Benefits of UK Company Registration

UK company registration is simple

  • A single director and shareholder can form a private company
  • A UK company can be incorporated online in just one week.
  • 100% foreign ownership is allowed.
  • A UK company is inexpensive to set up.

A UK company has an excellent global reputation, looking good to your customers, suppliers, governments and banks. That is because:

  • English common law is the basis of company law in many countries, so the UK company structure is well understood.
  • The UK is a stable, well-regulated jurisdiction. A UK company is, therefore, seen as a stable, well-regulated vehicle through which to conduct local and international trade.

The UK is an attractive tax regime for multinational clients

  • A foreign company can open a UK corporate bank account and not be subject to UK tax if:
  • it has no sales in the UK
  • it has no office in the UK
  • its beneficial owners reside outside the UK
However, using this structure will mean that the company will be tax resident elsewhere, where additional liabilities might arise. This structure also removes access to the UK’s network of tax treaties.
  • Dividends paid to UK companies are generally tax-exempt. The UK also levies no withholding tax on dividends paid to foreign residents.
  • Tax credits are available for companies involved in research and development (R&D). Large companies can secure deductions 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 has been owned for at least one year.
  • A UK company can be legally tax exempt from UK tax provided the UK company remains UK tax resident and operates through a branch/permanent establishment in a jurisdiction with which the UK has a tax treaty.

The UK is a good place in which and from which to do business

  • In the Heritage Foundation's 2020 Index of Economic Freedom, the UK has the world's 7th freest economy. It scores particularly well (at 80%) for investment freedom and capital flows.
  • The country is perceived as having low levels of corruption. Consequently, it is a low risk environment for international investors, who can expect to receive:
  • good legal protection when investing
  • transparent contract bidding protocols
  • fair treatment in courts if disputes arise
  • The World Economic Forum ranks the UK as the world's 9th most competitive economy.
  • The UK workforce of 30 million is highly educated, qualified and offers a wide pool of talent for international investors.

The UK is an attractive location from which to trade regionally and internationally

  • The country's large ports (including London, Felixstowe, Southampton, Bristol and Liverpool) connect the UK with the world. Cargo transit times between the UK to the east coast of the USA are 10 days, while to the rest of Europe just one day's sailing time.
  • The UK has more than 500 million consumers on its doorstep in the European Union (EU). However, accessing EU markets became more challenging in 2020 when the UK exited the bloc.
  • Heathrow airport is one of the world's biggest and most connected transport hubs. Major European capitals are an hour away. New York is just six hours' flight. Dubai seven hours.

Government Support & Financial Services

  • The UK government offers a range of business incentives including tax relief and venture capital programs.
  • In 2021 the UK government set up a US$500 billion fund to encourage investments in technology, renewable energy and life sciences.
  • The UK has one of the world’s most stable, sophisticated banking systems. London is one of the world’s top financial centres.
  • The UK insurance market is one of the world’s biggest, attracting more than US$100 billion annually in premiums.
  • London has one of the world’s most important stock markets – an excellent option to raise funds for ambitious businesses.

Problems with UK Company Registration

Brexit Impact

  • On 30 January 2020, the UK formally left the European Union. This is likely to have a long-term negative impact on UK companies because:
    • It is more difficult for UK companies to access the large EU market because of tariffs and customs delays
    • It is more difficult for UK companies to hire European talent, because of the need to apply for work visas for non-UK staff
    • The UK must negotiate new free trade agreements with partners around the world, which takes time

Regulatory and Tax Considerations

  • Annual accounts must be prepared and submitted to the Inland Revenue and Companies House. Accounts submitted to Companies House are available for public inspection.
  • The UK government plans to introduce legislation banning the use of corporate directors.
  • UK banks apply strict onboarding processes. A UK company will likely only be onboarded if the majority of directors and shareholders are UK resident.
  • Value added tax (VAT) is charged on the value of supplies of taxable goods and services made in the UK. The main rates are 0% and 20%, but a few supplies are charged at 5%.

High Operating Costs

  • The UK is an expensive country from which to run a business:
    • London has by far Europe’s most expensive office rents
    • Salaries are higher than the European average
    • The UK minimum wage is higher than most European countries
    • The cost of living is high in London compared to other large global capitals

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 and tax incentives.
  • 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:
    • Jersey
    • Guernsey
    • Isle of Man
    • British Virgin Islands