Every successful foreign entrepreneur has probably thought about expanding a business to other countries. The huge European sales markets, minimal bureaucratic requirements, and the opportunity to save and increase capital are attractive. However, when it comes to practical implementation, an entrepreneur is often puzzled. Which country to choose? What is the most stable and recession-proof economy? Which jurisdiction has all the necessary conditions for a successful business growth? For centuries, the UK has been not only a comfortable country to reside in, but also a place that seems to have been designed for entrepreneurship.
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Why Should I Choose the UK?
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Due to its unique geographical location, the UK is situated at the crossroads of Old and New World trade routes. During its heyday, the British Empire included so many different territories and nations that the English were proud to say, “The empire on which the sun never sets.” Although the colonial period is in the past, independent colonies continue to develop economic relations with the former metropolis, and the UK economy remains reliable and stable.
That is why London is one of the world’s largest financial hubs, and companies registered in the UK enter a highly competitive business environment with inexhaustible international markets. However, the UK can offer more than just reliability and potential for growth.
- Over several centuries, all the processes related to registering and running a business in the UK, preparing and submitting statutory reports, have been brought to perfection. Now you can open a company remotely in a matter of days. Moreover, if it is registered as an active company in the UK, your cooperation with the regulatory and tax authorities will be minimized.
- The English are proud of their incorruptible courts that are independent of the executive branch. If you get involved in litigation, you will be much more likely to get an impartial and fair court ruling in the UK.
- The UK tax regime is not mild, but the legislation provides plenty of opportunities to optimize business tax burdens. In addition, the UK corporation tax is considered one of the lowest in Europe.
- Besides exploiting loopholes in tax legislation, small and medium-sized enterprises can participate in government business support schemes that provide both significant tax benefits and government assistance.
- Finally, it is about the prestige of the jurisdiction. The UK has never been offshore; it is an anti-money laundering jurisdiction, so a company with a UK base is respected by partners, clients, and suppliers.
Which Legal Form Should I Choose to Register a Company in the UK?
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As in any other modern state, an entrepreneur can choose the most suitable type of company for a business in the UK. There are four legal forms that are suitable for most objectives.
1. A limited liability company (LTD) is the most common type of company, equally suitable for small and medium-sized businesses. In an LTD, liability is limited to the company’s shares or guarantees. Consequently, founders are only responsible for company debts up to the value of shares or guarantee amount.
There is no limit to the amount of the share capital of an LTD company, so it can be as little as £1. Shareholders can act as directors or nominate someone to do it.
2 . A public limited company (PLC). In this business structure, liability of the founders is the same as in an LTD. It is limited to their shares in the share capital. But it must have a nominal value of at least £50,000 and then the company is allowed to trade its shares on the stock market.
This legal form is more favorable for large enterprises. A PLC must have at least two shareholders, two directors, and one of the directors should be an individual.
3. A limited liability partnership (LLP) is a specific business structure in the UK because in this case the organization is not a taxpayer. The received profits are distributed among the partners who report to the tax authorities individually. It provides significant tax benefits for partnerships which have their business outside the UK and whose partners are not tax residents. Limited partnerships do not pay stamp duty when they purchase and sell property.
LLP partners have limited liability. Liability of partners is limited to the contributions made by them at the time of registration. Designated partners, at least two of them, are criminally and administratively liable for identified violations (e.g. in reporting).
4. There are key differences between a Scottish limited partnership (SLP) and an LLP:
- A company has a registered address in Scotland.
- A general partner of a SLP is the only one and is fully liable for the organization’s debts.
- If aт SLP does not do business in the UK, no annual accounts have to be filed.
As for the remaining aspects, including cooperation with the tax authorities, an SLP does not differ from an LTD.
What is a Dormant Company?
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If a company is registered in the UK but carries out no business activities, it is considered dormant. If you want to register a unique name for your business or plan to enter the UK market, it’ s reasonable to open a dormant company. A company can be dormant as soon as it is registered. In this case, you will not have to report your taxes, but once a year you will have to submit a confirmation statement to the Companies House confirming your status.
Standard package that is perfect for registering a dormant company. Experienced advisors will help you prepare supporting documents, choose a unique name and find the right algorithm for your future business activities. In a short time, a dormant company will have a registered legal address. You will also have company secretary services if there are changes to the Articles and an address to communicate with the Companies House.
An active company can also become dormant for various reasons if it has no liabilities or debts. But the Companies House must be notified about the decision to become ‘dormant’ and, in addition to a nil return, you will also have to report to tax authorities annually.
How Can Trading UK Company Successfully Resolve All Organisational Issues?
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1. If your company or partnership carries out no business activities in the UK, you might still receive letter and phone calls from authorities, suppliers, and clients.
All these issues can be solved successfully with the standard plus package. It will not only help you register a company in the UK, but also provide you with a correspondence address in the UK and a secretary who sends you an email with incoming emails and phone calls at the end of the working day.
2. If you register a company with a strong intention to expand into the highly competitive and promising UK market, you need a bank account in the UK, VAT registration with the HMRC and a physical presence in the country.
When you buy package for your UK start-up, you can count on all the options mentioned previously , plus:
- legal assistance to open a bank account in a UK or European financial institution (you will be provided with a business address)
- visa support for two employees who come to the UK on visitor visas
- business consultation on arising issues
- VAT registration.
3. Of course, every case is unique and a start-up entrepreneur may have challenges that go beyond standard solutions. But even then our specialists can provide professional support.
If it is necessary, Imperial & Legal will provide you with nominee services (e.g. a nominee director), help with the company’s annual accounts and show you how to prepare a tax report.
