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Why UK?

The United Kingdom is considered as Europe’s leading business centre.

UK is an attractive business centre & knowledge centre offering world-class skills, research and development in cutting edge technologies, telecoms, e-business, software, industrial design, biotechnology, life & physical sciences.

The political, economical and social stability has fostered the skills and productivity of the private sector to ensure a progressive growth in the country.

An archipelago located off the North Western Coast of Europe between the Atlantic Ocean and the North Sea.

Population
population
64.1 million
Currency
population
Pounds Sterling (GBP)
GNI Per Capita
population
US$ 37,780
Region
population
Europe
Political Overview
population
Unitary State, Constitutional Monarchy

Fiscal Advantages

  • Ranks 4th in the world for Ease of Doing Business
  • Incorporation of a new company is usually formed on the same day
  • Corporation tax on businesses is presently at 21% and will be reduced to 20% from April 2015
  • Simplified tax environment for holding companies of foreign subsidiaries
  • Extensive range of capital allowances that allow the costs of capital assets to be written off against taxable profits


Regulatory Advantages

  • Well established and a respected jurisdiction to conduct business
  • Flexible labour markets in Europe
  • Stable political environment to do business
  • The largest network of double taxation treaties for relief of double taxation across the globe
  • Shareholders / Partners are provided limited liability in Limited Liability Company / Limited Liability Partnerships.
  • There are no foreign exchange controls


Limitations

  • Foreign ownership is limited in few key strategic privatised companies
  • Certain sensitive service activities require additional licensing and governmental approvals and checks

Company Formation

  • Private Limited Liability Company
  • Public Limited Company
  • Sole Trader
  • Partnership
  • Limited Liability Partnership
  • Branches


Limited company is a separate legal entity with its own limited liabilities. Offers more flexibility to ownership compared to an establishment. It is much more substantial compared to a Branch, offering greater assurance to those who are in contact with their business. 

Private LLC should have at least one director. They need to maintain registers of members, charges, directors and company secretaries etc. Auditors need to be appointed unless they have a turnover below the thresholds specified. 

Limited Liability Partnership is a legal entity with a flexible organisational structure. 

A branch is a part of its overseas parent company and therefore does not have limited liability in its own right.

Public companies must include the words “public limited company” or “plc” as an integral part of the company name. Businesses can be conducted as partnerships, sole traders or any other. 

Under the Companies Act 2006, a company is deemed to have unlimited capacity but if specific objects are stated in the articles of association, these will be treated as a limitation on the company’s capacity. 

The registration procedure takes about 10 days from submission of documents to incorporation. Same day incorporation is also available on additional costs.

  • Memorandum & Articles of association
  • Name of the company
  • Details of a director
  • Address of registered office

Taxation, Laws & Regulations

  • Capital duty, capital acquisitions and payroll taxes are not levied
  • Stamp duty is levied at 0.5% rate, payable by the transferee, applies on the transfer of UK shares
  • Withholding taxes are not levied usually, although a 20% withholding tax generally applies to distributions paid by a Real Estate Investment Trusts (REIT) from its tax-exempt rental profits
  • Interest paid to a non-resident is subject to a 20% withholding tax, unless the rate is reduced under a tax treaty or the interest is exempt under the EU interest and royalties directive
  • Standard VAT rate is 20%, with a reduced rate of 5% and 0% for certain items
  • Income tax is charged at progressive rates, from 20% up to 45%
  • Capital gains tax rate ranges from 18% to 28%
  • Social Security, National Insurance contributions (NIC), varies
  • Royalties paid to a non-resident are subject to a 20% withholding tax, unless the rate is reduced under a tax treaty or the royalties are exempt under the EU interest and royalties directive
  • Corporate tax rate is at 21%, will reduce to 20% in April 2015. UK resident companies are subject to corporation tax based on its worldwide profits, income and chargeable gains with credit given from most overseas taxes paid
  • A non-resident company is subject to tax only with respect to UK profits, which include the income of a permanent establishment in UK, Real estate in UK, certain UK source interest income and gains on assets used for purposes of a PE’s trade
  • UK offers a participation exemption for dividends and certain capital gains. It has group relief, transfer pricing, thin capitalisation and controlled foreign company rules. It also has an extensive network of tax treaties that aim to eliminate double taxation
  • A Patent box regime has been phased-in from April 1st 2013 that will allow companies to elect to apply an effective 10% rate of corporation tax to all profits attributable to qualifying patents and certain other innovations, whether paid separately as royalties or embedded in the sales price of products

Foreign companies need to register with Companies House, for doing business in UK. Within 30 days of establishing, a foreign limited liability company must file various particulars and documents that can be viewed by the public, such as the names and addresses in the UK, of persons authorised to accept legal notices served by the authorities; the name of the company, its legal form, its country of registration, company number, details of its directors and secretary and the address of the UK establishment, date of its establishment and its business. 

Legislations governing mergers is contained in the Enterprise Act 2002 with other relevant provisions in the Companies Regulations 2007.

UK operates a self-assessment regime. Large companies pay tax in quarterly instalments starting in the 7th month of their financial year. The tax return is due to be filed within 12 months of the period end. It is mandatory to file tax returns, online.

Immigration & Visa Requirements

Nationals of countries in the European Economic Area (EEA) and Switzerland are free to live and work in the UK without a visa. If it’s a short business visit, a formal permission is required for most other people. 

Work immigration categories such as Tier-1 Investor and Tier-1 Entrepreneur require you to have access to significant amounts of money either in your own name or, in the case of Tier-1 Entrepreneur, in a third party’s name, as long as it is available to invest in a UK business. 

If you are a non-EEA and Switzerland foreign national but have a spouse or partner who is an EU national you may be able to apply to enter the UK using the European regulations. For the application to be successful, your EU spouse or partner must live in the UK at the same time as you.

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