Setting up a business in Scotland

Advice for third-country nationals

If you're not an EU/EFTA citizen, you will need a visa to be able to set up your own business in Scotland. The good news is that most different types of visa have recently been replaced by a single option called Standard Visitor Visa, making the process much more simple. Consult our section on Visas to see what applies to your case.

What type of business should you choose?

Assuming your visa documentation is in order (or on its way), what you should consider first is how to structure your business. In Scotland, the corporate structures most widely used are sole trader (good option if you are a self-employed person with a small-scale business), partnership, and limited company (you can opt for a private limited company, Ltd, or a public/listed company, PLC). Find out more about the different types of company structures, here.

The type of company you choose is important, because it can affect the legal control you have over your business and the requirements you will have to meet to be able to get started. For instance, if you choose any type of limited company, you will need to register at Companies House. The type of your company will also affect how much tax and national insurance you need to pay, the ways in which you can raise money and your own financial liability if your business encounters problems, as well as the type of records/accounts you'll need to keep. For example, if you choose a limited liability company and have foreign entrepreneurs, you need to set up the company's head office in Scotland and appoint at least one administrator locally. It is advised that you hire an accountant or solicitor to help you figure everything out.

Good to know:

Thankfully there are also many organisations which can help you with advice and information on setting up your business. Scottish Development International (SDI) for starters, as well as the Department of International Trade (DIT) can prove of substantial help.

How to set up your business in Scotland

Once you have settled on the type of company that best suits your needs, you should proceed to do the following:

• check the availability of the name you have chosen for the company
• apply for a National Insurance (NI) number (if setting up an independent company)
• fill in a IN01 form
• register your company at the Companies House (if setting up a limited company)
• register the company at Her Majesty Revenue and Customs (HMRC)
• obtain a VAT number at Her Majesty Revenue and Customs if your company's annual turnover exceeds £82,000 and to be able to settle the Pay As You Earn (PAYE)
• set up a bank account for your company
• sign a civil insurance contract for your employees, if you have any

In the case of a limited liability company, you are also required to:

• appoint at least one person as the company Director
• have at least one shareholder
• provide the company's address
• draft the company's statutes (rules and regulations)
• register the company at tax authorities so that you can pay corporate tax.

In the case of a partnership, you are also required to:

• register yourself for self-tax assessment
• name the company according to certain regulations
• make the company work individually
• share profits among partners

Good to know:

If you're registering a new private limited company (also known as subsidiary), the process is very fast and can be usually completed online within a day. If you already have a company and wish to open a Scottish branch, the process can take up to 4 weeks and you'll need to submit additional documents and information.

Useful links:

TalentScotland
Scottish Development International
HMRC ' Her Majesty Revenue and Customs