The UK is one of the most attractive destinations for entrepreneurs and investors from all over the world. The country offers a stable and business-friendly environment, a strong legal system, a skilled workforce, and a large and diverse market. Moreover, the UK has a simple and fast process for registering a limited company (LTD), which is the most common type of business entity in the country.
But what are the benefits for non-UK residents of registering an LTD company in the UK? In this article, we will explore some of the main advantages of setting up a UK-based company as a foreigner, and how to go about it.
Advantages of registering an LTD company in the UK as a non-UK resident
Here are some of the key benefits of forming an LTD company in the UK as a non-UK resident:
- Global reputation: The UK is widely regarded as one of the best places to do business in the world, ranking among the top 10 countries in the World Bank's Ease of Doing Business index¹. Having a UK-based company can enhance your credibility and reputation among customers, suppliers, partners, and investors globally.
- Tax efficiency: The UK has one of the lowest corporate tax rates in Europe, currently at 19%, and it is set to decrease to 17% by 2023². Additionally, the UK has a wide network of double taxation treaties with over 130 countries, which can reduce or eliminate withholding taxes on dividends, interest, and royalties paid to or from your UK company³. Furthermore, the UK does not impose any withholding tax on dividends paid by an LTD company to its shareholders, regardless of their residence⁴.
- Flexible structure: An LTD company is a separate legal entity from its owners (shareholders) and managers (directors), which means that it can own assets, enter into contracts, sue and be sued, and have perpetual existence. An LTD company can also have different classes of shares with different rights and restrictions, which can allow you to tailor your ownership structure to your needs and preferences. Moreover, an LTD company can have as many or as few shareholders and directors as you wish, and they can be individuals or corporate entities, residents or non-residents.
- Limited liability: One of the main advantages of an LTD company is that it limits the liability of its shareholders to the amount they have invested or agreed to invest in the company. This means that if the company becomes insolvent or faces legal claims, the personal assets of the shareholders are protected from creditors and claimants.
- Easy incorporation: We can form your UK Limited company for you. You will need to provide some basic information about your company, such as its name, registered office address, shareholders, directors, share capital, and articles of association. The incorporation can be completed within 24 hours if there are no issues or delays.
How to register an LTD company in the UK as a non-UK resident
As a non-UK resident, you can register an LTD company in the UK by following these steps:
- Choose a unique and suitable name for your company: Your company name must not be identical or too similar to any existing company name or trademark in the UK. You can check the availability of your desired name on the Companies House website. You should also avoid using any sensitive or offensive words or expressions that may require approval or cause rejection.
- Decide on your registered office address: Your registered office address is the official address of your company where you will receive all official correspondence from Companies House and HM Revenue & Customs (HMRC), the tax authority in the UK. Your registered office address must be located in England, Wales, Scotland, or Northern Ireland, depending on where you want to incorporate your company. You cannot use a PO Box or a virtual office as your registered office address. You can use your own address if you have one in the UK, or we can provide you with a registered office address in London.
- Appoint at least one shareholder and one director: A shareholder is someone who owns shares in your company and has certain rights and obligations depending on their share class. A director is someone who manages your company and has certain duties and responsibilities under the law. You can have as many or as few shareholders and directors as you want, and they can be individuals or corporate entities, residents or non-residents. However, at least one director must be a natural person (not a corporate entity) who is at least 16 years old. You can also be the sole shareholder and director of your company if you wish. Or we can provide a nominee director and nominee shareholder.
- Allocate your share capital and issue shares: Your share capital is the amount of money that your shareholders have invested or agreed to invest in your company. You can have any amount of share capital, but you must have at least one share issued to at least one shareholder. You can also have different classes of shares with different rights and restrictions, such as voting rights, dividend rights, and redemption rights. You should specify the details of your share capital and share classes in your articles of association.
- Prepare your articles of association: Your articles of association are the rules that govern how your company is run and how decisions are made. You can use the model articles provided by Companies House, which are suitable for most companies, or you can draft your own customised articles to suit your specific needs and preferences. You should also include a memorandum of association, which is a document that confirms the intention of your shareholders to form a company and become its members.
- Register for corporation tax with HMRC: After your company has been formed, you will also need to register for corporation tax with HMRC, or we can do this for you.
Registering a LTD company in the UK as a non-UK resident can offer many benefits for entrepreneurs and investors who want to access the UK market and enjoy its favourable business environment. We make forming an LTD company in the UK easy and can help you with the legal and tax aspects of setting up and running your UK-based company.
Published: 10/4/2023 5:11:15 PM