, talented workforce, and more. However, a strict taxation and visa regime may render it inappropriate for your business.
If you decide that the UK is the right nation to expand your Indian business to, you may want to hire workers from India to contribute to your new branch’s success. They will usually need a visa to work in the UK, and your business will need a sponsor licence to give these workers the certificate of sponsorship needed for many visa applications. Get in touch with Total Law for help with requests about obtaining a sponsor licence.
A Leading Workforce
You won’t be able to bring an entire workforce from India. Instead, you will need to hire domestic talent. There is plenty of this available in the UK, thanks to its excellent university network. Four of the top-ten universities in the world are in the UK.
The nation is also home to fantastic financial services, insurance, technology, and creative sectors, particularly in London. Businesses in these sectors have helped cultivate an effective and imaginative workforce.
The combination of these factors has led the UK government to claim that the nation has the most qualified workforce of any major economy in Europe.
A Stable Economy and Political System
The UK has been through a difficult ten years. It has had six Prime Ministers during this time, including the brief 50 days of Liz Truss, and has faced the unsettling economic events of BREXIT, the War in Ukraine, and rising energy prices.
It is important to consider this as an exception that sits apart from the norm. Britain has also maintained a strong business landscape despite these issues and continues to achieve steady growth in line with comparable economies in the western world.
Much of the reason that the British economy remains stable despite political upheaval is its firm regulatory environment. Notorious bodies like the Financial Conduct Authority (FCA) ensure that businesses act appropriately and that consumers and shareholders are protected. This means that your Indian business will be protected in its operations, but it will also mean that the British market will have expectations of how your business will behave.
Challenges to Expansion into the UK
Expansion into the British market is not appropriate for all Indian businesses that are seeking better integration into European and North American markets. The main reason to think twice before taking the leap is that the nation has a high tax burden on businesses and high earners, along with a high cost of living.
Your workers may expect higher wages to offset the high income tax. In India, income tax ranges from 5-30% depending on earnings. Meanwhile, the British government charges 45% for earnings over £125,140, 40% on earnings over £50,271 and 20% on earnings over £12,571. This is set to rise in real terms over the coming years as the government has announced plans to freeze these tax bands rather than allowing them to rise with inflation.
Other taxes will also directly eat into your profit margins. British corporation tax is substantially higher than India’s at 25% for profits over the threshold. Meanwhile, India’s corporate tax is 0-12% depending on total revenues. Another tax to keep in mind is the capital gains tax, 10-28%, and the20% value-added tax that is applied to most goods.
Ireland: Another Option for Western Expansion
The UK is not the only option for Indian businesses that want access to Western markets. A better option might be to expand into Ireland, though the country has a much smaller domestic market. This nation that neighbours the United Kingdom has similar access to North America, is still a member of the European Union, and has much lower taxes.
The current corporate tax rate is just 12.5%, half that of the United Kingdom. Ireland also has kinder income tax rates for couples, as the combined rather than individual salary is taken into account. As a result, you and your business will be able to keep more of its profits.
Another reason to consider Ireland instead of the UK for your western expansion is that it is home to some of the world’s most influential businesses, particularly in the tech and pharma sectors. Examples include Apple, Microsoft, Pfizer, and Johnson & Johnson. Such a presence could make it easier to obtain foreign direct investment.
How Can Total Law Help?
Once your business’s branch is established in the UK, it isn’t as simple as inviting your leading workers in India to come to the UK to get things moving. They will need a visa, such as a UK Expansion Worker visa, or a Senior or Specialist Worker visa. This will usually require your business to assign them a Certificate of Sponsorship, which will, in turn, require your business to have a sponsor licence.
Getting a sponsor licence requires your business to succeed in a complex application process. Expert immigration lawyers like ours at Total Law can guide you through the entire process of ensuring your business is compatible with sponsorship requirements and completing the application process. Our team can also help your workers with their visa applications once you have sponsored them. Call us today to find out more about our sponsorship and visa services.
