Can A Non-Resident Set Up A Company in the UK?
By Amar Ali, Immigration Solicitor
The United Kingdom is widely considered one of the easiest places on the planet to set up and operate a business. This is borne out by the World Bank ‘Doing Business’ ranking, which places the UK at 8th in the world, ahead of Norway and Sweden, Australia, and Taiwan. Add to this the world-class transport links and hubs available in the UK, the ease of access to investment and finance, and the availability of skilled expertise in new and innovative fields, it is easy to see why so many international business owners and entrepreneurs wish to set up a company entity in the UK.
As a non-resident of the UK, if your plan is to set up business in the UK as a limited company, the process could not be easier. In this article, we will explain whether non-residents can set up a limited company in the UK and the process for doing so.
Is It Possible for A Non-Resident to Start A Company in the UK?
Yes, as a non-resident of the UK, you can set up a limited company in the same way as a UK citizen, EU national, or settled person living in the UK.
It is important to note, however, that you may not need to create a UK company in certain circumstances. You will not need to incorporate a UK company if you have an overseas business with no physical address in the UK. On this matter, the Companies House says, “The fact that an overseas company is carrying on business in the UK does not automatically mean that it has to register with Companies House. Registration of an overseas company is only required when it has some degree of physical presence in the UK (such as a place of business or branch) through which it carries on business… an independent agent who conducts business on behalf of the company is not a UK establishment of an overseas company; neither is an occasional location such as a hotel where a director may conduct business during periodic visits to this country”. In addition, you cannot register certain types of business entities as a limited company, namely, partnerships, LLPs, unincorporated bodies and government agencies.
Before you do proceed with setting up a limited company in the UK, it is advisable to get legal advice from experienced business lawyers. Your immigration lawyers will be able to recommend a business law specialist who will clarify your current business arrangements, your future plans, and then outline the types of business entity which you can consider, and the process you need to follow.
How Do I Register A Limited Company in the UK?
The process for setting up a company in the UK is broadly the same from UK nationals and those living overseas. The steps are as follows:
1) Register company with Companies House
This is referred to as the process of incorporation. To incorporate your overseas business as a limited company in the UK, you will need to complete an ‘OS IN01’ form, and submit this to Companies House. Along with your application, if your business is registering its first entity in the UK, you will also need to provide:
- a certified copy of your company’s constitutional documents (e.g. charter, statute, memorandum and articles of association etc) with a certified translation in English if the original is in a language other than English
- a copy of the company’s latest set of accounts (with a certified translation in English if the original is in a language other than English) if an overseas company is required to prepare and deliver accounts under parent law. Note - there are different accounting requirements depending on whether the company was incorporated in an EEA or non-EEA state.
You will also need to list at least one director and one shareholder on your application. The cost of registering a limited company with Companies House is £20.
2) Register to pay tax with HMRC
As a company operating in the UK, you will need to register your new business with HMRC, for the purposes of corporation tax, Value Added Tax (VAT), and Pay As You Earn (PAYE) tax for employees.
3) Setting up a UK bank account
It is not mandatory that you set up a UK bank account for your UK company, but it can make the process of operating your business much easier. Unfortunately, the process of setting up a UK bank account for a non-UK resident is less easy than for UK nationals, in large part due to the many Anti Money Laundering checks which UK banks are required to carry out. There are a number of third-party companies which specialise in opening UK bank accounts for overseas businesses; this can reduce the overall time to opening your account and make the process much simpler.
What Happens If the Overseas Company Becomes Insolvent?
If the overseas company becomes insolvent and is ‘wound up’ according to laws outside the UK, a ‘Notice of winding up of an overseas company’ must be filed with Companies House. According to Companies House guidance, if the process of winding up the overseas business started prior to the UK company being registered, then the Notice of winding up must be delivered no more than one month after the company first opened the UK establishment.
Final Words
Where possible, it is always advisable to rely on in-country expertise to help you set up your company in the UK. An immigration solicitor in the UK will be able to introduce you to specialists in the areas of company formation, accounting, taxation, commercial property, human resources and skills recruitment, and any other areas for which you need assistance. Seeking expertise in these respective areas will enable you to focus on your business and your future plans to open a company in the UK. We wish you all the best with your new company venture in the UK.
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