UK company registration

DOING BUSINESS IN UK IN 2018

Since 2003, Healy Consultants PLC has assisted Clients with business registration in the United Kingdom. Our services include i) UK company registration ii) corporate bank account opening iii) employee recruitment iv) employee visa strategies and v) office space rental solutions.

An English limited company is an ideal, flexible corporate vehicle through which European and international business can be conducted in the UK.

Summary	Tax resident LLC	Fast solution	Tax resident PLC	Company Limited by Guarantee	LLP	Representative office	Branch office	Trust
Best use of company?	All products and services	Invoice customer now	LSE listing	Non for profit business	Professional services	Marketing & research	Consolidate losses	Tax planning
How soon can you invoice Clients / sign sales contracts?	2 weeks	1 week	2 weeks	2 weeks	2 weeks	2 weeks	2 weeks	3 weeks
How soon to have active bank account numbers?	6 weeks	1 week	6 weeks	6 weeks	6 weeks	6 weeks	6 weeks	8 weeks
How soon can you hire staff?	2 weeks	1 week	2 weeks	2 weeks	2 weeks	2 weeks	2 weeks	3 weeks
How soon can you sign a lease agreement?	2 weeks	1 week	2 weeks	2 weeks	2 weeks	2 weeks	2 weeks	3 weeks
Travel required for bank account opening?	No	No	No	No	No	No	No	No
Corporate tax rate on annual net profits?	19%	19%	19%	19%	0%	0%	19%	0%
Legally tax exempt if properly structured?	Yes	Yes	No	No	Yes	Yes	Yes	Yes
Government grants available?	Yes	Yes	Yes	Yes	No	No	Yes	No
UK holding company income legally tax exempt?	Yes	Yes	Yes	Yes	No	No	No	Yes
Resident director/partner/manager required?	No	No	No	No	No	No	No	Yes
standard VAT?	20%	20%	20%	20%	20%	0%	20%	20%
Can bid for Government contracts?	Yes	Yes	Yes	Yes	Yes	No	Yes	No
Corporate bank account location?	HSBC london	RBS Group	Standard Chartered Bank	Barclays PLC	Santander Bank	Barclays PLC	HSBC london	Standard Chartered Bank
Can secure trade finance?	Yes	Yes	Yes	Yes	Yes	No	Yes	No
Limited liability entity?	Yes	Yes	Yes	Yes	Yes	No	No	Yes
Average total engagement costs?	£5,790	£13,540	£8,890	£6,040	£5,990	£6,970	£6,720	£13,850
Average total engagement period?	10 weeks	10 weeks	10 weeks	10 weeks	10 weeks	10 weeks	10 weeks	12 weeks

See full table

Accounting and tax considerations	Tax resident LLC	Fast solution	Tax resident PLC	Company Limited by Guarantee	LLP	Representative office	Branch office	Trust
Must file an annual tax return?	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Access to double taxation treaties?	Yes	Yes	Yes	Yes	No	Yes	Yes	No
This entity enjoys Government incentives?	Yes	Yes	Yes	Yes	No	No	Yes	No
Company registration	Tax resident LLC	Fast solution	Tax resident PLC	Company Limited by Guarantee	LLP	Representative office	Branch office	Trust
Minimum number of shareholders/partners?	1	1	2	1	2	Parent company	Parent company	1
Maximum shareholding for foreigners?	None	None	None	None	None	None	None	None
Minimum number of directors/managers?	1	1	2	1	1	1	1	None
Minimum statutory paid up share capital? (£)	£1	£1	£50,000	None	£2	£0	£0	£0
Shelf companies available?	Yes	Yes	Yes	No	No	No	No	No
Time to incorporate a new entity?	1 week	1 week	1 week	1 week	1 week	1 week	1 week	2 weeks
Can easily convert to a PLC?	Yes	Yes	Yes	No	No	No	No	No
Public register of shareholders and directors?	Yes	Yes	Yes	Yes	Yes	Yes	Yes	No
Can have preference shareholders?	Yes	Yes	Yes	Yes	Yes	No	No	Yes
Business Considerations	Tax resident LLC	Fast solution	Tax resident PLC	Company Limited by Guarantee	LLP	Representative office	Branch office	Trust
Good entity for trademark registration?	Yes	Yes	Yes	Yes	Yes	No	Yes	No
Can secure an import and export license?	Yes	Yes	Yes	Yes	Yes	No	Yes	No

Other useful information
What will be included in my customer sales invoice?	(click link)
This country has signed free trade agreements?	Yes
This country is a member of WIPO/TRIPS?	Yes
This country is a member of the ICSID?	Yes
Average customs duties suffered?	0%
Government foreign investment approval required?	No
Average monthly office rental? (£ per sq m)	£40
Minimum statutory monthly salary?	£1,382
Average monthly £ salary for local skilled employees?	£2320
UK £ deposit interest rate? (1 year average)	1%
Overseas remittance currency controls?	No
Maximum number of staff allowed?	No limit
Banking considerations
Multi-currency bank accounts available?	Yes
Corporate visa debit cards available?	Yes
Quality of e-banking platform?	Excellent
Crowd funding available in this country?	Yes
Can be wholly foreign owned?	Yes
Government approval required for foreign owners?	No
Temporary physical office solutions available?	Yes
You need a local resident as bank signatory?	No
VAT payable on sales to local customers?	20%
Withholding tax on payments to foreign shareholders?	20%, but lower tax rates can apply due to tax treaties
Group HQ tax incentives?	Yes
Must file annual financial statements?	Yes
Must appoint an auditor?	small company exemption available
Withholding tax on payments to parent company?	20%, but lower tax rates can apply due to tax treaties
Quarterly VAT reporting to the Government?	Yes
Dividends received are legally tax exempt?	Yes
must sign an office lease agreement?	No
Shareholders and directors documents to be attested?	Yes
Foreign director needs a tax number?	No
Foreign director needs a residence visa?	No
Shareholders & directors documents to be English translated?	Yes
The entity will likely be regulated by?	Companies House
Sponsorship by a local citizen required?	No
Expatriate to local staff ratio?	None
Company can rent local office space?	Yes
Can secure residence visa for business owner?	Yes

Compare similar North European countries

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Benefits and problems
Benefits of UK company registration
1. UK companies are simple to set up since:
  - Only i) one director and ii) one shareholder are required to form a private company;
  - Foreign entrepreneurs wishing to register a UK company can easily handle the administration remotely, as Companies House allows many filings to be made online;
2. UK entities have an excellent reputation worldwide, with English law forming the basis for company law in many countries worldwide. Incorporating in the UK ensures legal flexibility with clear governance rules in one of the world’s largest and most reputable trading economies;
3. Company registration in the UK enables our Client to benefit from an attractive tax regime because:
  - The UK corporate tax rate is 19%, which is one of the lowest rates in Europe after Ireland and Bulgaria;
  - Dividends paid to UK companies are generally tax exempt, and the UK levies no withholding tax on dividends paid to foreign residents;
  - Tax credits are available for companies involved in R&D. These companies pay a lower rate of Corporation Tax. Companies may get a 100% deduction of Corporation Tax on work related to R&D. Large companies can get a further deduction from their taxable income which is 30% of their current spending on qualifying R&D;
  - Capital gains for companies selling subsidiaries (with at least a 10% holding) are tax exempt if the subsidiary was owned for at least 1 year.
4. A foreign company can open a London corporate bank account and not be subject to UK tax if i) it has no sales in the UK ii) no office in the UK and iii) its beneficial owners reside outside UK. However, using this structure will mean that the company is tax resident elsewhere, where additional liabilities will arise. This structure also removes access to the UK’s network of tax treaties.
5. The global rankings of UK in the various indexes are quite impressive for doing business:
  - In the Heritage Foundation’s 2017 Index of Economic Freedom, the UK ranks highly as having the world’s 12th freest economy, and scores 90% for investment freedom and capital flows;
  - The United Kingdom is perceived as the 10th least corrupt country in the world, according to the 2016 Corruption Perceptions Index by Transparency International;
  - The United Kingdom is ranked 8th by the World Economic Forum in their Global Competitiveness Report 2017–2018, one of the world’s most comprehensive and well-respected assessments of countries’ competitiveness. The report offers invaluable insights into the policies, institutions, and factors driving productivity that benefit entrepreneurs interested in UK company registration.
6. The UK has a workforce of over 30 million people which is the 2^nd largest in the EU. It has a workforce with strong skills, a flexible labor market and regulations designed to protect employees.
Problems of UK company registration
1. As part of the Government’s drive to encourage transparency, a ban on the use of corporate directors is due to come into force as part of The Small Business, Enterprise and Employment Act 2015. The government has not yet defined the scope of such exceptions but this action is expected soon;
2. UK incorporated companies trading on the AIM market of London Stock Exchange and other prescribed markets are now required to make reasonable investigations as to their beneficial ownership and will need to produce, and make public, beneficial ownership registers. New deadlines for filing relevant information regarding PSCs are more onerous;
3. Annual accounts must be prepared and submitted to the Inland Revenue and Companies House. The accounts submitted to Companies House are available for public inspection. However, dormant companies and “small companies” as defined in the Companies Act only need to submit abbreviated accounts. This means that only the company’s balance sheet and notes are made public, rather than the company’s income or cash flow statements;
4. In a historic referendum on June 23^rd, 2016, Britain voted to leave the European Union. After which, the pound fell to its lowest since 1985, immediately after the result was declared. The UK is considered one of the best countries to start a business, but that could change due to the unknown effects Brexit could bring:
  - This could take a major hit on export businesses in the UK, as their costs will hike up with the increased tariffs. Even if the businesses choose to maintain a competitive edge by decreasing prices, it would mean lower profits for them;
  - The European Free Trade Association (EFTA) was formed in 1960, which the UK was a founding member. If the EU decides to change policies after Brexit, it could mean that the UK will lose its access to the single market.
5. 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 20%, but a few supplies are charged at 5%.

Best uses for a UK company
1. Companies based in the UK can reach more than 500 million consumers across Europe, offering great potential for foreign entrepreneurs and investors with business support, tax incentives, and visa flexibility;
2. Companies and limited liability partnerships registered in the UK can also be used as asset management Firms for funds registered in British Overseas Territories including i) Jersey ii) Guernsey iii) Isle of Man and iv) the British Virgin Islands

Frequently asked questions

Why register a company in the UK?
The UK’s internationally-renowned legal system, low 20% tax rate and highly-skilled labour force all make the UK a fantastic investment destination. The UK’s EU membership also increases its attractiveness for foreign direct investment and Healy Consultants supports keeping the country within the European Union.
What is the name of the UK companies registry?
Companies House manages company registration in each of the UK’s three company law jurisdictions: i) England & Wales ii) Scotland and iii) Northern Ireland. All UK companies are incorporated through this method.
I want to know how to start a company in the UK. How do I register my business?
To incorporate an English private company limited by shares, the shareholders must file information on i) the company directors, at least one of whom must be an individual (additional directors may be companies) ii) the shareholders iii) the memorandum and articles of association iv) the company’s registered address and v) the share capital and number of shares to be issued. The shareholders sign the company’s memorandum and articles of association and submit the package to Companies House. The entire process of establishing a business in the UK can be completed within a week.
Do you have a guide to UK company registration?
Yes – our “Incorporation Steps” page has a useful guide on setting up a company in the UK.
Does a private company require a company secretary?
English companies may appoint a company secretary, although there is no requirement to do so, nor are there any prescribed qualifications. Public limited companies do need a company secretary, whose qualification requirements are set out by the Companies Act.
Can foreigners register a company in the UK?
Yes, although companies with any foreign-resident directors or shareholders must used a paper-based application. Such applications take more time to complete than the online applications and attract slightly higher government fees. Even so, setting up an English company remains a quick and inexpensive option for registering a UK company.

Useful links for UK

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UK company registration

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Benefits and problems

Benefits of UK company registration

Problems of UK company registration