United Kingdom (UK) Offshore Company

The United Kingdom (UK) offers several offshore company formation vehicles, used for a variety of business endeavors. While the UK is not considered an offshore tax haven, it has many attributes that are similar to your traditional haven for non-resident companies.

The Private Limited Company (PLC) is the most widely used and gives individuals and companies the most flexibility out of all the other company types. Private Limited Companies are under the regulation of UK Companies Act 1985 which is the latest act that governs the formation of English Companies.

There are two main types of UK Private Limited Companies, those that are limited by shares and those limited by guarantee, the former being the most common. There are over two million such companies registered with the UK Companies House, making the UK and the UK Ltd Company a long-established destination for commercial and business activities. The second ost popular structure is the UK LLP which is similar to an LLC (but still quiet different).

The UK is a signatory to over 100 different forms of treaties and is a premier financial and banking financial centre. Its numerous trade advantages, proximity to the European Union, and its double taxation treaties all give UK companies an edge in the globalizing world of commercial and financial business.

Though the UK is a country that has traditional business regulations in a high-tax environment, they too offer corporate entities for non-resident with tax neutral possibilities, making the UK the next best thing in the offshore jurisdiction world.

UK Companies Act

The UK Companies Act goes back to 1985. Legislation has been amended twice since then, in response to the ever-evolving global financial marketplace. A UK Private Limited Company is a separate legal entity that remains distinct from its members and directors.

All individuals and entities affiliated with a UK PLC have limited liability that protects them from being held personally liable for the debts incurred on the part of the company; making the maximum liability limited to the amount of capital or issued shares. This attractive company formation structure gives single-member companies and small businesses an opportunity to attract potential investors and gives legal and financial protection to members and shareholders alike.

For more information on the Advantages of the United Kingdom as an Offshore Financial Center, click here.

Advantages of Setting up a Limited Company in the UK as a Non-Resident

• Single-member ownership is available
• Nominee Services are permissible
• The UK has numerous Double Taxation treaties
• The UK has over 100 trade agreements in place
• A world-leading financial centre
• Access to various trade markets in the European Union (EU)
• A private limited company has a separate legal existence from its members
• A Limited company legitimizes itself for many business activities
• A UK private limited company has a strong and structured shareholder conflict resolution procedure in place
• Simply transferability procedures of ownership of shares.
• A number of national insurance benefits.
• Limited Liability status gives credibility to suppliers and customers from the transparency of the UK company system
• Business expenses can be claimed against tax

Top Uses

• Commercial Activities
• Trading House
• Holding Company
• International investment Company
• Asset Protection

Key Corporate Features

Company Package

Includes:

1. Government Registration Fee (First year)
2. Registered Office Address (First year)
3. Registered Agent Services (First year)
4. Company Secretarial Maintenance
5. Certificate of Incorporation
6. Memo & Articles of Association
7. Appointment of 1st Directors
8. Consent Actions of the BOD
9. Share Certificates
10. Register of Directors
11. Register of Officers
12. Register of Shareholders
13. FREE Phone and/or email consultations 

Registration Requirements

To open a company in the UK, you must first register the company in the UK with the following mandatory details:

• Certified copy of passport
• Names and details of directors
• Details of shareholders and share capital
• Registration fee
• The Company’s name and registered address (if pre-existing)
• Articles of Association and Company Memorandum
• Completed IN01 Form

Tax Rates for a Private Limited Company

UK incorporation regulations require Private Limited Companies to pay UK Corporation Tax at a rate of 20 – 28%, which is determined after a company has filed their annual returns. Company Directors are also liable to pay UK income tax for any profits from the company. No taxes are paid on the dividends of a holding company and there is no double taxation on dividends distributed through to EU member countries.

After setting up a company in the UK and going through the incorporation process, a Unique Taxpayer Reference (UTR) number will be issued by the HM Revenue and Customs (HMRC), which will be sent to the Company’s registered address. The HMRC will instruct you how to register your company, file the company accounts and pay corporate taxes.

What is the VAT Rate in the UK?

The Standard VAT rate in the UK is 20%.

The VAT Reduced rate is 5% and applies to some goods and services, such as children’s car seats and home energy.

If a company does not have an annual turnover of more than GBP 67,000, then Registration of VAT is not required. A Company that does register can collect a number of benefits through registration, such as the ability to reclaim input tax and collect VAT from customers. Companies register through the (HMRC) website.

Some things are exempt from UK VAT, such as postage stamps, financial and property transactions. The VAT rate businesses charge depends on their goods and services. Check the rates of VAT on different goods and services.

Determining the Business Structure

Choosing the right business structure is foundational to the success and sustainability of a company in the UK. Each form has its own implications for liability, taxation, and control.

What Different Types of Limited Companies Can be Formed in the UK?

In the UK, individuals can form two main types of limited companies: Private Limited Companies (Ltd) and Public Limited Companies (PLC). Private limited companies are owned by shareholders who have limited liability, and shares do not trade publicly. Conversely, public limited companies may offer shares to the public and have more stringent regulatory requirements.

Comparing Sole Trader, Partnership, and Limited Companies

Sole traders carry full liability for debts, which can risk personal assets. A partnership involves shared responsibility and liability among partners. Limited companies offer liability protection, potentially reducing personal financial risk.

Understanding Limited Liability Partnerships

A Limited Liability Partnership (LLP) combines elements of partnerships and limited companies. In an LLP, partners have limited liabilities, meaning they are not personally responsible for the debt of the partnership. This structure is beneficial for professional services firms.

Choosing Between Private and Public Limited Companies

When deciding between a private and a public limited company, one should consider the business goals in terms of scale, investment, and shareholder engagement. Private limited companies usually require less capital to set up and have less rigorous disclosure requirements. Public limited companies can raise capital by selling shares to the public but must meet higher transparency standards and are subject to more regulations.

Are non-UK residents allowed to form a company in the UK?

Yes, non-UK residents are permitted to form a company in the United Kingdom. The company formation process for non-residents is akin to that for residents living within the UK. Non-residents can take on various roles, including company director, shareholder, or company secretary.

Key Requirements:

• Registered Office: A company must have a registered office address within the UK. This is essential for incorporation and serves as the official address for all correspondence.

• Company Director: A non-resident may act as a company director. While residency is not a requirement, the individual must adhere to all related legal responsibilities.

• Shareholders: Foreign nationals can be shareholders of the UK-based company without living in the UK.

For more detailed guidance on the specific steps involved in forming a company as a non-UK resident, including the documentation required and the various types of company structures available, non-residents can reach out to incorporation service providers or consult legal professionals who specialize in UK corporate law.

What Documents Are Required to Successfully Set Up a Company in the UK?

When setting up a company in the UK, several key documents are necessary for successful registration. These documents are foundational for the legal structure and registration with Companies House, the UK's registrar of companies.

Memorandum of Association: This legal statement, signed by all initial shareholders or guarantors, includes an agreement to form the company and confirmation of intentions to participate in the company formation.

Articles of Association: These are the written rules about running the company, agreed by the shareholders, directors, and the company secretary. They outline the duties and powers of the directors and the means of handling company shares.

Form IN01: This application form is required to register a company with Companies House. It collects details about the company’s office, director(s), secretary (if applicable), and shareholder(s) or guarantor(s).

• Personal Information: For each person involved in the company (including directors and shareholders), one must provide:
  • Full name
  • Date of birth
  • Nationality
  • Occupation
  • Residential address

Company directors must also provide at least three pieces of personal identification information which could include:

• Town of birth
• Mother’s maiden name
• Father’s first name
• Telephone number

Finally, every company will receive a Certificate of Incorporation upon successful registration. This official document confirms the legal existence of the company and includes the company number and formation date. It must be kept with the company's records.

Preparing the Necessary Documentation

When setting up a company in the UK, it's crucial to prepare and submit the correct documents to Companies House. These documents will define the company's structure and comply with legal requirements.

Drafting the Memorandum of Association

The Memorandum of Association is a mandatory document required for incorporating a company in the UK. It establishes the constitution and outlines the company's scope of operation. This document includes:

• The company's name
• The registered office address
• The nature of the business (objects)
• The liability of members (limited by shares or guarantee)
• The capital structure (initial shareholdings)

The Memorandum must be signed by the initial shareholders or guarantors.

Creating the Articles of Association

The Articles of Association are a set of internal rules governing the company’s operations. They cover aspects such as:

• The rights and responsibilities of directors and shareholders
• Procedures for appointing and removing directors
• The conduct of board and general meetings
• The issuance and transfer of shares

A company can either adopt the standard 'Model Articles' or draft its own to suit specific business needs.

Assembling Additional Paperwork

Beyond the Memorandum and Articles of Association, certain supplementary forms are necessary:

1. Form IN01: This application form for registration includes:

   • Details of the company's proposed officers (directors and secretary)
   • The proposed address of the registered office
   • Details of shareholder or guarantor consent

2. Statement of Capital: When shares are involved, a company must provide a statement of capital and initial shareholdings. This statement includes:

   Information	Description
   Number of shares	The total number of shares being issued
   Aggregate nominal value	Overall value of the shares
   Shareholder information	Names and addresses of the shareholders
   Paid-up capital	Amount paid on each share

Careful preparation of these documents is essential for a smooth company registration process.

What steps are involved in registering a new company in the UK?

To register a new company in the UK, individuals must complete several key steps:

1. Verify the Business Structure: Determine if a limited company structure suits the business needs.
2. Choose a Company Name: Select a unique name that complies with all naming regulations.
3. Appoint Directors: At least one director must be appointed to manage the company.
4. Appoint a Company Secretary (Optional): Some companies may choose to appoint a secretary, though it is not mandatory.
5. Identify Shareholders or Guarantors: Decide who will have control over the company through shares or guarantees.
6. Prepare Documents: Create the necessary legal documents, including the memorandum and articles of association.
7. Register with Companies House: Submit the application to Companies House, either online, by post, or through an agent.

Companies must also register for Corporation Tax within three months of commencing business activities. The registration process can be conducted online, which is typically faster, or via postal forms. It's important to ensure that all information is accurate and complete before submission to avoid delays.

Registering Your Company

Registering a company in the UK is a structured process that involves naming the company, determining a registered address, appointing directors, and identifying Persons with Significant Control (PSCs). All companies must register with Companies House, which includes a registration fee.

Choosing a Company Name and Address

A company must choose a unique name that is not similar to any existing registered company's name. It should avoid using sensitive words or expressions unless with permission. Additionally, the registered office address must be a physical address in the UK where official communications can be sent; P.O. Boxes are not permitted unless they are part of a full address that includes a physical property.

Name Availability Check:

• Companies House: Facilitates online search for name availability.
• Name Constraints: Avoidance of sensitive or misleading words.

Company Address Specifications:

• Location: Must be in the same country of the UK where the company is registered.
• Accessibility: Should be able to receive official mail.

Appointing Directors and a Company Secretary

At least one director must be appointed who is legally responsible for running the company and ensuring reports and accounts are properly prepared. A director must be at least 16 years of age. While a company secretary is not mandatory for a private company, it may be beneficial to ensure compliance with statutory requirements.

Director Requirements:

• Minimum Number: One
• Age Limit: At least 16 years old
• Responsibilities: Legal operation of the company

Company Secretary (Optional):

• Role: Ensuring compliance with statutory requirements
• Benefit: May assist with governance and paperwork

Identifying Persons with Significant Control

Companies need to identify individuals who have significant control over the company. PSCs are individuals who hold more than 25% of shares or voting rights or have the right to appoint or remove the majority of the board of directors.

PSC Criteria:

• Shareholding: More than 25%
• Voting Rights: More than 25%
• Board Influence: Right to appoint or remove directors

Disclosure Requirements:

• Register: Companies House maintains a public register of PSCs.
• Accuracy: Information must be accurate and kept up to date.

Corporate Details: Starting a Limited Company

Anonymity, Confidentiality and Disclosure

The details, information and names of all Directors and shareholders are made publically available. All financial and accounting records are publically available. The details of the beneficial owner are kept confidential. Nominee services are allowed, which can make names and details of shareholders and directors confidential.

Company Shares

A UK Private Limited Company may issue registered, preference, and redeemable shares and shares with or without voting rights, the details of which should be stated in the Companies formation documents.

Required Capital

The minimum paid up share capital for a UK Private Limited Company is GBP 1 with a usual authorized amount of GBP 1,000. Capital is usually denoted in the form of shares with one share being the minimum.

Financial Statements required

All UK Companies must file accounts with thee Register of Companies and the Inland Revenue. Companies that qualify as small companies, i.e. those with an annual turnover of less than GBP 5.6 million, may not need to have accounts audited and may apply for an audit exemption.

Directors

The minimum number of Directors needed for a UK Private Limited Company is one (1), who does not need to be a resident of the UK and may reside anywhere in the world and be of any nationality. Corporate Directors are allowed, however, a company must have at least one director who is an individual.

Company Secretary

A Private Limited Company does not require a secretary. If it is a single member company then the director can be the secretary.

Company Meetings

Company meetings are not required and, if meetings take place, they may be anywhere in the world.

Principal Corporate Legislation

UK Private Limited Companies are regulated by the UK Companies Act 1985 and its amendments in 1989 and 2006

Type of Law

English Common Law

Shareholders

There is minimum of one shareholder required for a UK Private Limited Company. A shareholder may be an individual or a corporate body and may be a resident and citizen of any country. Shareholders do not need to be local. Information and details of shareholders are made available to the public. Nominee services are permissible.

Trading Restrictions

A Company is restricted from conducting business in banking, insurance, consumer credit and all other activities in the finance industry.

Exchange Controls

There are no exchange controls in the UK.

Powers of the Company

A UK Private Limited Company has the same rights as a natural person.

Language of legislation and Corporate Documents

English or Welsh

Registered Office required

A registered office is required for a UK Company.

Local Presence

A local office Is required for all UK companies. Local Directors, Shareholders and Secretary are not mandatory. A list of all the shareholders must be held at the local registered office.

Audit Requirements

UK Companies are required to submit audited accounts, though all companies earning less than GBP 5.6 million can apply for an audit exemption

Annual Reporting

All UK Companies must file and annual return and annual accounts the UK Inland Revenue every year no matter if a company has traded or not

Shelf Companies available

Yes

Time required to form offshore company

1 – 2 days

Name Restrictions

An UK company may not use similar or identical names that are already in use, any name that suggests patronage of the Royal family or the UK government, any name that is undesirable or seen as being offensive

Names of Company requiring a special licence or permission

Company names that include the words assurance, bank, building society, insurance, reinsurance, are required to get prior approval from the UK Company Register

Permitted limited liability suffixes

A UK Private Limited Company must have the suffix Limited or Ltd.

Access to Double Tax Treaties

The United Kingdom has signed a number of double taxation treaties which can greatly benefit companies avoid paying double taxes

Minimum Annual Tax

N/A

FAQ

Why do businesses register a company in the United Kingdom?

Businesses register a company in the United Kingdom because international corporate structures provide asset protection and tax reduction possibilities that are found only in non-resident legal structures. The UK offers both a safe and stable jurisdiction with a favorable tax regime for nonresident companies giving companies a business-friendly corporate environment. 

The government and regulatory bodies seek to attract regional and international businesses by providing business-friendly policies to attract investors and entrepreneurs into the country.

How much does it cost to start a company?

UK company registration costs vary, which is why we do not include them on our website. Prices depend on the legal and corporate services required, as well as secretary, auditing and signatory services which are often needed (though not always) if you are incorporating a non-resident company.

Registration and incorporation fees for 1st-year companies vary anywhere from 1000-5000USD with 2nd-year fees ranging anywhere from 500-2000USD. However, even these figures are not always the case, as all of this depends on the services required, so beware of any service provider that states their fees exactly, as you will be disappointed in seeing that number change. Get in touch for a price quote.

Can I open a business bank account for my company?

Opening a business bank account is definitely possible and is one of the main reasons why businesses open a foreign corporation in the first place. However, it often can be the most challenging part of any offshore incorporation process because of the requirements and documents needed in order to satisfy Anti Money Laundering (AML) and Know Your Customer (KYC) laws.

That being said, some jurisdictions are harder than others and we will assist you through the entire process.

Can Offshore Protection create a company for me?

Yes, we can! Offshore Protection has been establishing companies around the world for nearly three decades. We have engaged in client legal and corporate services, including opening companies, offshore trusts, getting financial licenses, and accounts in dozens of countries around the world. Get in touch to find out more.

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