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 table of UK company registration
|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|
|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?||£7,790||£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|
|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|
|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|
UK business setup summary
Press the link headings below to read detailed, relevant, up to date information.
Benefits and problems
Benefits of UK company registration
- 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;
- 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;
- Company registration in the UK enables our Client to benefit from an attractive tax regime because:
- The UK corporate tax rate is 20%, 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.
- 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.
- The global rankings of UK in the various indexes are quite impressive for doing business:
- In the Heritage Foundation’s 2018 Index of Economic Freedom, the UK ranks highly as having the world’s 8th freest economy, and scores 90% for investment freedom and capital flows;
- The United Kingdom is perceived as the 8th least corrupt country in the world, according to the 2018 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.
- The UK has a workforce of over 30 million people which is the 2nd largest in the EU. It has a workforce with strong skills, a flexible labor market and regulations designed to protect employees;
- The United Kingdom has a robust infrastructure which is an essential aid for new businesses to grow.
- There have been massive improvements in the transportation system of the UK through the government’s £120 billion investment program;
- The UK is highly reputable in terms of its world-class infrastructural facilities since it has the: i) 2nd largest port industry in the Europe, ii) largest air transport network in the Europe, and iii) enhanced railway systems in the entire EU;
- UK’s pro-business friendly nature towards entrepreneurs and graduates through its programs like the Global entrepreneur program and the Sirius program, along with its robust infrastructural facilities makes it an ideal place for business incorporation.
Problems of UK company registration
- 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;
- UK incorporated companies trading on the AIM market of London Stock Exchange and other prescribed markets are now required to make reasonable investigations about their beneficial ownership and need to produce, and make public, beneficial ownership registers. New deadlines for filing relevant information regarding PSCs are more onerous;
- 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;
- In a historic referendum on June 23rd, 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.
- 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%;
- The UK is still recovering from its financial crisis. The economy holds 68th rank for its competitiveness in terms of its macroeconomic environment on the 2017-18 Global Competitiveness Index. This can be one of the major hindrances for the economy of UK which can discourage new entrepreneurs to invest in the UK;
- No UK banks onboard cryptocurrency-related business due to increased compliance costs and direct competition with the traditional financial system.
- UK companies are simple to set up since:
Best uses for a UK company
- 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;
- 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
Government and public authority websites:
- UK company name search
- UK Stock Exchange
- UK hotels
- UK Newspaper
- Latest UK News
- Central Bank of UK
- UK Tax Authority
- Doing Business 2015 United Kingdom Economy Profile 2015
- UHY: Doing Business in the UK
- Deloitte: Taxation and Investment in United Kingdom
- United Kingdom – Investment and Taxation 2015
- Overseas Companies Registered in The Uk
- Companies Act 2006
- HM Revenue & Customs
- Doing Business in The United Kingdom
- Business Banking Practice
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