The top five things UK businesses need to consider when going global

UK businesses have always had an eye for growth beyond our shores, and even more so when growth at home is hard to find. But with tax traps and compliance hurdles at every turn, often varying widely from one country to another, it can be a daunting prospect for those businesses tapping into international markets for the very first time. In 2024, the Office for National Statistics reported that UK business with stock or a direct investment in overseas entitles hit a staggering £1,856bn – a clear indication of international aspiration.  UK businesses seeking growth overseas are joining a lucrative club. They are also travelling a well-trodden path and can learn from the thousands of entrepreneurs that have gone before them. Here are five lessons to keep in mind when considering international growth.

1. Market entry
There is no one-size-fits-all approach to overseas expansion, but the first and foremost question to answer is ‘where?’ Sometimes, that might be obvious. To grow in the US, for example, a US footprint will be needed. But in Europe, still our largest trading partner, it is sensible to consider the ease of doing business, local regulation and cultural fit.  With location settled, setting up a local subsidiary might feel the obvious move, but is not always the most efficient or appropriate. Creating a local company will bring varying and often high levels of compliance together with tax and legal obligations – even if the revenue is not there. It can also be costly and time-consuming to unwind if the market does not develop as hoped. More importantly, it can lock a business into a structure that does not reflect how it actually trades in that market. For example, where activity is initially limited to sales generation, perhaps testing the market, a distributor or agent model may provide faster access with significantly lower risk and cost. Identifying the right partner is critical but can be made easier through local networks, sector contacts and professional advisers with in-market experience

2. Understand your tax exposure early
Many entrepreneurs assume that tax only becomes relevant once a formal entity is established. However, a taxable presence can be triggered much earlier. Simply having people on the ground working from a fixed place of business or concluding contracts can create a permanent establishment creating local tax liabilities. Without a clear picture of the tax landscape, it is very easy to inadvertently create back-dated tax liabilities or penalties. Businesses can also face the challenge of allocating profits between jurisdictions. Without appropriate transfer pricing policies, this can lead to double taxation or disputes with tax authorities over where value is created. In our experience, these issues are rarely identified at the outset but can become difficult and costly to unwind later.

3. Indirect taxes hit directly
Indirect taxes, such as VAT, tend to be one of the most common areas where mistakes are made – and where mistakes have an immediate commercial impact. Countries apply VAT, or sales taxes, in different ways and at different rates. In some instances, a business will need to register before making any sales, whilst in other jurisdictions that obligation will depend on turnover thresholds or even customer types. For digital services, the rules shift again, with the tax due where the customer is physically located rather than the supplier. Getting this wrong can directly affect pricing and margins. Businesses may find themselves absorbing tax costs they had not anticipated or pricing themselves out of the market. Errors can also trigger audits by local tax authorities and not understanding the rules and procedures at borders can lead to delays at customs when goods move between countries.

4. Employment requirements 
A UK business might be tempted to send one of its key members of staff to get the office started. Whilst that might work on a short-term basis, it rarely is a suitable long-term solution. Even where UK staff are temporarily posted overseas and paid in Sterling via a UK payroll, local tax and social security liabilities can arise. This can create unexpected costs for both employer and employee. Hiring local staff is often essential to accelerate growth, yet employment regulations vary widely between countries and are often more complex than expected. Employee protections are frequently stronger than in the UK, affecting probation periods, termination rights and redundancy costs. There is also the risk of misclassifying workers as contractors when they are, in practice, employees – something that can lead to backdated taxes, penalties and legal claims. These factors need to be understood and factored into international growth plans from the outset.

5. Operational basics 
The operational basics of establishing an overseas footprint cannot be underestimated – from intellectual property and data to opening a bank account and getting paid. Ensuring that intellectual property is appropriately protected in each jurisdiction is particularly important, especially where brand, technology or proprietary processes underpin value. Data protection rules may also differ from the UK, requiring adjustments to systems and processes. Attention to where data is held is vital. Opening a local bank account can be a lengthy process, particularly where there is no established local presence. Without it, collecting revenue and paying suppliers becomes difficult. Currency exposure can also erode margins if not managed carefully, particularly in volatile markets. Businesses can also face challenges moving cash between countries, whether via dividends, intercompany charges or loans, often complicated by withholding taxes and local restrictions. It is all too easy for cash to become tied up overseas through administrative friction. Going global is not just a growth strategy – it is a structural shift in how a business operates. The decisions made early on shape everything that follows, from profitability to risk. Those that take the time to get the fundamentals right put themselves in a far stronger position to scale. Those that do not often find themselves retracing their steps at significant cost.