London: A City for Entrepreneurs and Startups

By Helen Vaudrey Updated Dec 02, 2015

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Introduction
Growth in startups
Global Convenience
Tech City

London is the beating heart of business within the European Union. According to Brookings Institution, London has the fifth largest metropolitan economy in the world, which continues to grow at a steady rate. London thrives off small business ventures and offers tempting incentives to entrepreneurs wishing to launch a startup in the city.

Boris Johnson, Conservative Party MP and London mayor, is a strong advocate of business in London; he believes that investing in entrepreneurial talent opens doors of opportunity for thousands of startups. Boris is a colorful figure in the British political sphere, and is candid about the role that business plays for society as a whole in London.

“There’s a moral purpose to wealth creation that is perhaps not even acknowledged by the wealth creators” says Boris in an interview with the London Evening Standard. “They may not think as they get up in the morning, ‘What I’m going to do today is help people on lower incomes to achieve better lives’. What they are probably thinking of is ‘I’m going to shaft my competitors so I can make more profits’. But if that means they deliver higher taxes, more jobs, more growth — which they do — then that’s a good thing for society.”

Growth in startups

Over the past five years, the UK government has made a lot of a noise around growing business in London and beyond, with particular emphasis recently being placed on creating an economic ‘northern powerhouse’ in Manchester.

Chancellor George Osborne announced further plans to encourage business growth in England in early October 2015. He promises business rate reforms to be implemented over the coming years, meaning that councils will be able to retain 100% of growth in business rates once the plans are fully implemented. The Greater London Authority (GLA) expects that these changes will create around 40,000 additional jobs in the city. From 2020, councils will be able to use this freedom to stimulate growth and investment.

Aside from this future promise, conducting business in London also offers a wide range of other benefits for entrepreneurs too. Currently, London offers one of Europe’s lowest tax regimes – which is no doubt part of the reason why it boasts more European corporate headquarters than any other city. As such, high taxes on corporations and startups are in no danger of increasing any time soon, as business in London is incentivized.

Global Convenience

London also benefits from a time zone which overlaps with countries that collectively generate 99% of the world’s GDP. London's trading day starts as the Tokyo market closes and a few hours before New York Stock Exchange opens. Additionally, the widespread use of English around the world gives London an edge over other European competitors such as Frankfurt, Paris or Milan.

Additionally, London is also Europe’s most accessible city, with rail and air links providing fast and efficient links to overseas territories. If an international entrepreneur wishes to relocate to London, then the visa application is also flexible for startups. To apply for a Tier 1 entrepreneur visa, applicants must have access to £200,000 investment funds (aroundUS$306,000 in October 2015). If accepted, the visa is granted for 40 months, which is extendable by a further two years.

Tech City

Although the city is famous for its financial district, startups are a thriving scene, whicht continues to grow. Tech City UK is a publically funded nonprofit organization that was set up by the government in 2010. The team aims to make London the biggest tech city in Europe, building on the existing east London tech cluster known as the ‘Silicon Roundabout’. Its Future Fifty program has raised over US$1.2 billion for companies involved in for digital businesses, 63% of which was raised in 2014 alone. If you’re a tech entrepreneur, with an idea to bring to the city, now is as exciting a time as ever.

The Mayor, sums up the attitude the city harbors to people who wish to shine in business, whether they come from financial, tech backgrounds or another background altogether.

"We want to let Londoners make the most of their innate talent and flair so that they make London’s economy even more productive and successful and we want all Londoners to have the opportunity to find fulfilling jobs. That also means ensuring the conditions are right for the businesses that employ them to flourish."