Setting up in the UK
A handbook for overseas law firms
Contents


The UK: A Destination for International Business              4
The UK: the Best Choice for International Law F...
I am delighted to introduce this handbook and to commend the work that
    UK Trade & Investment and their partners are do...
England and Wales is open for legal business. We welcome lawyers from
other jurisdictions to our shores, whether on a temp...
The UK: A Destination for International Business


    The UK Government welcomes and                                 The ...
“The ever changing international         FoxMandal Little, India’s largest and
 market and the demands of               ol...
The UK: the Best Choice for International Law Firms


    The UK is a leading international law
    centre, home to three ...
Market Opportunities                     Law firms from other countries
International law firms in London        England a...
Global Reach: International Dispute Resolution


    English law is, like the English         Since 1895 the High Court ha...
Introduction to the Legal System


The United Kingdom of Great Britain      The Court system in England and Wales
and Nort...
Introduction to the Legal System (continued)




     The Administrative Court (formerly             Impact of the Europea...
The Legal Profession in England and Wales


The UK’s legal profession is split         For companies, solicitors may
into ...
The Legal Profession in England and Wales (continued)




     Solicitors are increasingly becoming        ICT, creative a...
Competition Law – UK competition             Until recently, barristers in private
lawyers have a reputation for being    ...
The Legal Profession in England and Wales (continued)




     The Bar contains individuals with           Regulation of s...
Practising Law in England and Wales


Your Options                                                 Some of these above-men...
Practising Law in England and Wales (continued)




       In partnership with English solicitors    Foreign lawyers who h...
inform members of the public of the           As noted above, lawyers in England
status of the foreign lawyer concerned   ...
Practice Issues for Foreign Lawyers in England and Wales


     In common with most jurisdictions,         Other foreign l...
Land and Succession                           Financial Services
The Solicitors Act 1974 reserves the          Under the F...
Practice Issues for Foreign Lawyers in England and Wales (continued)




     Foreign lawyers practising with             ...
The restrictions noted do not apply to      Other Professional Arrangements
employment of a solicitor by an MNP,        Fo...
Practice Issues for Foreign Lawyers in England and Wales (continued)




     Relations between foreign lawyers           ...
Becoming a Solicitor of England and Wales


If you wish to call yourself a Solicitor of   3. Meet character and suitabilit...
Becoming a Solicitor of England and Wales (continued)




     The requirements for different              Before applying...
Opening Offices of your Law Firm in the UK


The UK has an open, transparent            Definition of UK registered compan...
Opening Offices of your Law Firm in the UK (continued)




     Setting up a UK registered company           Alternative b...
Constitutional documents and               Constitutional documents and
accounts must be in the home country       account...
Opening Offices of your Law Firm in the UK (continued)




     A limited partnership must be registered     LLPs have sim...
g) European public limited company          Choosing a company name
European Union legislation allows           Regulation...
Complying with UK Business Laws and Regulations


     Data protection in the UK                 Exporting data from the U...
Money Laundering                          Identification documents
There is a strict anti-money              In the course...
Complying with UK Business Laws and Regulations (continued)




     Companies                                  Protect In...
Copyright and database rights arise          Trade marks and designs can both
automatically on creation of work.          ...
Employment in the UK


     Employee rights in the UK are derived       Rights on termination of employment
     from both...
Employment Contract                         Financial obligations
A contract of employment may                As an employ...
Employment in the UK (continued)




     Foreign workers                                           In the absence of any ...
Where an employee is being                could be treated as being exempt
seconded to the UK for less than          from ...
Employment in the UK (continued)




     Domicile                                    of the UK (eg rents from non-UK
    ...
Health and Safety                         As an employer or business owner,
Liability insurance                       you ...
Immigration to the UK


     Any foreign national seeking to set        Tier 1
     up a business or work in the UK, will ...
Tier 2                                  You may wish to come to the UK on a
This tier includes:                     short-...
Useful Contacts


     National                          Ministry of Justice

     UK Trade & Investment             102 P...
Invest Northern Ireland        Yorkshire Forward
Bedford Square                 Victoria House
Bedford Street             ...
Useful Contacts (continued)




     Think London
     Level 35
     25 Canada Square
     London
     E14 5LQ
     Tel: +...
UK Set Up - Handbook for Law Firms
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UK Trade & Investment handbook for overseas law firms interested in setting up a UK office.

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UK Set Up - Handbook for Law Firms

  1. 1. Setting up in the UK A handbook for overseas law firms
  2. 2. Contents The UK: A Destination for International Business 4 The UK: the Best Choice for International Law Firms 6-7 Global Reach: International Dispute Resolution 8 Introduction to the Legal System 9-10 The Legal Profession in England an Wales 11-14 Practising Law in England and Wales 15-17 Practice Issues for Foreign Lawyers in England and Wales 18-22 Becoming a Solicitor of England and Wales 23-24 Opening Offices of your Law Firm in the UK 25-29 Complying with UK Business Laws and Regulations 30-33 Employment in the UK 34-39 Immigration to the UK 40-41 Useful Contacts 42-44
  3. 3. I am delighted to introduce this handbook and to commend the work that UK Trade & Investment and their partners are doing to help lawyers from overseas who are thinking of working in the UK. The Ministry of Justice is committed to supporting the UK legal service sector. It may therefore seem counter-productive for me to welcome a handbook that gives foreign lawyers practical advice on how to work in the UK. Some might think that the Ministry of Justice’s role should be to protect our lawyers from foreign competition and to concentrate on helping UK lawyers to find work. In fact, much of the success of the legal sector in the UK is due to the international nature of the legal service market. London is home to hundreds of foreign law firms from all over the world. The presence of lawyers and law firms from the US, the rest of Europe, and increasingly from Asia, creates a rich, diverse landscape where advice is available in multiple jurisdictions. Such an atmosphere helps us to learn from each other – to share best practice and to develop new ways of doing business. The UK experience is that competition has led to innovation and growth. The foreign law firms in London have helped the UK to become a truly international centre for legal services. Whatever your plans – to develop contacts in the UK, to work here for a time, or to make the long-term investment of opening an office here, I hope you will enjoy the unique atmosphere of the UK’s legal world and contribute your own particular skills and knowledge to it. Suma Chakrabarti Permanent Secretary, Ministry of Justice 3
  4. 4. England and Wales is open for legal business. We welcome lawyers from other jurisdictions to our shores, whether on a temporary or permanent basis, whether they want to practise as lawyers under their home title or whether they want to requalify as English solicitors. We take this approach because we know that lawyers from other countries who come here will bring new opportunities with them. They either come with their clients, who will inevitably have other legal needs which they will need the domestic profession to satisfy; or they come with new expertise which enhances this country’s reputation as an unrivalled hub for legal advice. As you will see from the contents of this useful handbook, our regime for foreign lawyers is both flexible and light-touch. The benefits to the profession in England and Wales of an open legal market have been considerable. Over a quarter of our law firms earn fee income from international work – serving clients from abroad in the UK or vice versa. An estimated 40,000 legal jobs have been created by financial and legal liberalisation since the late 1980’s and four English law firms are now in the world’s top ten, compared to twenty five years ago when there were no English law firms in the world’s top 100. Opening up to the world has made law firms in England and Wales both innovative and globally competitive. We look forward to welcoming more of the world’s best lawyers and law firms to the UK and the Law Society of England and Wales is here to assist in any way it can. Robert Heslett President, Law Society of England and Wales 4
  5. 5. The UK: A Destination for International Business The UK Government welcomes and The UK is at the heart of European supports overseas companies in business and many corporations have establishing themselves and investing set up their European headquarters in the UK. The UK is one of the largest in the UK. The European Union is one recipients of foreign direct investment of the largest single markets globally (FDI) worldwide and the Government with 492.8 million residents and it actively encourages foreign makes strategic sense for companies businesses to set up in the UK. from elsewhere in the world to establish a presence in the UK There are few restrictions on FDI to access the European market. into the UK and it is possible to invest in almost any sector. Moreover, a Foreign entrepreneurs and companies transparent tax regime, the familiarity are increasingly making use of the of the English language and, in some dynamic and international business cases, similar legal and accounting climate that is to be found in the UK, systems makes the UK an appealing as well as a highly skilled workforce. destination for law firms from across In spite of testing economic conditions, the globe. acquisitions of UK businesses by foreign owners totalled £31 billion, The UK’s regulatory environment in 20091. has been designed to be supportive of the needs of both business and the investor community. Regulations in the UK are generally developed in consultation with the business community and are transparent, easy to understand and encourage investment and healthy competition. Foreign-owned companies are treated in the same way as their domestic counterparts with very few restrictions on foreign ownership and no limitations on the free flow of capital. 1 Office of National Statistics – Statistical Bulletin: Mergers and Acquisitions of UK Companies Q4 2009 5
  6. 6. “The ever changing international FoxMandal Little, India’s largest and market and the demands of oldest law firm, recently set up their servicing and retaining a global office on King Street in the city of client base necessitates lawyers London because they understood being able to access consistent that a city location could lead to high quality advice quickly and new opportunities for the firm. seamlessly. For an international law firm seeking to expand its business Ajit Mishra of FoxMandal Little footprint into Europe, access via stated: “As India’s largest law firm, the UK is an ideal route. There we saw expansion into the City of are compelling business merits in London as a natural step. London is having either a presence in the UK the world’s leading financial centre as a stepping stone to Europe or, and foreign firms are attracted here alternatively, forming an alliance to take advantage of the global with a UK law firm as a way of opportunities present here. accessing Europe. ”We set up our branch office here “At Nabarro our international alliance in the city to work with UK and has helped us win and retain EU companies both looking to international clients. Many UK invest in India and also to guide firms benefit from a “best friends” Indian companies while setting up relationship with international firms operations in the UK. In the UK we and undertake joint promotions, practise only Indian laws but when branding and marketing.” Indian companies target the UK as their place of business, through our Ian Binnie extensive network and knowledge Partner, Nabarro of the market, we introduce them to appropriate law firms, accountants, bankers and organisations such as the City of London, Think London, the UK India Business Council and UK Trade & Investment.” Ajit Mishra Partner, FoxMandal Little 6
  7. 7. The UK: the Best Choice for International Law Firms The UK is a leading international law centre, home to three of the four largest “London is a legal hub as well as a law firms in the world (measured by business gateway to Europe and the fees) and playing host to hundreds world. Our clients are increasingly of law firms from other jurisdictions. international in outlook, and it Contributing £14.9 billion to the UK’s made perfect sense for the firm GDP, the sector employs around 145,000 to be where its clients need it to solicitors and 19,000 barristers. be. Merging with one of the most cosmopolitan law firms in London UK firms feature prominently in The provided McGuireWoods with Global 100, a list of the top 100 firms a unique opportunity to expand compiled annually by Legal Business internationally – its London lawyers and The American Lawyer. A record are qualified in 12 jurisdictions, total of 17 UK firms were listed in speak 24 languages and the firm the top 100 in 2008. These firms has key connections in 120 cities spread across 50 countries.” generated 20.5 per cent of the top 100’s total revenue. UK firms are also Bengt Grundberg among the biggest in the world, with Manager of European Marketing four out of the top six places in terms McGuireWoods London LLP of the numbers of lawyers employed. The strength of the UK as an international centre for legal services is reinforced by the expertise of barristers involved in international practise. Over 1,000 members of the Commercial Bar Association practise in the field of international commercial law, with many cases heard in the Commercial Court. 7
  8. 8. Market Opportunities Law firms from other countries International law firms in London England and Wales are very open and have grown significantly in recent allow virtually unrestricted access for years. Based on gross fees, three foreign law firms. There are hundreds out of the largest four firms in the of foreign law firms in London, many of world are international law firms which have capability in both English based in London. law as well as their home country law. International law firms based in They may operate as full service London are leading advisers in deals firms or specialist or niche firms in a taking place in international capital particular area of law. Often foreign markets. They offer a substantial law firms in London will service clients range of services. Other smaller firms from their own jurisdictions looking offer expertise in certain services to invest into the UK and continental such as shipping or international Europe, as well as servicing the needs insurance, being world leaders in of UK, and Europe-based corporations their own niche practice. and financial institutions undertaking business in the country from which they originate. Law firms from a wide range of jurisdictions have found it beneficial to have offices in the UK, including most European countries, Russia, China, Kazakhstan, Australia, Canada, South Africa, Ghana, Brazil, India and many from the United States of America. 8
  9. 9. Global Reach: International Dispute Resolution English law is, like the English Since 1895 the High Court has language, commonly used in incorporated a separate Commercial international commerce and Court where the procedures are geared international dispute resolution. to reflect the special requirements More international and commercial of the international commercial arbitrations take place in London community. The international standing than in any other city in the world, of the Commercial Court is such that and 90 per cent of commercial cases around 80 per cent of the claims handled by London law firms involve brought to the Commercial Court involve an international party. overseas parties and, in around 50 per cent of cases, there is no link to London Up to 9,000 international disputes except for the parties’ choice of London a year take place, mostly by for dispute resolution. Between 1,500 institutions such as the International and 2,000 cases are started every year, Chamber of Commerce, London of which around 5-10 per cent typically Court of International Arbitration, go to trial. Chartered Institute of Arbitrators, the Centre for Effective Dispute The biggest dedicated business court Resolution and the London Maritime in the world is due to open in 2010. Arbitrators Association. The new Business Court will match and maintain London’s world-class The International Dispute Resolution reputation as the first choice for Centre is the largest of a number business law. For the first time, the of specialist centres developed in specialist jurisdictions of the High London in recent years for hosting Court dealing with business disputes the resolution of disputes. It opened will be brought together under one in 2000 and in 2004 had to move to roof. The new “super court” – believed larger premises due to the strength to be around four times bigger than of demand. its nearest competitor – will provide 29 courtrooms, 12 hearing rooms (for related work such as bankruptcy hearings), 44 public consultation rooms, waiting facilities for parties involved in proceedings, as well as administrative office space for court staff and judicial accommodation. 9
  10. 10. Introduction to the Legal System The United Kingdom of Great Britain The Court system in England and Wales and Northern Ireland contains three The Supreme Court is the final court different legal jurisdictions: England of appeal for all United Kingdom and Wales, Scotland and Northern civil cases, and criminal cases from Ireland. Each of these has its own England, Wales and Northern Ireland court system and legal professions; and hears appeals on arguable points and in the case of Scotland, a of law of general public importance. different legal system which is influenced by Roman or Civil law. Within England and Wales there are separate court systems dealing Further information of the legal with criminal and civil cases. The systems of Scotland and hierarchy of the English and Welsh Northern Ireland can be found at courts below the Supreme Court is www.lawscot.org.uk and as follows: www.lawsoc-ni.org respectively. The Court of Appeal, which consists of two divisions: The civil division which hears appeals from the High Court. The criminal division which hears appeals from the Crown Court. The High Court, which is divided into: The Queen’s Bench Division (dealing with contract and tort issues as well as admiralty and commercial court matters). The Chancery Division (dealing with estates, mortgages, trusts, partnership and bankruptcy issues). The Family Division. 10
  11. 11. Introduction to the Legal System (continued) The Administrative Court (formerly Impact of the European Union on known as the Crown Office) deals English Law with a range of cases including The UK joined the European Economic Judicial Reviews and statutory Community (now the European appeals and applications. Union) in 1973, since when it has been a requirement to incorporate Crown Court (local criminal courts European legislation into UK law and and appeals from Magistrates courts) to recognise the jurisdiction of the County Courts (local civil courts) European Court of Justice (ECJ) Magistrates Courts (criminal and in matters of EU law. some family cases). Human Rights Act The Commercial Court (a specialist The UK is a signatory of the European part of the High Court) sits in London, Convention on Human Rights and this but judges with commercial expertise has now largely been incorporated also sit in Birmingham, Bristol, Leeds into UK law with the passing in 1998 and Manchester. of the Human Rights Act, which requires judges in domestic courts to apply the provisions of the European Convention on Human Rights directly in those courts. 11
  12. 12. The Legal Profession in England and Wales The UK’s legal profession is split For companies, solicitors may into two main types: solicitors and draw up contracts and partnership barristers (advocates in Scotland). agreements, and assist in all the stages of a company’s life from The distinction between the two has its formation onwards, including been eroding over time but the main purchase and sale of major assets, difference is that solicitors provide mergers and acquisitions, handling continuous services to clients whilst disputes, employment tribunals and barristers act as sources of specialist competition enquiries through to legal advice on particular points liquidation or take-over. of law, or as advocates in courts, arbitrations and mediations. For private individuals, solicitors’ work ranges from handling property Solicitors transactions, tax planning, dealing The work of solicitors is highly varied. with wills and probate issues, They advise and represent clients handling divorce, insurance claims of all shapes and sizes – whether and other types of civil dispute. governments, companies or individuals. There are also solicitors who specialise in criminal and other types For governments, solicitors may of legal aid work eg immigration and undertake a wide variety of work, family law cases. from acting as advisers on issues such as employment, public The majority of solicitors work in procurement and public international private practice for firms of solicitors. law, to representing the UK These firms range in size from big government in the courts. City firms with thousands of lawyers working for them to sole practitioners who have traditionally been found on the high streets up and down the country. Nearly 40 per cent of solicitors work for the top 100 firms. 12
  13. 13. The Legal Profession in England and Wales (continued) Solicitors are increasingly becoming ICT, creative and media – UK law more specialised and focusing firms have a depth of experience on specific areas of law and legal and specialisms in new media and practise. However, around 10-15 telecommunications unrivalled around per cent are generalists working in the world. Telecommunications smaller high street practices and as transactions are frequently governed sole practitioners. by English law and disputes are often subject to resolution before the Sectors where UK solicitors have English courts or through arbitration particular expertise include: in London. Financial services – UK law firms’ Energy and renewables – Much of expertise in this sector has developed the lending for significant projects is in parallel with the growth of the City led by international lenders operating of London as a leading international from the City of London. UK law firms financial centre. Financial services have good links with these lenders are a global business and the UK’s and regularly advise on risk analysis global law firms have the capability and the development of loan and to deliver legal advice in multiple security documentation for projects. jurisdictions and on multiple disciplines. London law firms have Transport – aviation, rail and shipping also developed expertise in new – the UK has particular experience in areas of financial services such as these areas drawing on its international Islamic finance. status as an insurance and dispute resolution centre. Worldwide, English law governs 75 per cent of all shipping contracts and 90 per cent of all shipbuilding contracts. 13
  14. 14. Competition Law – UK competition Until recently, barristers in private lawyers have a reputation for being practice had to work as sole practical and commercial in their practitioners, although often working approach. The training regime for UK collectively in chambers. The sole lawyers which allows individuals who practice rule exists in order to ensure have not studied law at undergraduate that access to barristers is not limited level at university to convert to the law, by conflicts of interest. As sole helps to bring in expertise from other practitioners, barristers in the same sectors (eg in economic analysis) chambers can work on different sides that is frequently a critical element of the same case. Since November of competition advice. 2009, barristers have also been able to join a Legal Disciplinary Partnership Barristers (LDP) and thereby partner with other Barristers in England and Wales form legal professions as well as up to a corps of specialist consultants 25 per cent of non-lawyer managers. with particular expertise in advisory, drafting and advocacy work. There are slightly more than around 12,200 individuals in private practice with the Bar. Around 3,000 are employed as in house lawyers offering legal advice to their employers or in firms of solicitors. Barristers in private practice are generally used for providing advice on complex questions of law or litigation which are outside the normal expertise of solicitors and for advocacy in court or alternative dispute resolution. 14
  15. 15. The Legal Profession in England and Wales (continued) The Bar contains individuals with Regulation of solicitors and barristers expertise in all areas of the law. Many Following the entry into force of the will also have knowledge of other Legal Services Act 2007, the Law systems of law and be able to advise Society and the Bar Council are on complex international questions. both designated frontline regulators Although barristers no longer have a with overall responsibility for the monopoly on the right to appear in the regulation of solicitors and barristers superior courts (The Crown Court, High respectively. Both professional bodies Court [all divisions], Court of Appeal have independent regulatory arms and Supreme Court), in practice the within them known respectively as the bulk of advocacy in those courts is Solicitors Regulation Authority and the undertaken by barristers. Barristers Bar Standards Board. The Solicitors also frequently have rights of audience Regulation Authority, within the Law in other common law jurisdictions (or Society, sets standards and oversees can obtain them on a case by case the application of rules and disciplinary basis) and in the courts of the EU arrangements governing the practice institutions and Member States as of solicitors. The Bar Standards Board well as in international tribunals. performs the same functions for barristers. However, qualification rules Barristers can be instructed directly and discipline for the bar are governed by foreign lawyers. If a solicitor’s firm jointly by the Bar Council and the Four is needed, a barrister will be able to Inns of Court. The Legal Services advise on which solicitors are best Board acts as an oversight regulator for the job. for all legal services. An Office for Legal Complaints was established from the beginning of 2010 to handle service complaints from the public about legal service providers. 15
  16. 16. Practising Law in England and Wales Your Options Some of these above-mentioned England and Wales, and London in reserved areas are also open to other particular, is one of the world’s most UK legal professions (notaries, licensed cosmopolitan legal environments and conveyancers, etc) and, under certain is home to lawyers from nearly a conditions, to lawyers qualified in the hundred jurisdictions. They practise European Union (EU), the European English law, European law, public and Economic Area (EEA)2 and Switzerland. private international law, and the law Special rules also apply for all persons of their state/jurisdiction of origin to seeking to offer financial advice or provide a local and global service for immigration and asylum advice. their clients. The purpose of these limitations is It is not necessary to be a solicitor, simply to protect vulnerable members of barrister or other recognised society and the public interest in the good professional to practise law in England administration of justice through the courts. and Wales. Legal practitioners do not have to be British nationals. Anyone is Lawyers from other countries can free to offer legal advice and services in practise law in the UK subject to the England and Wales, with the following above reservations. Lawyers from other restrictions: countries can practise English law, as Only those duly qualified and well as the law of their own country, in certificated as solicitors or barristers in any of the following ways: England and Wales can call themselves As a sole practitioner. by those titles. As a Registered European Lawyer Certain limited areas are reserved (NB: This status is only required of to nationally qualified solicitors and lawyers practising in the UK under barristers. These areas include the title of another EU/EEA jurisdiction the exercise of a right of audience, or Switzerland and under conditions conducting litigation, certain of citizenship). reserved instrument activities In a partnership of foreign lawyers. (including the conveyancing of land As an assistant or consultant in a law and property), probate (succession) firm of any jurisdiction. activities, notarial activities and the administration of oaths. The European Economic Area is the 27 countries of the European Union plus Iceland, Liechtenstein and Norway 2 16
  17. 17. Practising Law in England and Wales (continued) In partnership with English solicitors Foreign lawyers who hold a dual and/or Registered European qualification as English solicitors must Lawyers (but only if registered with comply with the same professional the Law Society as a “registered rules and obligations as those whose foreign lawyer” or a “registered first qualification was as an English European lawyer”). solicitor. If they wish to hold a In employment with English solicitors. current practising certificate which In employment as an in-house lawyer allows them to hold themselves out (eg in the legal department of a as a Solicitor of the Senior Courts of commercial company). England and Wales, they must have professional indemnity insurance Alternatively, a foreign lawyer may to the prescribed level of minimum re-qualify as an English solicitor cover and, if practising in the UK, must or barrister. contribute to the compensation fund and fulfil annual requirements for Requalification continuing professional development. Subject to complying with the relevant The solicitor’s practising certificate training requirements, a foreign is renewable annually in November lawyer may seek to be admitted as and requires payment of an annual a solicitor or be called as a barrister registration fee and the completion in England and Wales. It is not of a registration form available from the necessary to have British nationality Solicitors Regulation Authority (SRA). to qualify or practise as a solicitor or barrister, but normal immigration Professional Title requirements would apply in respect Section 21 of the Solicitors Act 1974 of training, practise or employment. prohibits an unqualified person from taking or using any name, title or Lawyers from other countries wishing description implying that he/she is to sit the requalification examinations, qualified to act as a solicitor. The object run by the Law Society or Bar Council, of the following guidelines (which are should check the latest requirements obligatory in the case of the notepaper for their jurisdiction with those of Registered European Lawyers [RELs], organisations (see contact details at and of foreign lawyers practising the back of this handbook). together with solicitors or RELs) is to 17
  18. 18. inform members of the public of the As noted above, lawyers in England status of the foreign lawyer concerned and Wales do not have a monopoly in a way that distinguishes foreign of legal services. Subject to the lawyers from members of the local restricted (reserved) areas of work, profession. This avoids the inadvertent foreign lawyers in England and Wales commission of a criminal offence, or are free to practise the law of their of unfair trading practices. choosing including English law. However, no lawyer should undertake Foreign lawyers from non-EU work unless it can be handled jurisdictions should describe themselves promptly and with due competence. on office stationery, business cards, nameplates and in all communications Registration with the Law Society and publications (including law lists, Unless they wish to enter a telephone, telex and street directories, multinational partnership or multi- professional journals and conference national corporate practice with brochures) either by their own solicitors and/or registered European untranslated professional title or by Lawyers, with foreign lawyers the word “lawyer”, together with a practising in England and Wales do reference to the country or jurisdiction of not have to register with the Law their qualification. Society or notify the Law Society of their presence. Rules of Professional Conduct Foreign lawyers establishing offices The Law Society International Division or providing legal services in England Any foreign lawyer, wherever based, and Wales are expected to observe may apply to join the Law Society’s the standards which apply to the legal International Division on payment profession in England and Wales. of an annual fee. The status does This is so whether or not the rules of not confer any professional title but conduct and disciplinary procedures provides information, networking and of the foreign lawyer’s home Bar business promotion opportunities to apply to practise. Observing ethical its members. standards means acting as befits a lawyer, rather than complying with all local rules. 18
  19. 19. Practice Issues for Foreign Lawyers in England and Wales In common with most jurisdictions, Other foreign lawyers do not have certain types of legal work in England rights of audience in the courts, or and Wales are reserved to solicitors, the right to conduct litigation. Lawyers barristers or other recognised from other countries may however professionals. The reserved areas apply to the Chairman of the Bar of legal work include the exercise Council for permission to appear in of a rights of audience, the conduct the English courts on an ad hoc basis of litigation, certain reserved where a matter from their jurisdiction instruments (including for the is concerned. conveyancing of land and property and the drawing of trust deeds for the In most tribunals (such as employment disposal of capital), the preparation tribunals), there are no restrictions on of applications (or opposition to the rights of audience. However, this does application) to administer a deceased’s not apply to the Employment Appeals estate, notarial activities and the Tribunal or the Solicitors’ Disciplinary administration of oaths. Tribunal, which are equivalent to courts. Nor does it apply to Immigration Lawyers from the EU, EEA and Adjudicators or the Immigration Switzerland, whether they are Appeals Tribunal, where rights of established in England and Wales audience are restricted to solicitors, or practising on a temporary basis, barristers and legal executives qualified have general access to all areas of in this jurisdiction; European/EU and practice reserved to solicitors and/ EEA lawyers; and persons (including or barristers. They must however foreign lawyers) who are registered appear in courts in conjunction with with the Office of the Immigration a local lawyer and can only practice Services Commissioner. conveyancing and/or probate activities in England and Wales if these activities There is no restriction on rights to are not reserved to a specific notarial represent parties at arbitrations profession in their home state. conducted in England and Wales. 19
  20. 20. Land and Succession Financial Services The Solicitors Act 1974 reserves the Under the Financial Services and following activities to solicitors and Markets Act 2000, the Financial other specified professionals: Services Authority (FSA) is the Drawing or preparing any instrument regulator for investment business. of transfer or charge for the purpose Solicitors and “registered European of the Land Registration Act 1925, or lawyers”, and their partners, are making any application or lodging any permitted to carry on certain document for registration under that categories of investment business Act at the Land Registry. without authorisation from the FSA. Drawing or preparing any other Other foreign lawyers will require instrument relating to real or authorisation if they are to do any personal estate, except a will or investment business. other testamentary instrument, an agreement not under seal, a letter Immigration advice and or power of attorney, or a transfer immigration services of stock containing no trust Under the Immigration and or limitation. Asylum Act 1999 the Office for the Drawing or preparing papers on which Immigration Services Commissioner to found, or oppose, a grant of probate (OISC) is the regulator for immigration of a will or of letters of administration advice and immigration services. of the deceased’s estate. Foreign lawyers who are partners or employees of solicitors; European Registered European Lawyers from lawyers registered in the UK under countries in which probate and the Establishment Directive and their conveyancing are not activities partners and employees; and other reserved to a separate legal profession EU lawyers and their employees; (eg notaries) can also practice the are permitted to provide immigration above-mentioned activities in England advice and immigration services and Wales. without registering with OISC. Other foreign lawyers will have to be registered with OISC if they are to provide immigration advice or immigration services. 20
  21. 21. Practice Issues for Foreign Lawyers in England and Wales (continued) Foreign lawyers practising with Following the adoption of the Legal solicitors in England and Wales Services Act in 2007, new forms of English solicitors may practise in practice are becoming available in partnership or corporate practice England and Wales. Since March with foreign lawyers who are 2009, Legal Disciplinary Practices registered with the Law Society as (LDPs) enable solicitors, barristers and registered foreign lawyers (RFLs) or other UK legal professionals as well as registered European lawyers (RELs). as European and Registered Foreign lawyers and up to 25 per cent of non- A partnership of solicitors (and/ lawyer managers to practice together. or RELs) and registered foreign lawyers is known as a multi-national In 2011-12, Alternative Business partnership (MNP). The rules of Structures (ABSs) will be introduced, conduct applicable to solicitors apply thereby enabling new forms of non- also to an MNP. An MNP can employ lawyer involvement in legal practices. practising solicitors and RELs. Employment of an English/Welsh A mixed corporate practice is also solicitor by a Foreign Lawyer permitted between solicitors (and/or The professional rules by which RELs) and registered foreign lawyers. solicitors in England and Wales are Such a corporate practice can be bound prevent a practising solicitor either a company or a limited liability employed by a foreign (non-European) partnership (LLP). Under a new lawyer or a foreign law firm to regime which introduced firm-based provide legal services in some of the regulation from 31 March 2009, all above-mentioned reserved activities, partnerships which contain English including the exercise of a right of solicitors need to be recognised by audience, conducting litigation or the Solicitors Regulation Authority providing any immigration advice (SRA), regardless of whether they are or immigration services (unless a company or partnership. the employer, or a senior fellow employee, is registered with the Immigration Services Commissioner). 21
  22. 22. The restrictions noted do not apply to Other Professional Arrangements employment of a solicitor by an MNP, Foreign lawyers, wherever based, or by a “recognised body”, or by RELs, are entitled to enter into professional or if the solicitor is practising abroad. arrangements with solicitors. Rules They are also currently under review 8 on fee-sharing and 9 on referrals by the Law Society. of business in the Solicitors’ Code of Conduct and the home rules of foreign Employment of Foreign Lawyers lawyers, if relevant, will govern by Solicitors these arrangements. Specifically, the Subject to their home rules, foreign Solicitors’ Practice Rules provide that: lawyers may practise in the A foreign lawyer may enter into employment of solicitors, RELs, an arrangement with a solicitor to MNPs or recognised bodies. introduce clients to the solicitor. A solicitor may agree to refer Sharing of Facilities clients to a foreign lawyer. The sharing of facilities in solicitors’ A solicitor may agree to share his offices by a foreign lawyer and the professional fees with a practising appearance of a foreign lawyer’s lawyer of a jurisdiction other than name as a consultant or as an England and Wales. associated practice on a solicitor’s professional stationery or name plate Professional arrangements with or brochure is permissible, but the foreign lawyers that are part of an foreign lawyer must not be improperly entity where a controlling majority held out as a partner or held out as a of the owners and managers are solicitor, or as qualified to act non-lawyers could still be possible as a solicitor. The solicitor will have under the conditions set out by Rule an obligation to ensure that any 8, but not in the context of European sharing of facilities will not give rise Cross-Border Practice (Rule 16). to a breach of client’s confidentiality and to ensure compliance with the Solicitors’ Practice Rules. 22
  23. 23. Practice Issues for Foreign Lawyers in England and Wales (continued) Relations between foreign lawyers Alternative Business Structures will and barristers be introduced from around 2011-12. The rules for foreign lawyers in These structures will allow any forms Chambers in England and Wales are of non-lawyer involvement in a law set out in Annex H of the “Code of firm, including up to 100 per cent Conduct for the Bar of England and non-lawyer ownership of a law firm, Wales”, issued by the Bar Council. subject to the satisfaction of various “fitness to own” criteria. The Future of Structures of the Provision of Legal Services in Further details can be obtained from England and Wales the Legal Services Board at In October 2007 the Legal Services www.legalservicesboard.org.uk Act became law and this new piece of legislation is paving the way for some potentially radical changes in the way in which legal services can be delivered in the UK. The Act permits the following new forms of legal structure: Legal Disciplinary Practices – which were introduced in March 2009 and which allow solicitors, barristers, other UK and foreign legal professions and up to 25 per cent of non-lawyer managers’ participation in a legal partnership. 23
  24. 24. Becoming a Solicitor of England and Wales If you wish to call yourself a Solicitor of 3. Meet character and suitability England and Wales, and to practise the requirements which will include the reserved areas of law you will need submission of references. to requalify. Until 2011, the Qualified Lawyer Transfer Regulations (QLTR) Experience Requirement are in force. These will be replaced Qualified lawyers from outside the with new regulations from around the European Union, the European beginning of 2011 which will introduce Economic Area and Switzerland are a new test regime and open this to a required to show that they have gained wider number of non-European and two years experience of working non-common law jurisdictions. in legal practice in a common law jurisdiction. At least one year must have At present the QLTR allows certain been gained by practising the law of overseas lawyers and other UK England and Wales. Such experience: qualified lawyers to become must have been undertaken in three solicitors in England and Wales. areas of common law, and must have covered contentious and There are three basic requirements non-contentious areas of practice. that applicants applying under the QLTR are required to meet (depending Qualified Lawyers Transfer Test on which primary jurisdiction that they The Qualified Lawyers Transfer are qualified in) before they can apply Test is a conversion test. It enables for admission as a solicitor of England lawyers who are qualified in certain and Wales. jurisdictions outside England and Wales (and barristers of England 1. Pass as many “Heads” (or individual and Wales) to qualify as solicitors examinations) under the Qualified in England and Wales. Lawyers Transfer Test as required. 2. Satisfy a two year legal experience The test covers four heads requirement of which at least one year (subject areas): must have been gained by practicing Head 1 – Property law in England & Wales (this does Head 2 – Litigation not apply to lawyers qualified in the Head 3 – Professional Conduct EU/EEA and Switzerland on conditions and Accounts of citizenship). Head 4 – Principles of Common Law 24
  25. 25. Becoming a Solicitor of England and Wales (continued) The requirements for different Before applying for admission as jurisdictions vary depending on a solicitor in England and Wales, an assessment of how closely qualified lawyers are required the qualification requirements to obtain a satisfactory standard in those countries and the type disclosure from the Criminal Records of law studied mirror the English Bureau, which includes details of requirements. More detail can be any current and spent convictions, found on the Solicitors Regulation police cautions, reprimands and final Authority website. warnings held on the Police National www.sra.org.uk Computer. They also make use of overseas criminal records information Specification and Providers services whenever appropriate. The SRA sets the Qualified Lawyer Failure to disclose convictions and Transfer Test specification. The other issues at the certificate of assessment is administered exclusively eligibility stage or subsequently is by SRA-authorised test providers. For a serious matter and may result details of test programmes and venues, in refusal of your application for you must contact test providers admission as a solicitor. directly. Before you arrange to sit the appropriate head(s) with a test provider, Further information, including details you must apply to the SRA for a of test providers, is available on the certificate of eligibility. Solicitors Regulation Authority website. www.sra.org.uk. Character and Suitability Qualified lawyers are also required to show that they are suitable for admission as a solicitor in England and Wales by declaring all convictions and other relevant matters when they apply for a certificate of eligibility to transfer to the roll of solicitors of England and Wales under the Qualified Lawyers Transfer Regulations. 25
  26. 26. Opening Offices of your Law Firm in the UK The UK has an open, transparent Definition of UK registered company and business-friendly system The majority of foreign investors will to encourage the formation of establish a UK registered company new businesses. when setting up in the UK. There are four different types of UK There are more than 2.6 million registered company: registered companies in the UK, with Private company limited by shares over 440,000 new registrations each (“Ltd”) – the members’ liability is year. No permission is required to limited to the amount unpaid on establish a business presence in the shares they hold. UK, although there are regulations on Private company limited by the use of business names and certain guarantee – the members’ liability business sectors which may require is limited to the amount they licences or authorisation (such as have agreed to contribute to the finance, defence and oil exploration). company’s assets if it is wound up. Private unlimited company – there Companies House is the key is no limit to the members’ liability. government organisation that Public company limited by shares co-ordinates the administration (“plc”) – the company’s shares of businesses in the UK. Detailed are offered for sale to the general guidance on the requirements for public through a stock exchange forming a company in the UK is and the members’ liability is limited available at: to the amount unpaid on shares www.companieshouse.gov.uk held by them. Independent professional advice on The vast majority of foreign forming a company in the UK can also businesses are established as a be obtained from accountants, solicitors company limited by shares, either and company formation agents. as a private limited company or as a public limited company. Most foreign companies set up a private limited company that is a subsidiary of the overseas company. For a formal definition of a subsidiary, please see: www.clickdocs.co.uk/glossary/ subsidiary-company.htm 26
  27. 27. Opening Offices of your Law Firm in the UK (continued) Setting up a UK registered company Alternative business structures for It is a straightforward process to foreign investors establish a company in the UK and Instead of registering a UK there are no separate rules for foreign company, foreign businesses can nationals. To register a company, establish a presence in the UK certain mandatory documents such as through the following: the “Memorandum of Association” and a) A branch “Articles of Association” must be filed b) A place of business with Companies House (for England, c) A partnership Scotland and Wales) or with Companies d) A limited partnership Registry (for Northern Ireland). e) A limited liability partnership f) A joint venture The documentation can be prepared g) A European public limited and the company registered in a day, company (SE) provided that standard Memorandum of Association and Articles of a) A branch Association are adopted (it can take A branch is part of an overseas considerably longer if tailor-made limited company organised to conduct Memorandum of Association and business through local representatives Articles of Association are required). in the UK. After opening a branch, “Ready-made” companies are the following documents must be available from company formation submitted to Companies House (or agents throughout the UK. Companies Registry in Northern Ireland) within a month: – a completed BR1 form, – a certified copy of the company’s constitutional documents (for example, the charter, statute and operating agreement), – a copy of the latest set of audited accounts required to be published in the overseas country, and – the registration fee (currently £20 in England, Scotland and Wales, and £35 in Northern Ireland). 27
  28. 28. Constitutional documents and Constitutional documents and accounts must be in the home country accounts must be in the home country language of the overseas company, language of the overseas company, with (if not in English) a certified with (if not in English) a certified translation made in the country where translation made in the country where the company was incorporated. the company was incorporated. b) Setting up a place of business c) Partnerships A place of business gives a physical Individuals, including overseas or visible indication that a company investors, can set up as a partnership may be contacted there. An overseas in the UK. The partners have “joint company also has to register if it and several liability” for all debts. This regularly conducts business from a means that if a partner or a number particular location in the UK, even of partners cannot pay, or be made if there is no physical sign of the to pay, their share of any debts, the company’s connection with it. other partners become liable (in addition to their own share of debt). Within a month of establishing a place of business, the company must d) Limited partnerships submit the following documents to A limited partnership consists of: Companies House (or Companies – one or more persons called Registry in Northern Ireland): “general partners” who are liable – a completed 691 form (for England, for all debts and obligations of the Scotland and Wales) or 641 form firm, and (for Northern Ireland), – one or more persons called “limited – a certified copy of the company’s partners” who contribute a sum constitutional documents (for or sums of money as capital, or example, the charter, statute and property valued at a stated amount. operating agreement), and Limited partners are not liable for – the registration fee (currently £20 in the debts and obligations of the firm England, Scotland and Wales, and beyond the amount contributed. £35 in Northern Ireland). 28
  29. 29. Opening Offices of your Law Firm in the UK (continued) A limited partnership must be registered LLPs have similar disclosure under the Limited Partnership Act of requirements to a company, including 1907. To register, all partners must sign the filing of accounts. They are also and submit Form LP5 – including details required to: of the business name, nature of the – file an annual return, business, commencement date and the – notify any changes to the LLP’s sum contributed by each limited partner membership, – to Companies House (or Companies – notify any changes to their Registry in Northern Ireland). An members’ names and residential overseas limited partnership cannot addresses, and usually register in the UK because the – notify any change to their registered main place of business of a limited office address. partnership has to be in the UK. For further detailed information on LLPs, please see: e) Limited liability partnerships (LLP) www.companieshouse.gov.uk/ An LLP is an alternative corporate infoAndGuide/llp.shtml business structure providing the benefits of limited liability but f) Joint ventures allowing its members the flexibility An overseas company can form of organising their internal structure a base in the UK by joining with a and tax arrangements as a UK company. Such joint ventures traditional partnership. (JVs) are usually made with limited companies or established as a Any new or existing firm of two or partnership. Information on possible more “persons” (in law a “person” JV partners is available from the can be an individual or a company) relevant UK trade association. For can incorporate as an LLP. An LLP further information, please contact is incorporated by registration at the Trade Associations Forum at: Companies House or Companies www.taforum.org Registry in Northern Ireland (following a similar process to that required for registering a company). 29
  30. 30. g) European public limited company Choosing a company name European Union legislation allows Regulations restrict the choice of a overseas companies to establish a company name. A company name European public limited company cannot be chosen if it is the same (also known as a “Societas Europaea” as an existing registered company or “SE”) in the UK. An SE can be or uses certain words regarded as registered in any country within the sensitive. For a list of sensitive words European Economic Area although please see: the registered office and head office www.companieshouse.gov.uk/ must be in the same country. There are aboutgbhtml/gbf3.shtml#appa several ways of forming an SE: – By merger Before applying to set up a company, – As a holding company or doing anything to change its name, – As a subsidiary it is recommended that a search – By a plc transforming into an SE of the company name index is undertaken. Please see: An SE must have share capital and www.companieshouse.gov.uk shareholders whose liability is limited in a similar manner to that of a plc. As The regulations on law firm name with a plc, an SE registered in the UK only apply to firms regulated by the may denominate its share capital in any Solicitors Regulation Authority currency it chooses, provided that at www.sra.org.uk least £50,000 is denominated in sterling. The major benefit of an SE is that the registered office can be transferred to another European country without a loss of legal status (avoiding, for example, the requirement to deregister the company in one country and reregister in another). For further detailed information on the procedures to establish an SE, please see: www.companieshouse.gov.uk/about/ gbhtml/gb06.shtml 30
  31. 31. Complying with UK Business Laws and Regulations Data protection in the UK Exporting data from the UK outside As a law firm setting up a business of the EEA in the UK, you will need to consider The DPA prohibits the transfer of carefully whether you will have any personal data outside the EEA to obligations under the Data Protection any country that does not ensure an Act 1998 (“DPA”). The DPA requires “adequate level of protection” for the that all organisations that handle rights and freedoms of data subjects in personal information comply with a relation to the processing of personal number of data protection principles data. Cross-border transfers of personal regarding privacy and disclosure. data are becoming more common Personal data means data that relates due to the flow of information over the to a living individual, such as their internet, the spread of multi-national name, address and salary details corporations and the increased trend and personal sensitive data meaning in outsourcing back office and HR data relating to racial or ethnic functions of organisations. origin, sexual orientation, trade union membership or religious beliefs. Your company may need to transfer data from its branch or UK subsidiary The DPA covers both UK registered to a company elsewhere. The UK companies and overseas companies data protection regime prohibits the who maintain an office, branch or transfer of personal data outside the agency in the UK and individuals EEA unless adequate safeguards are who are ordinarily resident in the UK. in place to protect the exported data. A law firm with a branch office in the If you do not have the consent of the UK will therefore need to comply with data subjects to transfer the data the DPA. outside the EEA then, unless transfer of the data is deemed necessary to fulfil a contract, the simplest way to ensure adequate data protection will be to use the European Commission model contract clauses or binding corporate rules in the case of intra-group transfers. 31
  32. 32. Money Laundering Identification documents There is a strict anti-money In the course of setting up and carrying laundering regime in the UK which out business in the UK, you are likely forms part of an initiative to tackle to need the services of professionals criminal activity worldwide. Money who will be subject to the anti-money laundering is the exchange of money laundering regime, for example, banks, (or other assets) obtained criminally solicitors, accountants, tax advisers for “clean” money (or other assets), and insurance brokers. Under ‘KYC’ that is, money with no obvious link to (know your customer) obligations, they its criminal origins. It includes money will need to carry out identification used to fund terrorism. and verification checks in respect of you and your business, monitor your The relevant UK requirements and business activities, and report any penalties are found in the Money suspicious activities to the Serious Laundering Regulations 2007, the Organised Crime Agency (SOCA). Proceeds of Crime Act 2002 and the The documents that they will require Terrorism Act 2000. from you as proof of identification and verification will vary according to whether you are an individual or a company. Individuals Documents you will typically need to provide include: Proof of identity (certified copy of a passport). Proof of address (certified copy of an official document which shows your address such as a utility bill or bank statement no more than three months old). Banks or other regulated professionals may carry out their own additional identification checks. 32
  33. 33. Complying with UK Business Laws and Regulations (continued) Companies Protect Intellectual Property Rights If you are part of a group, you will in the UK need typically to provide the following Intellectual property rights (IPR) documents (or certified copies) in provide competitive advantage and respect of the parent company in your can be one of the most important home country: assets that a company owns. They Constitutional documents. can be owned, transferred and Proof of solvency. exploited like any other form of Proof of identification/address personal property. (in the form described above) of the principal director/shareholder. The UK has established laws in place Copies of annual reports protecting a range of intellectual and accounts. property rights including: Copyright – protects original You can expect to be asked for literary, dramatical, musical detailed information about how and artistic works, including you plan to carry out business in software codes. the UK and will need to show that Patents – protects technical you are authorised to represent the inventions (products and company (for example, in the form processes), including computer of an original or certified copy of a implemented solutions and letter of authority on the company’s technical problems. letterhead). You should also be aware Designs – protects the appearance that banks are obliged to verify the of a product. chain of ownership of companies to Database rights – protects the the underlying beneficial owners to investment in either obtaining, understand the full structure of the verification or presentation of the company and to identify and check contents of a database. all sources of funding. Confidentiality – protects information. Trade marks – protects brands. 33
  34. 34. Copyright and database rights arise Trade marks and designs can both automatically on creation of work. be protected through registration. There is no system of registration for Rights in trade marks however can these rights in the UK. For copyright also arise through use and can be works however claim should be protected through a tortious claim laid to the rights that already exist. of passing-off. Similarly, rights in This can be done by ensuring designs will arise automatically on that all “works” are labelled with creation of the work. However, the an appropriate copyright notice registration system offers a quicker, identifying the owner and year of easier and often a more cost-effective creation. Accurate records of by who way of seeing off infringers (in the and when the works were created case of trade marks) and longer term should also be kept. protection (in the case of designs). Inventions can be protected by Confidential information in the UK is obtaining a patent. It is essential that protected by law even in the absence the invention and any know-how of a confidentiality agreement. It relating to the invention is kept is best practice however to use a confidential (throughout the world) confidentiality agreement wherever prior to the filing of the patent possible. The confidentiality agreement application. Any unprotected should accurately identify the disclosure of the invention (or any information that you intend to disclose part of it) will destroy the patentability and the purpose for which you intend of the invention. to disclose it. Even where the intended recipients have signed a confidentiality agreement, it is best practice to label all documents and materials containing confidential information “Strictly Private & Confidential”. 34
  35. 35. Employment in the UK Employee rights in the UK are derived Rights on termination of employment from both contractual provisions and including rights to a minimum period legislation, which is now derived of notice (according to length of predominantly from European law. UK employment), a statutory redundancy employment laws are varied and legal payment (where applicable) and the advice should be taken before acting right not to be unfairly dismissed. as the penalties for non-compliance can be severe and damaging for the Additional rights including the right reputation of your business. for male and female employees to receive equal pay and the Employment rights are diverse and right for all employees not to be include the following: discriminated against (whether Rights during employment including when recruited, during employment rights to a minimum level of or on termination of employment) wage prescribed by Government, on grounds of sex, marital status, statutory sick pay during periods of race, disability, sexual orientation, sickness, maximum weekly hours religion, belief or age. of work and prescribed rest breaks, rest periods and annual holiday Unfair dismissal entitlement, protection and (where In addition, legislation preserves applicable) payment during periods employees’ continuity of employment of maternity, adoption, paternity and and existing terms and conditions parental leave. where such employees are employed in an undertaking which transfers from one entity to another (eg in the context of the sale of a business) You cannot dismiss an employee who has worked for you for more than one year without a fair reason. There are six potentially fair reasons for dismissal including conduct, capability, illegality, redundancy, retirement and “some other substantial reason”. 35
  36. 36. Employment Contract Financial obligations A contract of employment may As an employer in the UK you have be written or oral and terms may be a number of financial obligations in express or implied. relation to your employees including the deduction of income tax and Legislation requires you as an employer employee national insurance to give all employees a written statement contributions from their salary at of their main terms and conditions source. You are also obliged to of employment within two months of make additional employer national commencing employment. You must insurance contributions. The level notify employees in writing of any of tax and national insurance change to the statement within one contributions depends on the month of the changes. In practice, many level of an employee’s earnings. employers in the UK have standard These deductions together with terms and conditions of employment for the employer national insurance their employees which extend beyond contribution must be paid over the statement required by legislation. to HM Revenue & Customs on a monthly basis. Redundancy payment An employee is entitled to receive redundancy payment if he/she has provided at least two years of service and has been dismissed on redundancy grounds. The redundancy payment is linked to the employee’s age, length of continuous service with you as the employer and their weekly pay. As the employer you must provide a written statement showing how the payment has been calculated, and you must also strictly follow certain prescribed procedures. 36
  37. 37. Employment in the UK (continued) Foreign workers In the absence of any specific tax Foreign nationals3 will need to apply planning employees seconded to for permission under the UK’s Points work in the UK are subject to UK Based System to be eligible to work income tax on their salary at a rate in the UK. The UK Border Agency of up to 40 per cent or 50 per cent issues leave which can be valid for for those earning over £150,000. up to a maximum of three years, after However, if a secondment package is which a foreign worker may apply for structured correctly, UK income tax an extension if needed. The proposed and national insurance contributions salary of the foreign worker should can be drastically reduced or in some not be below the prevailing minimum cases eliminated entirely. wage in the UK. In many cases, there should also be clear evidence that Below is a brief description of the a European Economic Area (EEA)4 main planning opportunities that may resident is not available to fill this exist for secondees from abroad to position. Please refer to the UK the UK: Border Agency for further information. If the UK has a Double Tax Treaty with your home jurisdiction it is possible Employee secondment packages to make a claim that results in A foreign company may wish to employees being able to work in the second employees to work in the UK for up to six months in each UK tax UK either with a group company or year (6 April to 5 April) without being a third party, such as a customer for liable to UK income tax on income example. Employees are normally derived from carrying our employment seconded on their existing terms and duties in the UK. conditions of employment, although additional terms (or a variation of existing terms) may be agreed for the duration of the secondment and it is possible for seconded employees to acquire UK employment rights whilst seconded to the UK. The Points Based System applies to anyone who is not a national of the European Union, Switzerland, Iceland, 3 Liechtenstein or Norway. See footnote 2 on page 15 4 37
  38. 38. Where an employee is being could be treated as being exempt seconded to the UK for less than from UK taxes if it is paid into a bank 24 months it is possible to agree account outside of the UK and other with HM Revenue and Customs necessary steps are taken. However (the UK tax authority) that the the personal allowance of £6,475 proportion of their salary that is (for 2008-09) is lost if this exemption spent on accommodation, food and is claimed. sustenance, council tax and utility bills and travel to work from home can Exemption from UK National be paid to them free of tax. Insurance (Social Security) Depending on the level of salary being Employees seconded from abroad paid to the employee these tax free to the UK are exempt from UK amounts, together with the tax free national insurance for a period allowance of £6,475 (2010-11) that of 52 weeks. The employer is all individuals working in the UK are also exempt from paying national entitled to, that earn under £100,000. insurance contributions during this period. These contributions could Claim that salary in respect of days be as high as 12.8 per cent of the working outside of the UK is only employee’s salary. taxable if received in the UK Where an employee is seconded to the UK but spends some time working outside of the UK (eg in mainland Europe) then the proportion of the employee’s salary attributable to days worked outside of the UK is not subject to tax in the UK provided it is not received into a UK bank account (or remitted to the UK in some other way). Therefore, if an employee spends three months a year working in Europe then 25 per cent of their salary 38
  39. 39. Employment in the UK (continued) Domicile of the UK (eg rents from non-UK The concept of domicile is almost property, interest on a non-UK bank unique to the UK and being designated account, dividends from a non-UK non-domiciled can affect your tax company, etc.) are taxable only if liability. A person is domiciled in the remitted to the UK. Therefore, UK tax place where they consider home. can be avoided on non-UK income Normally this is defined in terms of a and gains simply by keeping these person’s “domicile of origin” which funds outside of the UK. is taken from their father but if strong ties are formed with a new jurisdiction If the non-UK income or gains total and old ties are severed with the old is less than £2,000 in a tax year jurisdiction, a “domicile of origin” will then the “remittance basis” can be replaced with a “domicile of choice.” be relied upon by non-domiciled HM Revenue & Customs generally individuals. However if the unremitted accept that if a person has come foreign income or gains exceeds to the UK solely for the purposes of £2,000 in a tax year then there is a working with a view to returning to cost to submitting the claim on the their home country in the future, the “remittance basis”. For individuals “domicile of origin” is retained so who have been resident in the UK for employees seconded temporarily from seven or more years (out of the last abroad to the UK will be considered ten years) there may be a tax liability. foreign domiciled for UK tax purposes. For individuals with a significant non-UK income an annual charge of Normally an individual who is tax £30,000 can be paid to discharge that resident in the UK is subject to UK liability. This is separate to any tax income and capital gains tax on due on funds remitted to the UK. This their worldwide income and gains. is a complex area and advice should However, where that person is be sought before seeking to rely on or domiciled outside of the UK, it is claiming on the “remittance basis”. possible to submit a claim so that the income and gains arising outside 39
  40. 40. Health and Safety As an employer or business owner, Liability insurance you will be legally responsible for Under UK law, all businesses, the self- any damage or injury caused by employed and employees are required negligence or breach of duty to to comply with the statutory health employees, customers and the public. and safety regime. This is governed by It is important therefore that you the Health and Safety at Work etc. Act take out liability insurance to cover 1974, and includes a raft of associated any compensation and legal costs regulations, as well as guidance and that may arise if you are found to be Approved Codes of Practice. at fault. The main types of liability insurance are listed below: The legislation aims to protect the Employers’ liability health and safety of employees, compulsory insurance. contractors and members of the Public liability insurance. public. Some of the key features of Product liability insurance. the legislation that apply to most Pollution risk insurance. businesses include the requirements to: Property owners’ liability insurance. Register with either the Health and Professional indemnity insurance. Safety Executive (HSE) or local Directors’ and officers’ liability. authority (depending on the type of business). Failure to have adequate cover Appoint someone competent to can have serious consequences, monitor your health and safety especially for small businesses. You duties (this may or may not be an should therefore seek specialist external consultant). advice as to the appropriate type and Provide health and safety training level of insurance that is adequate for for all workers. your business. Ensure your workers have safe equipment to use at work, including appropriate visual display equipment and report certain work- related accidents, diseases and dangerous occurrences. 40
  41. 41. Immigration to the UK Any foreign national seeking to set Tier 1 up a business or work in the UK, will This tier covers: need to obtain permission to do so Highly skilled workers who can before travelling to the UK. come to the UK to look for work or self-employment opportunities. The UK immigration rules recently They do not need a job offer and underwent fundamental changes they will be awarded points for as the UK moved to a Points Based qualifications, previous earnings, System (“PBS”). experience and age. Entrepreneurs who want to invest in In addition to the points requirement the UK by setting up or taking over for each tier, you are likely to have to and being actively involved in the demonstrate that you have a specified running of one or more businesses amount of money to support yourself in the UK. An entrepreneur will not and any dependants, and that you are be able to take up employment in able to speak English. the UK. Investors who want to make a The PBS consists of five tiers. Those substantial financial investment in that will be relevant to an individual the UK. An investor does not need intending to set up business or a job offer in the UK but will be work in the UK, or a foreign law firm permitted to work if he wishes. wanting to transfer employees to the Post-study workers who are UK, are as follows: graduates who have studied in the UK. They do not need a job offer and are free to look for work. This category acts as a bridge to other Tier 1 and Tier 2 categories. 41
  42. 42. Tier 2 You may wish to come to the UK on a This tier includes: short-term basis to do business. An Intra-company transfers – for individual can come to the UK as a example, where an overseas business visitor for up to six months company wants to transfer an provided they are only transacting existing employee to a related business directly linked to their business in the UK. employment outside the UK and that A job offer that passes the they continue to be paid a salary “Resident Labour Market Test” – from abroad. The individual must not, the UK employer will have to show however, undertake productive work in that the job has been advertised the UK (ie a hands-on management or in the UK/EEA and that there is no administrative role or having any direct suitably qualified worker from the executive responsibilities). UK/EEA to fill the post. Shortage occupations – a list of As a non-EEA or Swiss national, recognised shortage occupations is you should check visa requirements published by the UK Border Agency when planning to come to the UK as – this does not include lawyers. a business visitor. All applicants in Tier 2 must have a UK Trade & Investment have certificate of sponsorship from their investment specialists who are proposed UK employer, which must happy to give advice or referrals on be registered as a sponsor with the immigration issues for companies UK Border Agency. The job must be wishing to set up in the UK. skilled and the worker must be paid the appropriate UK salary rate. Prepared by the Law Society of England and Wales in conjunction Please check the UK Border Agency with the Ministry of Justice and website for further information UK Trade & Investment. on the PBS. www.bia.homeoffice.gov.uk 42
  43. 43. Useful Contacts National Ministry of Justice UK Trade & Investment 102 Petty France Kingsgate House London 66-74 Victoria Street SW1H 9AJ London Tel: +44 (0)20 3334 3555 SW1E 6SW www.justice.gov.uk Tel: +44 (0)20 7215 4904 www.ukti.gov.uk Bar Council Law Society 289-293 High Holborn London International Division WC1 7HZ The Law Society Tel: +44 (0)20 7242 0082 113 Chancery Lane www.barcouncil.org.uk London WC2A 1PL Bar Standards Board Tel: +44 (0)20 7242 1222 289-293 High Holborn Email: internationaldivision@ London lawsociety.org.uk WC1 7HZ www.lawsociety.org.uk Tel: +44 (0)20 7611 1444 www.barstandardsboard.org.uk Solicitors Regulation Authority Ipsley Court Berrington Close UK Regions Redditch B98 OTD Scottish Development International Tel: +44 (0)15 2750 4450 Atlantic Quay www.sra.org.uk 150 Broomielaw Glasgow G2 8LU Tel: +44 (0)14 1228 2828 www.sdi.co.uk 43
  44. 44. Invest Northern Ireland Yorkshire Forward Bedford Square Victoria House Bedford Street Victoria Place Belfast Leeds BT2 7ES LS11 5AE Tel: +44 (0)28 9023 9090 Tel: +44 (0)11 3394 9600 www.investni.com www.yorkshire-forward.com International Business Wales East Midlands Welsh Assembly Government Development Agency Trafalgar House Apex Court 5 Fitzalan Place City Link Cardiff Nottingham CF24 0ED East Midlands Tel: +44 (0)14 4304 5500 NG2 4LA www.ibwales.com Tel: +44 (0)11 5988 8300 www.emda.org.uk One NorthEast Stella House Advantage West Midlands Goldcrest Way 3 Priestly Wharf Newburn Riverside Holt Street Newcastle upon Tyne Aston Science Park NE15 8NY Birmingham Tel: +44 (0)19 1229 6200 B7 4BN www.onenortheast.co.uk Tel: +44 (0)12 1380 3500 www.advantagewm.co.uk North West Regional Development Agency East of England Development Agency PO BOX 37 Victory House Renaissance House Vision Park Centre Park Chivers Way Warrington Histon Cheshire Cambridge WA1 1XB CB24 9ZR Tel: +44 (0)19 2540 0100 Tel: +44 (0)12 2371 3900 www.nwda.co.uk www.eeda.org.uk 44
  45. 45. Useful Contacts (continued) Think London Level 35 25 Canada Square London E14 5LQ Tel: +44 (0)20 7718 5400 www.thinklondon.com South East England Development Agency Cross Lanes Guildford GU1 1YA Tel: +44 (0)14 8348 4200 www.seeda.co.uk South West of England Regional Development Agency Corporate Headquarters Sterling House Dix’s Field Exeter Devon EX1 1QA Tel: +44 (0)13 9221 4747 www.southwestrda.org.uk 45

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