UK Company Formation

A properly-structured UK International Business Company (IBC) is an ideal, tax-efficient corporate vehicle through which international business can be conducted. The following information will help you determine whether UK Company formation is the best option to meet your business objectives:

UK Company formation has an excellent reputation worldwide. UK Company formation is a legitimate solution in a reputable, highly regulated, international trading jurisdiction.

As a further encouragement to UK Company formation, over 100 countries have double taxation treaties including the US, Japan, China, Germany, France, Singapore and Canada. These treaties provide several advantages to support UK Company formation.

It is easy to open a corporate bank account to support UK Company formation.

The corporate tax rate charged for small companies with profits not exceeding GBP300,000 (US$450,000) is 21%. The main corporation tax rate in the UK is 28%. For companies that receive profits from ring fence activities (oil extraction activities in the UK/UK Continental Shelf) the rates of corporation tax are 19% and 30%, respectively.

A company with taxable profits up to GBP50,000 (US$70,000) is charged at 0% on the first GBP10,000 (US$14,000) and an effective marginal rate of 23.75% on the next GBP40,000 (US$56,000).

In the Heritage Foundation's 2010 Index of Economic Freedom, UK ranks highly as having the world's 11th-freest economy, and scores at 90% in terms of investment freedom and capital flows.

The United Kingdom is perceived as the 17th least corrupt country in the world, according to the 2009 Corruption Perceptions Index by Transparency International.

The United Kingdom is ranked 13th by the World Economic Forum in their Global Competitiveness Report 2009-2010, one of the world’s most comprehensive and respected assessment of countries’ competitiveness, offering invaluable insights into the policies, institutions, and factors driving productivity.

In its 2010 World Competitiveness Yearbook, the Switzerland-based IMD positively ranks the United Kingdom as the world’s 22nd most competitive economy. The ranking takes into account factors including economic performance, government efficiency, business efficiency and infrastructure.

In accordance with the UK Companies Act, 1985 and 1989 (as amended), every UK Company must have at least one director who is ordinarily resident in UK. Healy Consultants will be happy to act as the resident director to fulfil this statutory requirement.

Annual accounts must be prepared and submitted to the Inland Revenue and Companies House.

There is a public register of directors and shareholders.

Value Added Tax (VAT) is charged on the value of supplies of taxable goods and services made in the UK, including some exports to European Union (EU) countries. It is also chargeable on imports of goods from outside the EU. The main rates are 0% and 17.5%, but a few supplies are charged at 5%.

The UK is a member of the Organisation for Economic Cooperation and Development (OECD). OECD members strive to implement internationally transparent policies for the exchange of information related to income and taxation in an effort to stamp out tax evasion practices. More information can be found on the UK section of the OECD website.

Profits between the lower and upper profit thresholds, GBP300,000 to GBP1.5million (US$420,000-US$2.1million), are in effect charged at a marginal rate of tax of 32.75%.

Due to the positive image of UK Company formation, a UK Company is an ideal corporate vehicle to promote to customers, suppliers, investors, venture capitalists, etc.

Where a foreign trading company is owned by a UK company, the UK company can act as a low-tax or tax-free conduit for passing on profits to shareholders of the UK company. Dividends received from an EU resident underlying company will be free of withholding tax under the EU Parent/Subsidiary Directive.

UK banks offer letters of credit support to U.K. Companies engaging in international trading.