The United Kingdom of Great Britain and Northern Ireland is one of the most developed economies globally and a pioneer in the offshore industry. Through its former dominions and overseas territories, the UK has shaped the modern world of banking and non-banking financial services. With the spread of English common law, the concepts of the trust and the limited company gained worldwide recognition.
The UK is a constitutional monarchy. The British monarch is the head of state of the UK and shares the same status with 15 other countries.
London is a reputable and thriving financial centre, the largest in Europe and the second largest in the world. Company formation in the UK can benefit the business owner due to the jurisdiction’s sterling reputation and access to financial institutions in Europe.
The UK has a moderate corporate tax rate. The worldwide income for a company in the UK is taxable if it is a tax resident. Non-resident companies are taxable only on their UK-source income. A company is deemed to be a tax resident of the UK if it is incorporated in the UK and its place of management and control is also in the UK.
After setting up a limited company in the UK, it must be registered for corporate tax with Her Majesty’s Revenues and Customs (HMRC) within three months after the company was registered with the Companies House. Companies with a turnover of GBP 77,000 and above must register a business in the UK for VAT and receive a VAT tax number accordingly. Failure to register a company in the UK for tax purposes will result in heavy penalties being imposed on the company and its directors.
Compared to other jurisdictions in Europe, setting up a limited company in the UK is a good option for those willing to pay moderate corporate taxes and seeking to reduce the fees for the administration of complex offshore legal structures. The standard rate of corporate profit tax is 19%.
Additionally, UK company formation can provide access to double taxation treaties if the company is a tax resident in the UK. Business owners may therefore benefit from reduced withholding tax rates on passive income. This includes interest from business loans made to the company or royalties received from their businesses in the UK. The standard rate of withholding tax for interest and royalties paid by a UK limited company to non-residents is 20%. Typically, there is no withholding tax on dividends paid by the UK company in accordance with domestic tax laws.
The currency of the UK is the British pound sterling (GBP), which is one of the most traded currencies in the world.
There are no exchange controls in the UK.
|Currency||Pound sterling (GBP)|
|Capital gains tax||19%|
The UK is a common law country with a legal system comprising three different systems, namely, the law of England and Wales, Scotland and Northern Ireland. However, the formation of a company in the UK is regulated by the Companies Act, 2006. This creates a single regime for UK company registration in all parts of the UK. This also applies to the common Registrar of Companies, the Companies House.
Notwithstanding this unification, the company must have its registered office address in the part of the UK where the company was incorporated, e.g., a company incorporated in Scotland must have its registered office in Scotland and cannot have its address in England.
It is worth mentioning that English law is quite flexible and is the law of choice for the vast majority of business contracts. British courts are very often chosen for dispute resolution involving contracts and family matters in an international business environment. This is one more reason for opening a company in the UK.
It should be noted that in the UK, it is only possible to incorporate a company in the form of a limited company. It is not possible to register an LLC in the UK, as is the case in many offshore jurisdictions. The Limited Liability Company is regulated by US model legislation. The closest organisational form to the LLC in the UK is a Limited Liability Partnership. Feel free to contact Astra Trust to find out how to register a company in the UK with the corporate structure that best suits your needs.
Who can register a company in the UK? There are no legal requirements as to the nationality or residency of the owners and directors for company registration in the UK. The business owner can be of any nationality and residency. The directors do not need to reside in the UK for the purpose of setting up a company.
The Supreme Court of the United Kingdom is the final court of appeal in the UK.
The following laws provide for company formation in the UK:
UK companies are widely used for international trade and holding of assets. Setting up a limited company in the UK is one of the best solutions for doing business in Europe and promoting your product or service.
Registration of a company in the UK is advantageous due to the very flexible corporate legislation and the low administration and maintenance costs. Moreover, compared to other European jurisdictions, starting a business in the UK is not difficult and can be done entirely remotely. All this is combined with the moderate corporate tax rate and several options for tax optimisation.
Opening a company in the UK is a good idea when considering different options for quality business banking. Nowadays, many of our clients ask us how to register a company in the UK with a bank account. It is important to note that a UK company can have a business bank account in any country in the world. While opening a bank account in the UK can be somewhat challenging for non-UK residents, there are various offshore options.
How do you register a business in the UK with a local bank account? Firstly, the company must have a director with a service address in the UK. Next, the director must be prepared to visit the local bank in person and write a business plan to describe his business idea in detail. In some cases, it is even possible to obtain a start-up loan if the founder is a UK resident.
When setting up a company in the UK, the business benefits from the jurisdiction’s excellent reputation and is treated much more favourably by financial institutions. This is because the UK has the reputation of being the leading European financial centre and is one of the largest economies in the world. Still, it is important to find the best UK company formation agent to reduce fees and avoid potential fines. Astra Trust can help you to open a company in the UK with a local director.
There are several popular types of companies and entities that can be incorporated in the UK, including:
Companies incorporated in the UK are widely used for the following purposes:
Stage 1 Contact us for more information and quotes. We answer within three hours!
Stage 2 Fill in a form, provide us with the required documents and make a payment.
Stage 3 Receive the scanned incorporation documents within two days, and hard copies by courier in up to seven days.
To set up a limited company in the UK the following CDD documents are required:
The company formation services include the following services:
The company formation packages include the following documents:
According to the Companies Act, 2006, a private company’s name shall end with the following word or abbreviation:
The company name cannot suggest any connection to Her Majesty’s Government, any part of the Scottish administration, Her Majesty’s Government in Northern Ireland, or a connection to any public or local authority.
Astra Trust can check and register a company name in the UK within 1-2 working days.
A UK private company must at all times have at least one director who is a natural person. Corporate directors are available, however, one of the directors who is an individual of any residency and nationality must remain appointed to the office.
The company must have at least one shareholder, which can be either an individual or a corporation, of any nationality and residency.
A private company with registration in the UK may appoint a company secretary. A corporate secretary is optional for a private limited company and obligatory for a public one.
Information relating to the directors, officers and shareholders must be kept and updated at the Companies House in electronic format.
Astra Trust can advise on how to set up a business in the UK with maximum effectiveness for the client.
There are several types of companies under modern law that can be incorporated in the UK. They differ by organisational structure, corporate regulation requirements, taxation and capital types. In short, the following types of entities can be formed in the UK:
The Private Company Limited By Shares makes up the majority of companies incorporated in the UK. The share capital can be any number starting from GBP 1 per share, or any other currency. However, it must have a fixed nominal value, share capital with no par value is void.
Contact us to find out how to open a company in the UK with share capital that suits your particular needs.
The UK is considered a jurisdiction with a low level of privacy.
Information on registers of directors, shareholders and persons with significant control (PSC) is available for public inspection through the Companies House.
As of 2016, the UK introduced a publicly available register of beneficial owners of companies, namely the PSC register. Every company incorporated in the UK must maintain this register that is available publicly at the Companies House. The following persons are deemed to be persons with significant control and, as a consequence, are included in the register:
There are more complex rules for determining the PSCs of a company owned by a trust or private foundation, allowing a certain level of privacy over the company to be retained.
How to check company registration in the UK? Anyone can easily do this by accessing the public register of companies on the Companies House official website. It contains information on the address, share capital, officers, PSCs and accounts filed with the Registrar. For more details, please contact one of Astra Trust’s specialists.
There are no Economic Substance requirements in the UK.
Every limited company must establish an accounting period that, for newly incorporated companies, starts from the date of incorporation. A private company must prepare and file its annual accounts within nine months of the accounting reference date.
There are some exemptions for certain types of companies, such as micro-entities and small companies, and for certain partnerships.
There is a requirement to prepare audited accounts, which can be omitted if the company is eligible and applies for an exemption. So how to set up a company in the UK that is exempt from the auditing of accounts? This depends solely on the turnover and size of the assets held by the company.
The requirements for a company seeking exemption are as follows:
There is a requirement to submit corporate accounts in the form of a confirmation statement to the Companies House on an annual basis.
Business Activity Restrictions
Requirements to Directors
Requirements to Secretary
Requirements to Shareholders