Can I Start a Business on a PSW Visa in the UK? Key Rules

If you are an international graduate in the UK, the Post-Study Work (PSW) visa, now officially known as the Graduate visa, can feel like a golden opportunity. It gives you time, flexibility, and the chance to gain real-world experience after completing your degree.

Naturally, many graduates ask the same question early on – Can I start a business on a PSW visa in the UK?

The short answer is yes. This guide explains everything you need to know about what the visa allows, how you can legally start a business, and what your options are if you want a long-term plan.

Key takeaways

• You can start a business on a Graduate visa

Graduate visa holders are allowed to be self-employed, freelance, register as sole traders, and start limited companies.

• Self-employment is permitted

You can work for yourself, invoice clients directly, and earn income in your own name. This includes freelancing, consulting, and contract work.

• Income isn’t capped or restricted

There are no immigration rules that limit how much income you can earn from your business, whether through salary, dividends, or self-employed earnings.

• You need to stay compliant with UK tax and record-keeping rules

Your limited company must pay Corporation Tax, operate PAYE if paying a salary, monitor VAT obligations, and maintain accurate records.

What is the PSW visa?

The Post-Study Work visa, now called the Graduate visa, allows international students to stay in the UK after finishing an eligible degree. It’s designed to give graduates time to work, build experience, and explore their next steps without needing immediate sponsorship.

With this visa, you can:

• Stay in the UK for two years after completing a bachelor’s or master’s degree
• Stay for three years if you’re a PhD graduate
• Work for almost any employer
• Work full-time or part-time
• Work without an employer sponsorship

Can I start a business on a PSW visa in the UK?

Yes, you can start a business while on a Graduate visa, and UK immigration rules give you a lot of freedom over how you work.

The Graduate visa allows holders to work in almost any capacity, including employment, self-employment, and business ownership. Unlike some other UK visas, there’s no restriction on freelancing, contracting, or running your own business.

More precisely, you’re permitted to:

• Register as a sole trader and work for yourself
• Freelance or consult for multiple clients
• Invoice clients in your own name
• Start and run a limited company
• Act as a director or shareholder of a UK company
• Combine paid employment with self-employment

The only thing you aren’t allowed to do on a Graduate visa is work as a professional sportsperson or sports coach. Aside from this, there aren’t any limitations regarding skill level, salary, hours, or business structure.

Your business options on a Graduate visa

There isn’t a single ‘correct’ structure. You can pick the option that best fits your business idea, income plans, and long-term goals.

The three most common options are setting up a limited company, working as a sole trader, and freelancing or contracting.

Option 1: Start a limited company

Setting up a limited company is a popular choice for graduates who want to build a scalable business, establish a professional brand, or prepare for long-term growth in the UK.

A limited company is a legal entity that exists separately from you as an individual. This separation gives the business its own legal and financial identity.

A limited company can:

• Sign contracts in its own name
• Open and operate a business bank account
• Pay Corporation Tax on its profits
• Employ staff, including directors

As the founder, you usually serve as both a director and a shareholder. As a director of a limited company on a Graduate visa, you’re allowed to:

• Register the company with Companies House
• Own up to 100% of the company’s shares
• Set strategy and long-term goals
• Develop products or services
• Handle marketing, sales, and operations
• Work full-time in your own business

There’s no requirement to be employed elsewhere, and no restriction on how active you can be in the company.

Option 2: Work as a sole trader or freelancer

If you want a simpler setup, you can also work for yourself as a sole trader. This option is common for freelancers, consultants, and service-based businesses.

As a sole trader, you operate the business in your own name and are personally responsible for the work you do.

This option allows you to:

• Register as self-employed with HMRC
• Invoice clients directly
• Keep profits after tax
• Start trading quickly with minimal setup

Sole trader structures are often easier to manage at the beginning, but they offer less separation between personal and business finances than a limited company.

Option 3: Combine employment with a business

The Graduate visa also allows you to mix different types of work.

You can:

• Work in a PAYE role and run a business at the same time
• Be employed part-time while freelancing or running a company
• Transition gradually from employment into full-time business ownership

This flexibility makes it easier to manage income, reduce risk, and test a business idea while maintaining financial stability.

Registering your business in the UK

The steps to register your business depend on the structure you choose, but the process is generally straightforward. Everything can be done digitally, and most companies can be set up within a day.

If you’re registering as a sole trader

To become a sole trader, you’ll need to:

• Register for self-employment with HMRC
• Choose a business name (this can be your own name or a trading name)
• Keep records of your income and expenses
• Submit a Self Assessment tax return each year

Once registered, you’ll pay Income Tax and National Insurance on your profits rather than Corporation Tax.

If you’re starting a limited company

To register a limited company in the UK, you’ll usually need to:

• Choose a company name
  Your name should be unique and not too similar to an existing company. Use ANNA’s free name checker to see if the name you want is available.
• Register with Companies House
  Registering with Companies House officially confirms that you have a company. You’ll provide details such as the company name, director information, shareholder details, and registered office address.
• Appoint at least one director
  Every limited company must have at least one director. As a Graduate visa holder, you can be both the director and the sole shareholder.
• Register for Corporation Tax
  Once your company is active, you’re required to tell HMRC that it exists, even if you aren’t earning anything yet.

After registration, you’ll also need a business bank account and a reliable way to track income, expenses, and tax deadlines.

Tip: ANNA combines a business account with built-in bookkeeping and automated tax reminders, making it much easier to stay organised and compliant, particularly if you’re new to UK business rules.

How earning works on a Graduate visa

If you run a limited company, there are two main ways to take money out of the business.

Salary and Dividends

As a director, you can pay yourself a salary through PAYE. This involves registering as an employer, running payroll, and paying Income Tax and National Insurance where applicable.

There are no immigration limits on how much salary you can pay yourself on a Graduate visa. The amount should simply make sense for your business and its finances.

If you own shares, you can also receive dividends. Dividends are paid from company profits and are treated as investment income rather than wages.

Graduate visa holders are allowed to receive dividends without restriction, provided the company is operating lawfully and meeting its tax obligations.

Best practice for Graduate visa holders

Many graduates use the Graduate visa period to experiment, build traction, and learn how running a business works in practice.

Common approaches include:

• Starting small and scaling gradually
• Reinvesting profits into growth
• Using the Graduate period to prepare for longer-term visas, such as Skilled Worker or Innovator Founder

Reinvesting early profits can support product development, marketing, and cash flow, all of which are important if you plan to grow the business or apply for a different visa later.

Tax responsibilities you should know about

Running a limited company comes with ongoing tax and reporting responsibilities, even if your business is small or still in its early stages.

Understanding your obligations early can save you stress, penalties, and complications later on:

• Corporation Tax: Your company must pay Corporation Tax on its profits. You will also need to file a Company Tax Return every year, even if the company makes a loss or has very little activity. Corporation Tax deadlines are strict, and missing them can lead to fines and interest charges.
• PAYE and National Insurance: If you pay yourself a salary, your company must use PAYE. This includes running payroll, reporting salary payments to HMRC, and paying Income Tax and National Insurance contributions where required.
• VAT: You must register for VAT if your company’s taxable turnover exceeds the annual VAT registration threshold (£90,000). VAT isn’t required for most early-stage businesses, but it’s important to monitor your turnover so you know when registration becomes necessary.
• Record-keeping and compliance: Keeping accurate records is essential. This includes invoices, receipts, payroll records, and bank statements. Late filings, missed payments, or poor record-keeping can lead to penalties.

Want to start your new business? ANNA can help

ANNA is built to support new business owners in the UK, including international graduates who want a simple, compliant way to manage their finances from day one.

ANNA can help you:

• Register your company quickly – Reduce stress and focus on what matters most
• Manage VAT, PAYE, and tax filing easily – Keep bookkeeping simple and under control
• Open a UK business account effortlessly – Handle all your finances in one place
• Stay compliant with Making Tax Digital (MTD) – Submit VAT and Self Assessment records digitally and meet HMRC requirements using ANNA Money’s MTD-ready tools
• Automate invoices, receipts, and expenses – View and track everything from your phone
• Access support anytime – Get help from ANNA’s experts 24/7

With ANNA taking care of the admin, you can focus on growing your business, bringing your ideas to life, and making the most of your Graduate visa.