Establishing a company in the United Kingdom
Workaholic is an accounting and company service provider, managing the establishment and administration of private limited companies for customers' companies globally. We recommend use of a company service provider or professional services firm to assist compliance with legal and governmental obligations.
One-time requirements at time of setup
1. Submission of an incorporation form (IN01), either on paper or online. A fillable form can be found here, and guidance can be found here.
2. At the time of submission of an application, a confirmation must be made that the directors have consented to act as directors for the company.
3. Articles of association. Model articles of association are available here, though alternate or customised articles are normally recommended for greater ease, clarity, and control of a company's administration.
4. Government incorporation fee, starting from £12.00 online, as at 1 Sep 2020.
Other common requirements, but not necessarily at the time of setup
1. Notice to HMRC of commencement of business within charge of Corporation Tax.
2. Registration with HMRC for VAT, especially where the company expects the value of all of its sales in a rolling 12 month period will exceed £85,000 within 30 days.
3. Registration for PAYE if hiring any type of employee on any type of payroll.
1. Confirmation Statement (CS01) (previously known as an Annual Return) submission to Companies House.
2. Regular (normally annual) financial accounts submissions to Companies House and HMRC.
1. At least 1 director, who must be a person (natural individual), but can be a foreigner and can be non-resident. For a small business, this will normally be an owner (member) of the business, and for a larger business this will normally be an officer of the company or its group who might not be an owner (member/shareholder). As there are substantial responsibilities required of a director, many professional service firms will not provide a director service, and those who do may charge substantial fees and the employment of a director may be costly.
2. A UK address for use as the company's registered address.
1. Companies House guidelines on name regulations for UK companies
2. A limited company must normally include Ltd or limited at the end of its name.
Information that is published publicly, or kept private by government
1. Accounts or partial details of accounts are public.
2. Company registered and officer (including director) correspondence addresses are made public. A correspondence address must be made public, though where the officer makes use of the option for this to not be a residential address, a residential address must still be provided to Companies House.
In many cases, firms offering company services will need to receive identification and declaration documents from directors, secretaries, and members, and those who are being provided nominee director or nominee member services.
The United Kingdom of Great Britain and Northern Ireland is a participant of the OECD's CRS Common Reporting Standards and MCAA Multilateral Competent Authority Agreement, and has a US Department of the Treasury model 1 intergovernmental agreement and related agreement with the US as a result of FATCA, the Foreign Account Tax Compliance Act of 2010, which was made US law as part of the Hiring Incentives to Restore Employment Act of 2010. Non US residents, non US green card holders, and non US citizens may wish to proactively (though some financial service providers will ask for the submissions of such forms on account setups and routinely thereafter) submit a W-8BEN to financial service providers for, amongst other purposes, being allowed particular accounts and being recognised as exempt from certain US witholding taxes.
Starting and administering a company remotely, including online, and whether it is necessary to visit the United Kingdom
A company can be incorporated in the UK without its establishers ever visiting or moving to the UK. Online services for banking, company administration, and taxation management, are comprehensive and generally easily available for most business types.
Main constitution(s), statute(s), laws, and languages governing the United Kingdom
EU Regulations, Directives, and other Acts
Basic law, and related constitutional instruments
Legislation, including Acts of Parliament and Subsidiary Legislation, including Companies Act 2006, and amendments
Case law, rules of equity, and tort
Operate in other jurisdictions with a UK company
Many substantial markets in the world allow the sale of goods and services into their jurisdiction, but foreign sellers may still be subject to, especially, product and service regulations and licenses, sales and value added taxes, reporting, and more. Such requirements are often applicable equally to local companies, and foreign companies from a range of jurisdictions, this is a factor that businesses would likely have to consider and make provision for, regardless of their place of business.
Headline advantages of establishing a business in the United Kingdom
The United Kingdom has a substantial body of skilled and naturally multi-lingual people. The legal system and changes to it are relatively transparent, planned, and predictable. The jurisdiction also has substantial corridors to and ties with a large number of other jurisdictions, that share double taxation treaties and other methods of recognition to ease business. The country's digital and financial infrastructure, and aviation connections, is one of the best in the world. For those who earn above a relatively modest wage by developed world standards, the government's intended visa regime from 1 Jan 2021 is highly accessible.
Tax liabilities, tax reporting obligations, and tax residency
If UK limited companies prepare their tax returns on the basis of being tax resident in Hong Kong, HMRC will likely accept this at face value without challenge.
In addition to corporation tax concerns, VAT familiarisation may be challenging.
Main private limited company administration regulators in the UK
For company registrations and publishing of records, CH Companies House.
For tax, HMRC (Her Majesty's Revenue and Customs).
Recognition of expenses before commencement of business
Expenses for a date prior to commencement of business, and expenses for a date prior to a company's incorporation date, generally can be included as tax deductible expenses in a company's financial accounts.
Option to remain dormant before operations begin
UK companies can be, or become, dormant, and brought back to life.
Personnel, including employment and migration
1. Employees taxes must be paid directly to HMRC by employers.
2. Minimum pension payment, and national insurance payment obligations, apply to employers.
Alternate ways to conduct business in the United Kingdom
1. To conduct business activities in the UK, business visitors are allowed, sometimes without the need for a visa application, depending on the nationality of a visitor.
2. A UK establishment of a foreign company can be registered and be sufficient for most business activity.
3. Foreign companies may qualify for a standard rather than simplified VAT registration but might need to register a UK establishment to do so.