Every owner of a successful foreign company has at least once thought about expanding their business to the West. Huge markets, minimal government interference and other favourable conditions attract businesspeople to Europe from all over the world. But how to choose the right country? Where will you take off quickly? Which country welcomes new foreign entrepreneurs and even provides significant support? The UK is the place where you will get all the answers and your business will succeed.
Why Register a Company in the UK?
There are at least five obvious reasons to register a foreign branch in the UK. And there are numerous additional benefits that you will find after you have launched your business on the hospitable British land.
1. The prestige of a company registered in the UK
It is a common thing for a business to be registered in a country where they do not trade – this would not raise eyebrows. However, if you are not a corporation giant with the state among your shareholders, registration in what used to be traditional overseas tax havens can play a cruel trick on you.
By contrast, even a small company with UK roots will be respected the by suppliers and partners, because it is a completely legal business registered in the country that has nothing to do with offshores.
2. Enormous growth opportunities
The UK has become a major global financial centre and an enormous market for goods and services due to its unique location at the crossroads of maritime trade routes, and thanks to its historic background.
The centuries-old practices of interaction and regulation of the market makes the UK economy extremely resistant to crises and recessions.
All these factors won the country a deserved place in the top five most attractive investment destinations of the world. Therefore, any business based on a unique and viable idea has a better chance of success on the UK shores than anywhere else.
3. Tax optimisation in the UK
The UK tax legislation is not a mild one, although the British Isles have one of the lowest corporation tax rates in Europe. On the other hand, the strictness is compensated by tax allowances and deductions provided by the government that is interested in the growth of small and medium-sized businesses and, consequently, the increase in budget revenues.
However, even if you can’t apply for allowances, there are still loopholes in UK corporation and tax law to optimise your tax burden. For example, you can choose such legal form for your company that would allow you not to pay tax on foreign profits.
If you want to take full advantage of corporation tax reduction opportunities, you should do your tax planning before your application to register a company is submitted to the Companies House. At this stage, you will need advice of an experienced advisor who knows UK legislation.
4. Government support for businesses
We want to underline once again that the UK government does not rely only on tax revenues from large corporations and historically strong industries. It stimulates private initiatives and small business development by all available means.
In order to develop entrepreneurship in the UK:
- The government makes opening a new business as easy as possible by making the process of incorporation in the UK quick, simple and, if you wish, it can be done remotely;
- There is limited government interference in private companies’ affairs, making it easier to do business, even in a highly competitive environment;
- Government support schemes are introduced to support businesses and even fund entire projects.
It should be pointed out that the UK judicial system in fact is not dependent on the government, so a legally competent entrepreneur can expect a fair verdict, no matter what case is processed in the courtroom.
5. High level of economic and cultural development
If you open a company in the UK, you will have access to a developed, modern infrastructure. Business experience gained in the UK will stay with you forever and be highly valued in other countries. And if you need help, you can always count on excellent professional skills of UK workforce.
What Types of Company Can Be Registered in the UK?
Among all available options, the four legal forms best suited to the business objectives are usually chosen. Here is a brief description of the types of these companies:
1. Limited Liability Company (LTD) is a company limited by shares or a guarantee.
This type of company is completely independent of its owners and is liable for its obligations by the amount of its share capital, which can be £1. Owners are only liable for debts of a company up to the amount of their share in the share capital or by a guarantee.
2. Public Liability Company (PLC)
It is a more prestigious type of company which is usually chosen by large business entities. Such company can trade its shares on the stock market. Shareholders are only liable for the company’s liabilities with the funds which are spent on the purchase of shares in the public liability company.
3. Limited Liability Partnership (LLP)
This type of company does not pay corporation tax. Partners in the partnership have to report and pay tax on the distributed income. An LLP can own assets such as real estate and capital assets. The liability of partners is limited to the amount contributed during the incorporation of the partnership.
4. Scottish Limited Partnership (SLP)
This type of company must be registered in Scotland’s capital. A Scottish Limited Partnership (SLP) is similar to a Limited Liability Partnership (LLP) in basic terms such as independence, ownership of assets and corporation tax. If an SLP does not carry out its business in the UK, no annual accounts need to be prepared and filed. In a Scottish Limited Partnership, there are two types of partner; general partners participate in the management and therefore are liable for the partnership’s obligations with all their assets; limited partners do not participate in the management of the company and therefore their liability is limited to their contribution to the partnership.
Why Does a UK Business Need Legal Support?
The UK law differs considerably from continental Europe. On the one hand, it can create certain difficulties for UK start-up entrepreneurs. On the other hand, if you do everything according to the established rules from the beginning, your commercial activities will not be spoilt by either fines or court proceedings.
Based on a wealth of practical experience, Imperial & Legal have prepared three packages for those who are planning to open a company in the UK: Standard, Standard Plus and Imperial.
If you open a dormant company or need support at document preparation and business registration stages, choose a Standard package.
A Standard Plus package includes an English-speaking secretary taking calls, messages and emailing summaries to you. This offer also includes a correspondence address in the UK and a business telephone number.
A package is the best choice for more serious business people because it will help you open a UK bank account, register your company for VAT and support at least two of your employees to obtain business visas.
A range of tasks taken care is not limited to the packages listed above. If it is necessary, you will get professional advice on tax optimisation, annual reporting, accounting and moving to the UK.