United Kingdom Market Entry

United Kingdom Market Entry

Subchapters:

  • Market entry
  • Forms and conditions of operation on the market
  • Marketing and Communications
  • Issues of intellectual property protection
  • Public procurement market
  • Payment terms, payment ethics and resolution of commercial disputes
  • Visas, fees, specific conditions of travel to the territory
  • Employment of citizens from the Czech Republic
  • Fairs and events

Market entry

With the departure of the UK from the EU, the basic conditions for the use of goods on the British market have changed, the country has withdrawn from the EU internal market (England, Scotland, Wales) – customs conditions, certification, marking, use of authorized representatives, etc. Detailed information is available on the website of the Embassy of the Czech Republic in London and the website www.export.cz. However, Northern Ireland is administratively still part of the internal market, European rules apply to the placement of goods on this market, on the contrary, an administrative border was created between Great Britain and Northern Ireland. Check smber for agriculture and fishing facts of United Kingdom.

For European goods that meet the condition of origin, within the framework of the Agreement on Trade and Cooperation, zero tariffs and quotas are applied for imports into the UK. Even the Agreement, however, means increased administrative costs and the need to fill out a customs declaration. The UK has postponed the introduction of border controls to 1 October 2021 for goods of animal origin.

From 1 January 2022, the UK introduced deferred border customs controls for most goods, the last phase of the introduction of controls incl. the obligations of the so-called Safety and Security Delarations and sanitary and phytosanitary controls have been postponed until the end of 2023. Controls for alcohol and tobacco and other selected types of goods have been introduced since January 1, 2021. The EU applies full customs controls since January 2021.

The conditions of certifications have also changed, from 2021 Britain introduced its own UK Conformity Assessed (UKCA) instead of the European CE marking. All certificates valid for the EU will need to be recertified by a UK authority for the UK market. Transition periods of different lengths apply to different sectors and it is always necessary to check the specific conditions, the general deferral for the UKCA is until 2023.

Import licenses for industrial products are issued by the Export Control Joint Unit. The import of certain goods into the UK is completely prohibited.

The UK also changed the VAT payment and collection system for smaller shipments. If the contents of the shipment are under £135, the seller is responsible for collecting and remitting VAT to the UK authorities.

The use of local representatives and distributors is very widespread for the UK. For foreign companies, this is often the only viable way to establish themselves in the British market at the beginning. Agents are registered with British Agents BASE, which provides access to the largest database of professional sales agents in the UK. The Manufacturers’ Agents’ Association of Great Britain and Ireland – MAA offers the same services as BASE. In addition, it offers to find a representative in Ireland as well. The British Chambers of Commerce – BCC is a business organization covering approx. 533 chambers of commerce in the UK. Chambers of commerce have a long tradition and a strong position.

For some companies, it may be advantageous to set up their own subsidiary in the UK. Registering a company in Great Britain (England, Scotland, Wales) is a fairly simple process. The company is registered under ” The Companies Act 1985 ” in the commercial register ( Companies House, in Northern Ireland the Companies Registry ). Companies are required by law to submit accounting data and annual turnover statements to the commercial register. Companies House records data on 2 million companies.

Incorporation documents should be prepared by a UK lawyer, but this is not a legal requirement. The company is registered after receiving the Certificate of Incorporation. The business registration process usually takes 7 working days. Electronic registration costs from £10, physical submission of documents costs £40. In Northern Ireland it costs £35 to register a business. A business can be registered at Companies House directly or through a law firm.

Information about companies in England, Wales and Scotland can be found at Companies House. Information about companies in Northern Ireland is maintained by the local Companies Registry. Detailed information is charged. Information on the financial situation of British companies is offered by several companies (e.g. First Report). Such services are provided online and at relatively affordable prices.

Forms and conditions of operation on the market

The usual legal forms of companies in the UK are:

  • Private limited company (Ltd) – private company with limited liability, the most common form. Liability is limited either by shares or by guarantee.
  • Public limited company (Plc) – a public company with limited liability. It is a joint stock company that can raise financial resources by selling shares to the public.
  • Limited partnership (LP) – partnership (association) of entrepreneurs. Partners have joint responsibility for the firm’s obligations and are liable for unlimited personal property. The partnership agreement is usually drawn up by a lawyer, who will propose the way the company will be managed and the distribution of profits. This type of company is mainly used by start-up companies.
  • Limited liability partnership (LLP) – a new type of company that is a combination of a classic private limited liability company and a partnership.
  • Sole trader, sole proprietor – entrepreneur (natural person). This category includes small businessmen, traders or private consultants. An entrepreneur is liable for business obligations with unlimited personal property. This type of business requires minimal paperwork and formalities. However, the entrepreneur must keep records of his income and expenses for tax purposes and social and health insurance payments.

An important state office for companies and entrepreneurs is HM Revenue & Customs, where they must register as payers of VAT, profit tax, consumption tax and social and health insurance contributions (national insurance).

Marketing and communication

In the UK there are a large number of newspapers, magazines and other periodicals where the offer of goods and services can be published. An overview of all periodicals is published annually in the Media Guide. Here, the interested party will find a complete database of all print publications, television and radio stations, information on the readership (viewership, listening) circle, print circulation (broadcast and broadcast coverage) and advertising prices. A general overview of the range of promotional and advertising services can be obtained from The Advertising Association. Among the best-selling newspapers are The Sun, Daily Mail and Daily Mirror, economic topics are covered by the Financial Times, partly also by the Telegraph and the Guardian, from weeklies in particular by the Economist.

Marketing through social networks is becoming more and more common. The COVID-19 pandemic has pointed to the ever-increasing number of online purchases through e-shops and the generally growing trends of online platforms for the sale of goods. E-commerce is predicted to continue to grow, with an estimated growth of up to 30% by 2024. High-quality and clear processing of marketing materials is also an important factor.

Issues of intellectual property protection

The protection of intellectual property is governed by the ” Copyrights, Designs and Patents Act of 1988 “, which is continuously amended due to the implementation of EU directives. The main state office for the protection of intellectual property is the Intellectual Property Office (British Patent Office). This office grants patents for inventions, registers and registers trademarks, utility and industrial designs. Patents granted by the European Patent Office (The European Patent Office) are also valid in the UK; as well as trademarks and utility/industrial designs registered with The Office for Harmonization in the Internal Market (OHIM).

The largest applicants for a patent in the UK include companies from the field of information and communication services (Hewlett Packard, Schlumberger, NEC, Samsung, Motorola, Sun Microsystems) and the Ford car manufacturer. The largest number of trademarks are registered by Unilever, GlaxoSmithKline, Imperial Chemical Industries, Johnson & Johnson, British Telecom, Asda, Marks & Spencer.

Copyrights are automatically protected in the UK as soon as any record exists in the material that has been created (film, music, literary work, etc.). There is no official copyright registration here. The Embassy of the Czech Republic in London has not been informed of any case of infringement of intellectual property rights in relation to Czech subjects.

Public procurement market

From 1 January 2021, UK is governed by the Government Procurement Agreement (GPA) of the World Trade Organization (WTO). The EU-UK Trade and Cooperation Agreement continues to provide European firms with access to UK public procurement.

Public contracts that started but were not completed before 12/31/2020 will be governed by the rules as of 12/31/2020. From 1 January 2021, public contracts above the limit must be advertised on the new internet portal ‘Find a Tender’, which has replaced The Official Journal of the European Union (OJEU) in the UK. Existing government portals ie Contracts Finder, Public Contracts Scotland, Sell2Wales and eTendersNI will continue to operate unchanged.

The current UK public procurement rules have been implemented in the UK legislation below:

  • Procurement Policy Note 06/19: New Thresholds 2020
  • The Public Procurement (Amendment etc.) (EU Exit) Regulations 2019

Implementation of the GPA and the Trade and Cooperation Agreement with the European Union

  • Procurement Policy Note 02/21: The WTO GPA and the UK-EU TCA

The public sector spends around £290 billion every year on the purchase of goods and services. Those interested in supplies for the public sector must first register in the list of potential suppliers of the relevant public institution. Registered suppliers are then invited to submit a bid.

An applicant for inclusion in the list of suppliers must notify the relevant institution of the following information:

  • profile of the company’s activities and management over the last 2-3 years
  • a list and description of the products/services/work it wants to offer
  • list of significant customers to date
  • a brief description of UK public sector contracts won (if any).

An important public procurement source is also Tenders Direct, which publishes information on current procurement in the UK and Europe.

Other resources:

The Public Procurement (Amendment etc.) (EU Exit) Regulations 2019

Procurement Policy Note 06/19: New Thresholds 2020

Payment terms, payment ethics and resolution of commercial disputes

The payment terms result from the agreement between the exporter and the importer. The most used payment instruments include documentary letters of credit (Letter of Credit, L/C), documentary collection and direct payments. Prices for delivered goods are given according to Incoterms (eg EXW, CIF, FOB). Late payments are subject to a statutory right to interest if the contract is governed by UK law.

The Falklands pound, the Gibraltar pound and the Saint Helena pound are pegged to the British pound. The lowest value of EUR/GBP was recorded at the end of 2008 at €1.02, the highest in September and October 1982 at €1.82.

A commercial contract should always contain a clause according to which country’s law any commercial disputes will be resolved. Otherwise, Anglo-Saxon law based on common law applies.

Business disputes are usually settled in County Courts, the High Court is the court of appeal. Comprehensive legal services and advice, including representation in court, are provided by solicitors, who make up the majority of British lawyers (The Law Society of England and Wales). The second category of British lawyers is barristers. They are authorized to represent parties in the higher courts and provide specialized legal services (The Bar Council of England and Wales).

What to do if you have been the victim of fraud by an entity operating in the UK.

Visas, fees, specific conditions for traveling to the territory

From 2021, the rules of the new British immigration system also apply to EU citizens. A visa is not required for stays of up to 6 months for tourist or work reasons. Without a visa, it is possible to carry out business visits, participate in trade fairs, meetings with business partners, etc. The full list of permitted activities within the framework of visa-free relations is here.

For stays longer than 6 months and for activities that are not on the list for visa-free travel, it is necessary to obtain the appropriate type of visa. Visas are issued by the Embassy of the UK in Prague.

Practical information for traveling to the UK after 1 January 2021

EU citizens will continue to be able to use biometric passport e-gates when entering the UK at the border. EU citizens arriving in the UK visa-free as visitors will need to leave the UK first if they wish to apply for a visa for another purpose. More practical information on traveling to the UK after 1 January 2021 can be found here.

From October 2021, entry to the UK is only possible with a valid passport.

Areas of increased risk for foreigners

The political situation in the UK has been stable for a long time, there are no areas with an increased risk for foreigners. The level of crime is on the European average. In recent years, however, the number of violent crimes committed with knives has increased sharply, especially in London. Carrying a firearm or knife for personal protection is a criminal offense in the UK, and carrying CS sprays is also illegal.

There are several international airports in and around London (Heathrow, Gatwick, Stansted, Luton, London-City, Southend). Fast and relatively cheap transport connections from the mentioned airports to the center of London are provided by the subway, express trains and buses. Passengers can also use the taxi service, which is, however, significantly more expensive, alternative transport applications also work in London.

Journey to the Embassy

The Embassy of the Czech Republic is located at 26-30 Notting Hill Gate, W8 4QY London. The nearest tube station from is Notting Hill Gate (Central, District and Circle lines).

Ultra low emission zone in London and other cities

London and other cities in the UK introduce low emission zones (Ultra Low Emission Zones), where the entry of washed types of cars (age, TIR/passenger, etc.) is either completely prohibited or charged. The trend of these zones continues to expand in the UK, we recommend that you always check the current situation in the area when traveling by car.

Employment of citizens from the Czech Republic

From 1 January 2021, EU citizens who are not residents of the UK must meet specific requirements in order to come to work in the country. Within the points immigration system, points are awarded for specific skills, qualifications, salary evaluation of a specific job position and jobs in segments with a shortage of labor. Only those applicants who collect a sufficient number of points will be allowed to work at the UK. It will also be necessary to undergo appropriate checks, which include, but are not limited to, a criminal background check on the applicant. More information on the website of the embassy. Most work visas work on a sponsorship basis. The sponsor is a British company/entity which is registered as such with the Home Office.

Workers from other countries have to pay social and health insurance (National insurance) in the UK in addition to income tax. After obtaining the registration card, the employee must apply for a National insurance number (NIN). The employee’s contributions to social and health insurance are subsequently recorded under this code. Employers who employ illegal workers face a fine of £20,000 for each such worker. If caught repeatedly, the employer can go to prison for 5 years and the amount of the fine is unlimited.

Qualification recognition is required in the UK for selected professions, which means that it is necessary to apply for qualification recognition before starting the activity. The list of regulated professions and further procedures can be found on the website of the National Contact Point for Professional Qualifications.

The duration of the work posting is not limited, but from the point of view of the tax authority (HM Revenue & Customs), every person with a total stay in the UK of more than 183 days in a given accounting year (April-March in the UK) is required to register for income tax. The above also applies to short-term stays in the UK with an average length of more than 91 days per year (arrival and departure days are not counted), if this situation occurs for four years in a row.

Working hours, including overtime, must not exceed an average of 48 hours (40 hours for minors, 8 hours per day) per week during the reference period, which is usually 17-52 weeks. The reference period may not include vacation or illness time. Employees can work more than 48 hours a week if they conclude a written agreement with the employer (so-called opt-out).

Employees are entitled to a 20-minute rest period during working hours of more than 6 hours. Young employees are entitled to a 30-minute break if they work more than hours at a time. Employees are entitled to 11 hours of uninterrupted rest per day and 1 day off per week. Young people are entitled to 12 hours of uninterrupted rest per day and 2 days off per week. Special rules apply to so-called mobile workers in air, sea and road transport.

Every employee (full-time and part-time) is entitled to an annual paid holiday of times the working week per year, or proportional part for an incomplete working year. Therefore, if an employee works 5 days a week, he is entitled to 28 days of vacation per year. British public holidays (bank holidays) do not count towards the length of annual paid leave. However, it should be noted that holidays always fall on working days (usually Mondays).

The minimum wage is now £9.50/hour. for employees aged 23 and over; £9.18/hour for employees aged 21-22, or £6.83/hour for employees aged 18-20, £4.81/hr. for employees under 18 and £4.81/hr. for apprentices. The minimum wage increases according to the decision of the British government, it was last increased from April 2022. You can use the minimum wage calculator. The amount of overtime rates depends on the agreement between the employer and the employee. However, for each hour worked, including overtime, the employee must receive at least the minimum wage. Failure by an employer to pay at least the minimum wage is punishable by a fine of £5,000 for each affected employee.

Detailed information

Fairs and events

The largest exhibition site in the UK is the National Exhibition Center (NEC) Birmingham, the 10th largest exhibition site in the world. The second most important exhibition area is ExCeL London, which is located in the south-eastern part of the city. The smaller London exhibition area is the Olympia. Other important trade fair cities in the UK also include Manchester, Glasgow, Sheffield, Leeds, Edinburgh and Cardiff. An overview of all fairs in the UK, for example, here.

From the trade fair calendar, the following events are of international importance:

NEC Birmingham

  • Glee (Leisure Fair)
  • Food and Drink Expo
  • Infrarail (railway trade fair)
  • Interplas (trade fair for the production and processing of plastics)
  • UK Construction Week (the UK’s largest trade fair for the construction industry)
  • Subcon (the most important subcontracting fair in the field of industrial production)
  • Advanced Engineering (an important trade fair in the automotive and aerospace industry)

ExCeL London

  • WorldTravel Market (travel trade fair)
  • DSEi (the world’s largest trade fair for weapons technology)
  • BETT (Technology Fair for Education)
  • London Wine Fair
  • The National Wedding Show
  • International Confex (fair for conference organizers)
  • Great British Beer Festival

Olympia London

  • Decorex (interior design fair)
  • IMBIBE Live (Beverage Industry Fair)

Farnborough International Airshow

Czech exhibitors have to expect relatively high costs in the UK (mainly in London). The unwritten rule is the fact that one-time participation in the fair is not decisive and only repeated participation can bring a desirable result. However, if Czech products or services are of high quality and competitively priced, there is a good chance of success in the UK. It is advisable for Czech companies to come to the fair first as visitors and only then as exhibitors.

United Kingdom Market Entry