London as a base for Asian family enterprises: mobility, tax and substance

Why the question has changed

Until 2022 a family with capital could acquire UK residence through the Tier 1 (Investor) route and plan the rest later. That route is closed and has no successor. Since 6 April 2025 the remittance basis of taxation for non-domiciled residents has been replaced by a residence-based regime for foreign income and gains, with relief limited to the first four years of UK residence for new arrivals. And since 22 July 2025 the sponsored work routes test skill at degree level and salary against going rates, with B2 English from January 2026. The combined effect is that London is now available to families on the basis of work, enterprise or talent, assessed on substance, and that the tax consequences of being there arrive sooner.

For family enterprises from Singapore, Hong Kong, Japan, Korea and Taiwan this is not necessarily unwelcome. Groups that already operate in London through a trading subsidiary, or that intend to, have the raw material the UK rewards. The planning task is to align three regimes that count days and test substance differently.

The immigration architecture for a family group

A group with no UK entity starts with UK Expansion Worker: a provisional sponsor licence for a registered but non-trading UK entity, up to five senior staff on 12-month grants to a two-year maximum, on the strength of three years' overseas trading and a credible expansion plan. Within two years the UK entity should be trading and hold a Worker licence, at which point the principals move to Skilled Worker (RQF 6 role, £41,700 or the going rate, B2 English, five-year settlement) or, for bounded assignments, Senior or Specialist Worker (£52,500, no English, no settlement, five years in six or nine in ten for those at £73,900 or more).

The next generation has three further options that do not depend on the group. A family member with a genuinely new venture may be endorsed under Innovator Founder and settle after three years if the business meets two of the growth criteria. A member with a research or technology record may qualify for Global Talent. A recent graduate of a university on the Global Universities List may use High Potential Individual for two years to find a role inside or outside the family business. Each of these builds a UK record that is independent of the group, which is exactly what the Home Office, and later a board or a regulator, will want to see.

What the architecture does not provide is residence for a principal who will not work. A spouse accompanies as a dependant with full work rights; parents do not, other than under the restrictive adult dependent relative rules. A patriarch who wishes to live in London without a role must qualify through a family route or accept visitor status, with its six-month limit and prohibition on work.

Substance: what the three regimes test

The Home Office tests whether the UK entity is genuinely trading, whether the sponsored role is a genuine vacancy at the going rate, whether the overseas and UK entities are linked by common ownership or control, and whether the transferee really did the overseas job for 12 months. It tests this at licence application, at each certificate, and at compliance visits that examine the sponsor's own records. A UK subsidiary with a registered office, no staff and a director who lives in Singapore fails every one of those tests.

HMRC tests two things. For the company, whether it is UK resident by incorporation or by central management and control, and whether an overseas group company has a UK permanent establishment through a dependent agent or fixed place of business, which a principal working from London for the overseas parent can create. For the individual, residence under the Statutory Residence Test for each tax year from 6 April to 5 April: automatic residence at 183 days; automatic residence through a UK home used for 30 days with no overseas home used as much, or through full-time UK work; otherwise the sufficient-ties test, under which a person with family, accommodation and work ties in the UK becomes resident at 46 days if resident in any of the three prior years. Executive families routinely become UK tax resident earlier than they expect because the spouse and children are in London and the home test or the ties test is met.

The home jurisdiction tests whether the group's UK activity has shifted management and control, whether transfer pricing between the entities is at arm's length, and whether the principal has ceased to be resident there under its own rules and the applicable treaty. Singapore, Hong Kong and Japan each have distinct residence tests and distinct treaty tie-breakers with the UK, and a principal who is resident in both jurisdictions is allocated under the treaty by permanent home, centre of vital interests and habitual abode, in that order. The family's property, school and board arrangements decide the result.

Aligning the day-counts

Three day-counts apply to a mobile principal. For settlement, Appendix Continuous Residence allows no more than 180 days outside the UK in any rolling 12 months, with limited disregards; for naturalisation, no more than 450 days' absence in five years and 90 in the final year; for tax, the Statutory Residence Test counts midnights present in the UK against the automatic and ties thresholds. A principal who wishes to settle must be in the UK for roughly half of every year, which usually makes him UK tax resident under the ties test even if below 183 days. The two planning positions that work are therefore: be in the UK enough to settle and plan the tax accordingly, or be in the UK less than the tax thresholds and accept that settlement will not follow.

What does not work is the middle position: a principal present 150 days a year who expects to settle (he may, if absences stay under 180) and expects not to be tax resident (he will usually be, because of ties). WG's practice is to agree a travel policy with the family at the outset, calendar every absence, and review the position each 5 April and at each visa milestone. The four-year foreign income and gains relief for new arrivals makes the first four tax years the window in which the family's overseas structures should be reviewed and, where appropriate, reorganised.

Corporate structure and the family office

The UK subsidiary should be a real business with a defined function in the group: a trading company serving UK and European clients, a holding company with a resident board and real decision-making, or a research or design operation employing staff. It should hold its own sponsor licence, with an Authorising Officer resident in the UK and trained in the Sponsorship Management System, and it should keep the records Appendix D requires. It should pay the principals a salary consistent with their roles and the going rates, through UK PAYE, because that salary is both the immigration evidence and the tax base.

A family office in London adds value where it does something: manages the family's European investments, employs professionals, and makes decisions in the UK. A family office that is a mailbox adds immigration risk, since no genuine vacancy exists to sponsor, and tax risk, since its existence invites the question of where the group is really managed. The Innovator Founder and Global Talent routes are the right vehicles for family members whose activity is a new venture or a research career rather than group management.

Mobility capital: the London return for a family enterprise

In mobility-capital terms, a London base built on substance produces all three returns for the family. The knowledge return is a UK operating record, UK professional qualifications for the next generation, and familiarity with the legal system that underpins much of the group's contracting and financing. The cognitive return is the discipline of running a business under a regime that tests its own records, which family groups accustomed to relationship-based administration find demanding and then valuable. The opportunity return is settlement and citizenship for the family members who work, work rights for their spouses, and a UK entity that can later sponsor the next transferee, support a listing or an acquisition, and serve as the group's base for Ireland and Europe.

The costs are real: Immigration Skills Charge and surcharge for every sponsored person, independent-school fees now subject to VAT, UK tax residence with worldwide scope after four years, and, for those who naturalise, the possible loss of an Asian nationality that does not permit dual status. A family that understands those costs and builds something real in London will find the UK a durable base. A family that wants residence without presence should look elsewhere, because the UK no longer sells it.