Registering a company in the UK can be an attractive option for non-residents looking to establish a presence and do business there. The UK has a stable political climate, developed financial systems, access to European markets, and a respected legal system that makes it an appealing place to set up a company. However, there are certain requirements and implications that a non-resident must consider before registering a UK company. Kirill Yurovskiy spoke about them in detail in this material.
Requirements for Registering a UK Company
To register a company in the UK, a non-resident must appoint a UK resident director. This appointed director will be legally responsible for compliance with UK company laws. The non-resident owner can apply for a directorship themselves if they have a valid UK visa that allows sufficient stay in the country. Alternatively, they can appoint a local professional director.
In addition, the registered company address must be a valid physical location in the UK – a PO box number is not sufficient. Many company formation agents offer virtual office services with mail forwarding where this registered address can be established without requiring ownership or rental of actual premises.
Tax Implications
One major consideration is that some UK taxes will apply to the company’s income and assets even if the non-resident owner resides abroad. This includes corporation tax on worldwide profits as well as capital gains tax. Appropriate UK tax returns will need to be completed. Professional UK tax advice is essential to navigate requirements.
However, the non-resident owner may have certain tax advantages compared to residing in the UK. For example, income extracted as dividends may be exempt from UK income tax and could also avoid income tax in their country of residence due to being foreign sourced. Double tax treaties often apply between the UK and other jurisdictions.
Appointing a UK Resident Director
As registering a UK company requires appointing at least one UK resident director, a non-resident must consider if they can realistically fulfill this role or if appointing a third party is preferable. Becoming a director legally responsible for the company is a serious commitment requiring oversight of company operations as well as understanding compliance.
Using a local professional director can remove this administrative burden from the non-resident owner. Reputable company formation agents often provide nominee director services for a fee in addition to the company registration. But he non-resident must trust in relinquishing a degree of direct control.
Registering the Company Address
To register a company in the UK, a valid physical address is required – this cannot simply be a PO Box. Fortunately, many company formation services offer virtual office packages bundled into the registration process where a registered company address can be provided without needing to rent actual office premises.
The virtual office usually includes use of the agent’s address as the official company registered address for legal compliance, along with mail handling and forwarding services. This can provide the necessary local address without a foreign company needing to lease or purchase UK property until ready to establish physical operations.
Additional Administrative Requirements
In addition to appointing resident directors and a registered address, some other key compliance aspects for non-residents registering a UK company include:
– Preparing a Memorandum of Association and Articles of Association documenting internal rules for company governance. Templates are often provided by formation agents.
– Keeping statutory books recording details of shares, directors, meetings, resolutions etc.
– Filing confirmation statements (previously annual returns) confirming company details to Companies House along with company accounts.
– Submitting notices for people of significant control over the company, changes in directors/officers, share allotments and other specified events within strict time frames.
Using a reputable registered agent can assist with most of these filings and compliance obligations on an ongoing basis. But company directors also need general awareness.
Opening a Business Bank Account
To operate functionally, the registered UK company will need to open a business bank account with a UK bank once registered. This requires providing standard details like proof of company registration, ID documents for directors and evidence of the company registered address.
As a non-resident director approving account opening, extra due diligence checks may apply including face-to-face interviews at the bank branch or video calls to verify identities remotely along with thorough corroboration that the business has substance. A local co-director can simplify satisfying these requirements.
Reporting Obligations
Registering a UK company enters the entity into a formal system of record keeping and reporting obligations which directors must fulfil, with penalties for non-compliance. Key reporting documentation includes:
– Annual accounts following UK accounting standards – while small companies can prepare abbreviated accounts, larger entities face more stringent auditing and disclosure standards. Accounts must be filed at Companies House.
– Company Tax Return for reporting taxable profits and gains to HMRC coupled with relevant tax payments. Foreign sourced profits may still incur UK corporation tax.
– VAT returns to report UK sales activity and pay VAT liabilities if company turnover exceeds the VAT registration threshold, currently £85,000. Specific VAT schemes like cash accounting may assist overseas companies.
Appointing local UK accountants and tax agents is advisable for non-resident owned companies, both for compliance and minimizing tax liabilities.
Conclusion
In summary, while non-UK residents face some restrictions like appointing resident directors, it is certainly feasible to register a fully operational UK company from abroad. Formation agents considerably simplify the registration process itself. The main commitment comes from ongoing UK tax and financial reporting obligations which requires non-resident directors planning an active business presence to implement UK accounting, taxation and compliance support. If managed appropriately, registering a UK company can provide non-residents with substantial commercial opportunities coupled with a trusted base for expanding into European markets.
