Company incorporation in the United Kingdom

If you do business in the United Kingdom there may be a point that it makes sense to set up a local company. Then you need to know how to comply with local regulations and who can help you.

This article describes:

  • the most likely types of company to set up;
  • how you do this and who can help you;
  • a few important fiscal regulations.

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    Your legal entity in the United Kingdom

    The United Kingdom remains one of the most popular destinations for foreign businesses, thanks to its open economy, stable legal framework, and global connections.

    Most Common Business Forms for Foreign Companies

    The most widely used legal entity for foreign businesses in the UK is the Private Limited Company (Ltd).

    • Similar to a limited liability company (LLC) in other countries.
    • No minimum share capital requirement, making it highly accessible.
    • Shareholders’ liability is limited to their investment in the company.

    Another option is setting up a branch or subsidiary of a foreign company. A branch has fewer formalities but is not a separate legal entity, meaning the parent company is liable for its debts.

    Setting Up a Private Limited Company (Ltd)

    Incorporating a private limited company in the UK involves the following steps:

    1. Choosing a unique company name and checking its availability with Companies House.
    2. Preparing the company’s Articles of Association and Memorandum of Association.
    3. Registering the company with Companies House online or via post.
    4. Providing details of directors, shareholders, and the company’s registered office address.

    Foreign nationals can serve as directors of a UK company. There are no residency or nationality restrictions, though a UK-based registered office address is mandatory.

    Taxation and Withholding Taxes

    UK companies are subject to corporate tax on their profits. The corporate tax rate is currently set at 25% for most companies (2023 rates).

    Regarding dividends:

    • Dividends distributed to foreign shareholders are not subject to withholding tax in the UK.
    • The UK has an extensive double taxation treaty network, ensuring tax efficiency for foreign investors.

    Service Providers for Company Incorporation

    These service providers help with incorporation, compliance, and legal matters to ensure a seamless process for foreign entrepreneurs.

    Convince potential distributors

    A local consultant can find possible business partners, or you have identified them yourself. But how to convince them to market and sell your products or services?

    For this you need an export plan with a clear strategy and sufficient financial details.

    Get funding from banks & investors

    Entering a new market is an investment. Finding partners, contracts, translations and marketing costs money and you may need additional working capital.

    Only with a good plan with enough financial data you can convince banks and investors to fund you. We help you with the complete business case and documentation.