How Indian IT, SaaS and Digital Companies Expand to the UK

The UK is worth a fresh look in 2026 because the India–UK trade agreement (CETA) came into force on 15 July 2026, and the UK remains Europe's deepest market for technology buyers, capital and specialist talent. The UK government says the UK captured a record 48% of European venture capital funding in 2026 up to June. Outside tech? Our general guide to setting up a UK subsidiary of an Indian company covers any sector.

Key points

• Most Indian tech companies enter the UK through a wholly owned UK subsidiary, set up under India's Overseas Investment (ODI) rules. A branch or an acquisition can suit specific cases.

• The UK can play eight different roles, from customer market to international commercial HQ. Decide which one you need before choosing a structure.

• Visas: UK Expansion Worker before the UK entity trades, then Senior or Specialist Worker or Skilled Worker. CETA did not create a new visa.

• UK corporation tax is 25% (19% on profits up to £50,000, with thresholds shared across associated companies, including an Indian parent). VAT registration applies above £90,000 of taxable turnover.

• Tax follows functions: who contracts, who sells and who builds the product decides where profit is taxed, not where the company is registered.

This is Greenwolf Advisors' pillar guide to the India→UK technology corridor. Each section links to a deeper article. If you want the founder's-eye view first, read why founders choose the UK.

Why the UK now: CETA in force since 15 July 2026, UK tech buyers, capital and talent

The UK matters now because three things line up: a new trade framework with India, a large and sophisticated technology-buying economy, and Europe's biggest pool of technology capital.

A new framework. The UK–India Comprehensive Economic and Trade Agreement entered into force on 15 July 2026. Bilateral trade was already £48 billion in 2025, according to the UK government.

For technology companies, the relevant chapters are trade in services, digital trade (including recognition of electronic contracts and authentication) and temporary movement of business people. A companion Double Contributions Convention, in force the same day, lets qualifying employees on temporary assignment stay in their home social security system for up to 60 months. Our India UK free trade agreement guide sets out what changed and what did not.

Buyers. The UK government's sector plan update reports that the digital and technologies sector generated £158 billion of gross value added in 2024, about 6% of the UK economy, and employed 1.33 million people. Financial services, insurance, professional services, healthcare, retail, defence and the public sector all buy technology at scale.

Capital and talent. The same June 2026 update says the UK captured a record 48% of European VC funding so far in 2026, and UK AI companies raised £8.3 billion across 1,284 deals in 2025.

None of this means every Indian tech company needs a UK entity. A ₹30 Cr IT services firm with two £50,000 UK customers can usually keep contracting from India. A ₹100 Cr company with 30% of revenue from international clients, enterprise buyers asking for UK contracting and plans for external capital is in a different position.

Eight roles the UK can play for an Indian tech company

The UK can do eight different jobs for an Indian technology business, and the right structure depends on which ones you actually need.

Two further routes into the UK are often overlooked. The first is following Indian customers: a provider serving Indian banks, manufacturers or conglomerates can support their UK operations, then use that reference to win local clients. The second is the UK as the decision centre: winning a UK-headquartered multinational may lead to work in many countries, because the technology buying decision is made in London.

Most companies move along this sequence over years, not months. Greenwolf's first job is to identify where on the continuum a company actually is, because a structure built for role 8 is wasteful for a company that only needs role 1.

UK subsidiary, branch or acquisition: which entry route?

For most Indian tech companies, a UK private limited subsidiary is the default because enterprise customers, banks and employees are used to dealing with a UK company, and it ring-fences liability. A branch (registered as a UK establishment of the Indian company) can work for a narrow sales presence, and an acquisition buys customers and capability that would take years to build.

Registering the subsidiary. Incorporating a UK private limited company costs £100 online at Companies House and usually takes about 24 hours, according to GOV.UK. Directors and people with significant control may need to verify their identity with Companies House first and provide their personal code.

The step-by-step process, including what Indian directors need, is in our guide to UK company formation from India. Opening a bank account is often the slowest part; see our guide to a UK bank account for an Indian company.

Indian regulation (ODI). An Indian company investing in a UK subsidiary does so under the FEMA (Overseas Investment) Rules and Regulations 2022 and the RBI Master Direction on Overseas Investment issued on 22 August 2022. Under the automatic route, an Indian entity's total financial commitment to overseas entities generally cannot exceed 400% of its net worth as per its last audited balance sheet, and the investment is made and reported through an authorised dealer bank. Our explainer on overseas direct investment rules covers the forms, timelines and restrictions, including the limits on structures that invest back into India.

Branch or subsidiary? The branch is simpler on day one but harder to defend on tax and liability once UK staff start negotiating and signing contracts. We compare the two in detail in UK subsidiary vs branch.

Acquisition. Imagine a ₹300 Cr Indian services company with 400 engineers and weak UK distribution, and a £3m UK firm with 50 enterprise customers, deep domain knowledge and expensive delivery. Combined, UK distribution plus Indian delivery can be worth more than either alone.

The work involves ODI, valuation, diligence, financing, post-deal transfer pricing and management arrangements, which we cover in how to acquire a UK company from India.

Planning your UK entry? Get the India→UK corridor checklist, or book a 30-minute structuring call with Greenwolf Advisors to test entity, people and tax choices against your growth plan.

Visas: UK Expansion Worker and Global Business Mobility routes

Your first UK people will usually come through one of three routes: UK Expansion Worker before the UK entity starts trading, Senior or Specialist Worker for existing staff once it trades, and Skilled Worker for UK hires or long-term moves.

Source: GOV.UK, accessed 5 October 2026.

The UK entity needs a Home Office sponsor licence: £611 for a Temporary Worker licence (used for Expansion Workers) or a small sponsor's Worker licence, and £1,682 for a medium or large sponsor's Worker licence. For a new UK business, GOV.UK says a provisionally rated Expansion Worker licence can first assign one certificate, to the authorising officer; once that person has a visa, the licence can be upgraded and up to 9 more certificates requested.

Read the full requirements in our UK Expansion Worker visa guide, and how the routes compare in our article on the Global Business Mobility visa versus Skilled Worker.

Two points are often misunderstood. First, CETA did not create a new visa route. The UK government's business mobility explainer says the deal locks in access to existing routes while the UK keeps control of salary thresholds, sponsorship and fees. Second, Indian nationals still need a Standard Visitor visa (£135) for business meetings and negotiations; visitors cannot do productive work for the UK entity.

Social security is a real cost lever. Under the double contribution convention between India and the UK, qualifying employees sent from India for up to 60 months can remain in the Indian system with an EPFO certificate of coverage, avoiding UK National Insurance on the same pay.

Settlement rules are also under review: the Home Office has consulted on an "earned settlement" model with a longer baseline.

Tax: UK corporation tax, VAT, India–UK DTAA and transfer pricing

A UK subsidiary pays UK corporation tax on its own profits, and the Indian parent is taxed in India on what it earns, including service fees and dividends from the UK. The treaty and transfer pricing rules decide how profit is split.

Corporation tax. The main rate is 25% for profits over £250,000, and the small profits rate is 19% for profits of £50,000 or less, with marginal relief in between. GOV.UK notes that the £50,000 and £250,000 thresholds are divided by the number of associated companies, and an Indian parent and its other subsidiaries can count.

A new UK subsidiary of a group with several companies may therefore pay close to 25% on modest profits. Our guide to the UK corporation tax rate for Indian-owned companies covers reliefs, including R&D, and filing.

VAT. A UK company must register once taxable turnover exceeds £90,000 in a rolling 12 months, or is expected to within 30 days. A business established outside the UK that makes taxable supplies in the UK must register regardless of turnover, although B2B services sold from India to UK businesses are usually accounted for by the UK customer under the reverse charge. See UK VAT registration for non-resident and Indian companies.

The tax treaty. The India–UK double taxation convention generally limits source-country tax on royalties and fees for technical services to 10% or 15%, depending on the category, and provides credit for tax paid in the other country. The treaty also defines when a company has a permanent establishment in the other country. Our India UK DTAA explainer covers each income type.

Transfer pricing. Every service fee, licence or recharge between the Indian parent and the UK subsidiary must be at arm's length. India's transfer pricing rules and the annual accountant's report (Form 3CEB) apply to the Indian side.

In the UK, small and medium-sized groups have generally been exempt from UK transfer pricing rules, subject to conditions. The practical question is which entity performs sales, delivery, product development and risk management, and therefore which deserves the residual profit. See transfer pricing between India and a UK subsidiary.

Permanent establishment risk. If UK-based staff habitually negotiate and conclude contracts for the Indian company, the Indian company may have a UK permanent establishment even with a UK subsidiary in place. Contracting, signing authority and job descriptions should match the structure on paper.

What CETA does not change. The trade agreement does not alter corporation tax, withholding tax, VAT, GST or transfer pricing.

When to think about a UK holding company (and when not to)

A UK holding company above the Indian business is worth considering only when the group's next stage of customers, capital and management is genuinely international, and the change is planned before a funding round rather than during diligence.

Signs it may be worth exploring:

• International investors are leading the next round and want to invest at the top of a non-Indian group.

• Most revenue and senior management are, or will be, outside India.

• Product and IP development is genuinely shifting towards the UK.

• An exit to an international buyer is a realistic medium-term plan.

Reasons to wait:

• UK revenue is small, and the main reason is a general feeling that UK investors prefer UK companies.

• The Indian business holds valuable IP; moving it can trigger Indian tax and transfer pricing questions.

• Existing Indian shareholders, ESOP holders and lenders would need complex restructuring under FEMA and Indian tax law.

A "flip" changes ownership, ESOPs, IP, tax residence and exit routes all at once, and Indian overseas investment rules limit some structures that invest back into India. Our guide to a UK holding company for an Indian startup explains the mechanics and the FEMA constraints.

The Greenwolf view

Commercial design first; tax follows functions, risks and substance. A £100 Companies House registration does nothing on its own. The value comes when there is a real UK-facing business, and the structure should be built around what that business does.

We work through the corridor in stages:

• Which role does the UK play for you today, and in three years? Customer market, sales front end, hub, capital, talent, acquisition or commercial HQ.

• Who owns the customer contract? India or the UK entity, and why. This drives VAT, permanent establishment risk and transfer pricing.

• What does India provide to the UK, and how is it paid? Delivery services, product licence or a mix. Remuneration should match who performs which functions.

• Where is the IP, and where is it being developed? Do not move valuable IP casually; follow where development, enhancement and control actually happen.

• Who moves, on which visa, and on whose payroll? Design the visa, social security and employment contract together.

• How is the UK funded, and how does cash come back? Equity, loans or service fees under ODI, then dividends, interest or fees as appropriate.

• What is the exit? Sale of the UK business, the Indian business or the whole group each points to a different structure.

The most useful question for an Indian technology founder is not "should we open in the UK?" but "at what point do we stop being an Indian IT exporter and become an India–UK technology company?" The answer determines what should sit in Britain, and the tax follows from there.

This article is general information, not advice for a specific case. Rules, rates and thresholds change; check the official sources and take advice before acting.