Employing in the UK FinTech Sector Without Setting Up a UK Company

Having spent much of my career helping companies recruit internationally, one thing I’ve noticed is that businesses often assume they need to establish a legal entity before they can employ someone in a new country.

It’s an understandable assumption, but it’s not always the case.

Since moving into the Employer of Record (EOR) world, one of the questions I’m asked most often by overseas companies is simply, “Can we hire someone in the UK without setting up a UK company?”

In many situations, the answer is yes.

For fast-growing fintech businesses, particularly those expanding from the US, Europe or Asia, using an Employer of Record can be a sensible way to establish a presence in the UK without the cost, time and commitment of incorporating a local business before you know whether the market is right for you.

Why the UK remains attractive

The UK continues to be one of the strongest fintech markets anywhere in the world. Alongside London’s established financial sector, there are thriving technology hubs across cities such as Manchester, Leeds, Bristol, Edinburgh and Birmingham.

Whether you’re looking for software engineers, compliance specialists, payments experts, product managers or commercial leaders, the UK offers a deep pool of experienced talent.

The challenge isn’t usually finding good people. It’s understanding how to employ them correctly.

It’s about much more than payroll

One of the biggest misconceptions I come across is that employing someone overseas is simply a case of running payroll.

In reality, UK employment comes with a number of legal responsibilities. Employment contracts need to comply with UK legislation. Employers have obligations around PAYE, National Insurance, pension auto-enrolment, statutory leave, sick pay and ongoing payroll reporting to HMRC.

None of these are particularly difficult when you’re familiar with them, but they can feel daunting if it’s your first employee in the UK.

That’s where an Employer of Record comes in.

The EOR becomes the legal employer, taking responsibility for employment compliance and payroll, while the employee works day-to-day as part of your business. From your employee’s perspective, very little changes. From your perspective, you gain the ability to hire quickly without first establishing your own UK entity.

A common scenario

Quite often we speak to businesses that have secured funding or won a new customer and need someone in the UK as soon as possible.

Setting up a UK company may well be part of their longer-term plans, but it doesn’t necessarily make sense if they’re only hiring one or two people initially.

Using an Employer of Record gives them the opportunity to test the market, build a local presence and then decide later whether establishing their own company is the right next step.

We’ve seen this approach work particularly well for growing fintech businesses that need to move quickly but still want to remain fully compliant.

Recruitment and employment under one roof

One advantage we have at Hanover is that our background isn’t purely in EOR.

For more than 30 years, Hanover has been helping clients recruit across financial services, banking, fintech, insurance, asset management, private equity, hedge funds, wealth management, healthcare and professional services.

Sometimes clients come to us having already identified the person they want to employ, in which case we simply provide the EOR solution. Other times, they’re still looking for the right individual. Being able to support both the recruitment and employment side of the process often makes life much easier, particularly for businesses entering the UK for the first time.

Is an Employer of Record the right option?

Every business is different, so there isn’t a single answer that suits everyone.

If you’re planning to build a substantial UK operation from day one, establishing your own company may well be the right approach.

If, however, you’re hiring your first employee, testing the market, supporting a new client or simply want to move quickly without the administration of setting up a UK entity, an Employer of Record is well worth considering.

One thing I’ve learned over the years is that international expansion rarely follows a perfectly planned route. Markets change, projects evolve and recruitment timelines move faster than expected. Having flexibility can be incredibly valuable.

If you’re considering employing someone in the UK and would like an honest conversation about the options, I’d be happy to help. And if you’ve not yet found the right person, that’s a conversation Hanover has been having successfully for more than three decades. Reach out to me today.