Company formation in the UK

UK company incorporation is governed by the Companies Act 2006 (“the Act”), under which the following types of companies can be set up:

UK company incorporation packages

  • Private Company Limited By Shares
  • Private Company Limited By Guarantee
  • Private Unlimited Company
  • Public Limited Company (PLC)

and some other specific types of non-standard companies.

The most common structure used for international trading is a private company limited by shares. Such company may engage in virtually any legal business, but must obtain licenses for some regulated activities such as banking, insurance, money lending, or investment advice.

Statutory requirements

A private company must have a registered office in the UK – a physical location where notices, letters and reminders can be delivered to the company. A private company has no statutory obligation to appoint a secretary, but may choose to do it.

The Companies Act 2006 requires a private company to have at least one director. However, a company’s articles of association could impose a higher minimum requirement. At least one director must be an individual. A private company must have at least one shareholder, whether a natural person or a body corporate, resident or non-resident.

The minimum share capital for a UK private company is 1 share and there is no maximum share capital limit.

All the above information is public. It must be filed with Companies House and updated within specific time limits whenever any change occurs.

How to open an Ltd company in the UK?

You can select the most appropriate package below and create a new limited company using our services or buy one of our shelf companies.

UK limited liability partnership incorporation packages (LLP)

Services GOLD
1099 USD
PLATINUM
1300 USD
Company registration including government fees ✔︎ ✔︎
Registered address for 1 year ✔︎ ✔︎
Apostille ✔︎ ✔︎
Company seal ✔︎ ✔︎
Share certificate ✔︎ ✔︎
Courier services ✔︎ ✔︎
Nominee partners for 1 year   ✔︎
Total cost 1099 USD 1300 USD
Annual renewal fee 999 USD 1499 USD

UK company incorporation packages (LTD)

Services GOLD
999 USD
PLATINUM
1499 USD
Company registration including government fees ✔︎ ✔︎
Registered address for 1 year ✔︎ ✔︎
Apostille ✔︎ ✔︎
Company seal ✔︎ ✔︎
Share certificate ✔︎ ✔︎
Courier services ✔︎ ✔︎
Provision of professional shareholder for 1 year   ✔︎
Provision of professional director for 1 year   ✔︎
Total cost 1099 USD 1499 USD
Annual renewal fee 999 USD 1499 USD

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UK shelf companies

A “shelf company” is a company that has been registered by a formation agent in its own name in order to be transferred to a customer. That is a very convenient option that helps to save precious time without having to wait for your application to be processed by Companies House, which is very useful if you have a deadline or if you have no specific requirements concerning the name or founding documents of the company.
We have a number of ready made companies registered in the UK and other jurisdictions that you may purchase and start your business right away. To buy a UK shelf company, please contact us to get a list of companies in stock.
If you wish to purchase a shelf company or create a new company, then we will have to verify your identity and residential address to fulfil our anti-money laundering responsibilities. Shelf companies are created with our own secretary and directors. After the purchase, we will transfer the company’s shares from the existing Nominee shareholder to the new owner. Also, we will need to make necessary filings to update the public register with the details of the new shareholder.

Creation of a new UK company

If you have specific needs, you may set up your own individual limited company.
The main advantage of starting a new Ltd company is that you will have the ability to determine the structure of business that you need, with the name that you choose, and the provisions in the memorandum and articles of association that you want.

Why open a company in the UK?

Here are just a few reasons why businessmen and entrepreneurs may want to open a UK company for their international business:

  • reputable jurisdiction
  • stable tax system that avoids unnecessary changes to tax legislation
  • low corporation income tax rate compared to core European countries (the current rate is 19% and will be reduced to 17% in 2020)
  • exemption of dividends received from subsidiaries in most countries from corporation tax
  • exemption from capital gains tax for trading companies
  • no withholding tax on distributions from the holding company to its parent company or individual shareholders
  • no capital gains tax on profit arising from sale of shares in the holding company by non-resident shareholders
  • tax reliefs and incentives for early stage businesses
  • tax reliefs for research and development companies
  • extensive tax treaty network

Advantages of setting up a company in the UK with us:

Advantages of setting up a company in the UK with us:

Big Ben

You work directly with an AML-supervised trust and company service provider, and thus you get:

  • fast and efficient service, no unnecessary delays
  • best competitive prices – lower cost of UK company incorporation and subsequent annual fees
  • highest level of confidentiality and personal data protection – any information and documents provided for incorporation are kept in our files only
  • immediate status updates on your orders – we do not have to contact any other person to find out the information
  • professional service – we are a group of companies with more than 20 years of experience in the company formation industry
  • comprehensive, all-in-one service – with 187 employees working in our 6 offices worldwide (including the UK) not only do you get company formation or corporate services in the UK, but also legal support, tax planning advice, bookkeeping, preparation and filing of financial statements, translation and other international business services
  • we always have ready-made companies for sale in the UK
  • UK company formation for non-residents

The UK does not impose restrictions on foreign ownership or management of companies. It is therefore possible to open a company in the UK for a non-resident. You will not even be required to visit the UK to incorporate your company and can do it from the country you live in.
What a UK company registration for a non-resident will require is the assistance of an experienced local service provider. We offer company formations in London and our team, skilled in company formation, international taxation, accounting and immigration services, will be glad to guide you through the process and requirements. 

Offshore company registration in the UK

De jure and de facto the United Kingdom is not an offshore zone. Nevertheless, that jurisdiction provides convenient instruments of corporate and tax planning. That’s why a UK company formation may be beneficial from a tax point of view. In this regard, the UK is often referred to as a European offshore.

Subsequent Administration
After incorporation, the UK company shall have to keep accounts and annually submit financial statements, tax returns and confirmation statements to Companies House. Companies – payers of VAT shall also file separate VAT Returns.
Confirmation Statement
Every UK company shall deliver a Confirmation Statement to Companies House at least once a year even if the company is dormant. That document replaced the familiar Annual Return in June 2016. Instead of completing the data, as was the case with the Annual Return, the company now needs to check and confirm that the following information Companies House has about it is correct:

If the Confirmation Statement is not delivered on time, the Registrar may assume that the company is no longer in operation and may take steps to strike it off the register. It is also a criminal offence for which the company and its officers may be prosecuted.

Annual Accounts/Financial Statements
Every company, whether or not they are trading, shall keep accounting records and prepare annual accounts reflecting the company’s state and operating result for the given year. After incorporation, a date for the company’s end of financial year will be determined. It will be the last day in the month of the company’s incorporation.
The first accounts should be submitted within 21 months from the date of registration with Companies House.  Subsequent accounts should be filed within 9 months after the end of each financial year.
Untimely submission of accounts may lead to high penalties. Failure to provide such documents is considered as a criminal offence. All the company’s directors may be prosecuted.

Tax return
After the end of its financial year, a private limited company shall prepare a Company Tax Return (CT600 form) and submit it within one year after the end of the accounting period for Corporation Tax. All corporation tax returns should now be filed with HM Revenue & Customs online. Under the self assessment regime the directors of the company are responsible for ensuring that the tax liability is calculated and any tax owing is paid on time.

Audit

UK bank account

The most of small companies are not obliged to perform an audit (except if the company has such requirement in its Articles of Association).
The company shall be exempt from an audit if it complies with at least two of the following criteria:

  • its annual turnover does not exceed £10.2 million
  • its assets worth no more than £5.1 million
  • it has 50 or fewer employees

Exchange of tax information
The United Kingdom has special bilateral Tax Information Exchange Agreements (TIEAs) with 25 countries and territories, predominantly with offshores.
Aside of that, the United Kingdom is a member of the OECD’s Convention on Mutual Administrative Assistance in Tax Matters of 1988 as well as the amending protocol of 2010.

Disclosure of Information

After incorporation, you will be obliged to disclose information. According to the Companies Act 2006 companies shall notify Companies House of all significant events, and namely:

  • change of directors or their personal details;
  • change of the registered office address;
  • information regarding the capital (statement of capital);
  • change of the main type of activity;
  • information regarding the shareholders (included in the register of the company’s members). Number of their shares, details of transfer of such shares;
  • information on the company’s decision to keep a PSC Register information on the public register;
  • information regarding the persons having significant control (PSC), if the company decided not to keep such information on the public register.

Register of people with significant control (PSC)
In March 2015, the Companies Act 2006 was amended by the Small Business, Enterprise and Employment Act, which introduced the register of people with significant control – PSC register. The new legislation required UK companies and LLPs to maintain PSC registers starting from 6 April 2016.
A person with significant control (PSC) of the company is an individual who meets one or more of the following conditions:

  • An individual who holds more than 25% of shares in the company;
  • An individual who holds more than 25% of voting rights in the company;
  • An individual who holds the right to appoint or remove the majority of the board of directors of the company;
  • An individual who has the right to exercise, or actually exercises, significant influence or control over the company;

The information entered on the register must first be confirmed by the PSC and then be filed with Companies House, where it is made public and is kept indefinitely. Such information includes:

  • Name;
  • Date of birth;
  • Nationality;
  • Country where the PSC usually lives;
  • Service address
  • Usual residential address (this must not be disclosed when making the register available for inspection or providing copies of the PSC register)
  • Date when the person became a PSC in relation to the company
  • Which of the above conditions the PSC meets. For conditions (1) and (2) this must include the level of their shares and voting rights:
  • Over 25% up to (and including) 50%,
  • More than 50% and less than 75%,
  • 75% or more;
  • Restrictions, if any, on disclosing the PSC`s information (whether an application has been made for the individual’s information to be protected from disclosure to the public).

Taxation of UK companies

After incorporation, a UK company shall have statutory tax obligations.
All companies, regardless of size, shall pay the same rate of corporation tax, which is 19%. It is proposed that this rate will fall to 17% starting from the 1st of April 2020.
Dividends (and distributed profit) paid by a company are typically exempt from taxes.
Interest: Interest paid to a non-resident is subject to withholding tax at a 20% rate, unless the rate is reduced pursuant to a tax treaty or the interest is exempt under the EU Interest & Royalties Directive. Reduction under a tax treaty is not automatic and advance clearance must be granted by HMRC.
License payments (Royalties): Royalties paid to a non-resident are subject to withholding tax at a 20% rate, unless the rate is reduced pursuant to a tax treaty or the royalties are exempt under the EU Interest & Royalties Directive. Advance clearance is not required to apply a reduced treaty rate.
There are highly competitive benefits and reliefs for innovative and high-tech industries and businesses dealing with intellectual property, such as tax deductions for qualifying R&D expenditures, lower rate of Corporation Tax to profits earned from patented inventions and certain other innovations (Patent Box) etc.
However, in view of Brexit taking place on the 29th March 2019 we recommend to get updated information on taxes because if the UK leaves the EU without a deal, the way that interest, royalties and dividends are paid between UK and EU companies may change.

Value-Added Tax (VAT)

VAT in the United Kingdom is levied in accordance with the Value Added Tax Act 1994 and  COUNCIL DIRECTIVE 2006/112/EC of 28 November 2006 “On the common system of value added tax”.

VAT is applied to most of import transactions, sales of goods and provision of services. The standard rate is 20%. Some types of goods are taxed at the rate of 5% or are exempt from VAT.
To work with VAT you need to register with HMRC. 
VAT registration is mandatory if:

  • your VAT taxable turnover is more than £85,000 over the last 12 months, or
  • you realize that your total VAT taxable turnover is going to be more than £85,000 in the next 30-day period.
  • Your company purchases goods for more than £85,000 from EU VAT-registered suppliers, or
  • If neither you nor your business is based in the UK, then you must register as soon as you supply any goods and services to the UK (or if you expect to in the next 30 days).

You can register voluntarily if your business turnover is below £85,000. You must pay HMRC any VAT you owe from the date they register you.

Double Taxation Treaties

The United Kingdom has agreements for avoidance of double taxation with more than 100 countries. Despite that, you will not be able to use such agreements if the UK company is nominal, i.e. if it is an agent of another company in a tax-free jurisdiction that receives the most of income. Thus, there is no point in UK company creation only for the sake of application of a tax treaty.
It is also necessary to have economic substance in the territory of the United Kingdom, i.e. to have a real office and manage the company’s affairs from the territory of the UK etc. The company may use international tax agreements only if the income is considered as the income of the UK company. It is not possible to use tax agreements if the company files so-called “dormant accounts”.

Opening a bank account in the UK for a non-resident

Opening a UK company together with a banking solution is not an easy task because nowadays banks have to fulfill a large number of requirements and formalities. Account opening procedure is the same for practically all banks in the sense that you will have to submit personal and company data, alongside with a detailed description of your business, and the bank will consider these and decide if an account can be opened. Some banks will go as far as holding a personal interview with a beneficial owner and/or director of the company as part of their account opening requirements.
Some people may have a misconception that bank account opening is confined to the jurisdiction of incorporation. However, this is not always the case.   
You don’t have to be a UK resident to open a UK business bank account and your company may open accounts with any bank worldwide. For instance, you may set up a company in London, but open an account for it in Cyprus, Hong Kong or any other jurisdiction.
We can assist with a UK company formation for a non-resident with a bank account. Depending on the type of your business, we can recommend you the most convenient bank, and then guide you through the account opening process.
Feel free to contact us for a free consultation!

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General information

Total area 243.809 sq. km
Population 63.395.574 (2013)
Capital London
Unemployment 7.1% (2013)
Corruption perceptions index rank 14 (2013)
Government type Constitutional monarchy
Executive branch Cabinet headed by Prime Minister
Legislative branch bicameral Parliament (House of Commons and House of Lords)
Judicial branch High court, Crown Court and Court of Appeal
GDP per capita rank 24 (2013)

Shares and share capital

Minimum authorized share capital N/A
Minimum issued share capital N/A
Minimum paid share capital N/A
Authorized capital payment deadlines N/A
Bearer shares permitted No
Issued capital payment deadlines N/A
Standard currency British pound
Standard authorized share capital N/A
Standard par value of shares N/A
Shares with no par value permitted No

Taxes

Min. rate for corporate tax 19%
Capital gains tax 21%
VAT 20%
Withholding tax 20%
Exchange control No
Personal tax 45%
Corporate tax (in detail) Main rate – 19%
Capital gains tax. Details Capital gains form part of a company’s taxable profits.
VAT. Details There are three rates of VAT, depending on the goods or services the business provides. The rates are: standard – 20%, reduced – 5%, zero – 0%. There are also some goods and services that are exempt from VAT or outside the UK VAT system altogether.
Other taxes Real property tax; Inheritance tax; National Insurance Conrtributions
Government fee 40 pounds
Stamp duty 0.5%

Accounts

Requirement to file accounts Yes
Publicly accessible accounts Yes
Audit required No
Requirement to file Annual Return Yes
Publicly accessible Annual Return Yes
Requirement to prepare accounts Yes
Double tax treaties network 129
Tax Exchange Information Agreement network 26
OECD member Yes

International law relations

Party to the Hague Convention (Apostille) Yes
Legal system common law
Double tax treaties network 129
OECD member Yes

Tax treaties entered

Tax treaties entered Albania, Algeria, Argentina, Armenia, Australia, Austria, Azerbaijan, Bahrain, Bangladesh, Barbados, Belarus, Belgium, Belize, Bolivia, Bosnia and Herzegovina, Botswana, Brunei Darussalam, Bulgaria, Canada, Cayman Islands, Chile, China, Colombia, Croatia, Cyprus, Czech Republic, Côte d’Ivoire, Denmark, Egypt, Estonia, Ethiopia, Falkland Islands (Malvinas), Faroe Islands, Fiji, Finland, Former Yugoslav Republic of Macedonia, France, Gambia, Georgia, Germany, Ghana, Greece, Grenada, Guernsey, Guyana, Hong Kong, Hungary, Iceland, India, Indonesia, Ireland, Isle of Man, Israel, Italy, Jamaica, Japan, Jersey, Jordan, Kazakhstan, Kenya, Kiribati, Korea (Republic of), Kosovo, Kuwait, Latvia, Lesotho, Libya, Liechtenstein, Lithuania, Luxembourg, Malawi, Malaysia, Malta, Mauritius, Mexico, Moldova (Republic of), Mongolia, Montenegro, Montserrat, Morocco, Myanmar, Namibia, Netherlands, New Zealand, Nigeria, Norway, Oman, Pakistan, Panama, Papua New Guinea, Philippines, Poland, Portugal, Qatar, Romania, Russian Federation, Saudi Arabia, Senegal, Serbia, Sierra Leone, Singapore, Slovakia, Slovenia, Solomon Islands, South Africa, Spain, Sri Lanka, Sudan, Swaziland, Sweden, Switzerland, Tajikistan, Thailand, Trinidad and Tobago, Tunisia, Turkey, Turkmenistan, Tuvalu, Uganda, Ukraine, United Arab Emirates, United States, Uruguay, Uzbekistan, Venezuela, Viet nam, Zambia, Zimbabwe
Tax Exchange Information Agreement (TEIA) Anguilla, Antigua and Barbuda, Aruba, Bahamas, Belize, Bermuda, Brazil, Curaçao, Dominica, Gibraltar, Grenada, Guernsey, Isle of Man, Jersey, Liberia, Liechtenstein, Macao (China), Marshall Islands, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, San Marino, Sint Maarten, Turks and Caicos Islands, Uruguay, Virgin Islands, British