Can a Non-UK Resident Start a UK Company?

Setting up a UK Company

So can an overseas resident start a UK company? The simple answer is yes!

Lots overseas residents look to create a UK company for many different reasons; a wider access to global markets, trading with other UK companies, just to name a few. The UK offers multiple services that allow overseas residents to incorporate a UK registered company with Companies House, through agents and online services. Additionally, starting a company in the UK can grant access to tax incentives, international investment opportunities, and a way of building a reputation.

What are the Key Requirements for a non-UK resident?

There are certain requirements for overseas residents wishing to start a business in the UK, the director of the company must comply with these standards in order to successfully incorporate as a UK company:

UK Registered Office

The company must have a physical correspondence address in the UK (in England, Wales, Scotland or Northern Ireland). Although your personal residence can be abroad a physical UK registered address is required, which can be issued by the incorporation agent or an accountant etc. This address will be visible on the Companies House register once incorporated. – We also offer registered address packages if you incorporate through our software!

Company Incorporation

The company must be incorporated and registered with Companies House in order to be a UK company. Where the process can easily be done online through formation agents.

Directors/ Shareholders

There are no limitations on the director’s or shareholder’s country of residence or nationality. Even the company’s service address (where the company operates from) can be located outside of the UK.

Why Start a Company in the UK?

There are many benefits and reasons why a overseas resident might want to form a company within the UK, including some of the following:

A strong reputation and credibility - The legal and financial systems in the UK are known for being stable and reputable. Choosing a UK company incorporation, would help broaden the scope of trade with other UK companies, as well as gaining access to international markets, specifically European ones.

Limited Liability protection - Incorporating a UK company gains access to limited liability protection that a company otherwise would not receive if incorporated overseas. This is a form of legal protection that prevents the shareholders and/or directors being held personally responsible for debts and financial losses.

Tax efficiency - Limited companies in the UK benefit from low corporation tax rates (small profit rates being 19% and main rate of 25%), specifically when compared to taxes for a sole-trader. The UK has many tax-treaties with other countries meaning that it reduces the risk of the company being taxed twice on foreign income received.

Overall the ease of incorporating a company in the UK whilst still living and operating overseas makes it an attractive option for business directors.

Can an overseas company become a UK company?

Currently, companies already registered with overseas countries are not able to move the registration to the UK. In the UK, “Re-domiciliation” (the process whereby a company changes the place of incorporation between jurisdictions) is not available for any overseas companies. Although this is the case, there are different ways that overseas companies deal with this who want to trade or be registered in the UK:

Incorporating a UK subsidiary – A way to deal with this is overseas registered companies will sometimes incorporate a subsidiary company with a UK registered address. Then the parent company can either transfer the business to the subsidiary, or use it to trade with.
Forming a partnership with a UK company – Another way is for the overseas company to form a Limited Liability Partnership (LLP) with a UK one, this way both UK and overseas company can act as corporate members of the LLP. A benefit of partnering with a UK company is that the overseas company can conduct business in the UK through the partnership.

Will a non-UK director still be required to submit a Self-Assessment return?

Some non-UK directors of UK companies may still be required to fill in a Self Assessment return, depending on the benefits they receive from the company. The Self Assessment return must be completed, to be compliant with HMRC, if the director receives any of the following ingoing's:

Director's loan from the company
Dividend payments
A UK salary
Reimbursed expenses

If the UK income is untaxed then it must be declared with HMRC to remain compliant and avoid any unnecessary penalties. However, if the income received is taxed through PAYE then a non-UK director may not need to register for Self Assessment. If you are unsure whether you are required to submit the Self Assessment, it would be best to seek professional tax guidance or contact HMRC directly.

Incorporating as a Non-UK resident through us:

Through our software, we allow for individuals or entities from outside the UK territory to incorporate a UK company.

We offer a registered address package which allows you to use our City of London office as the company's UK service address, which is a key requirement for a non-UK resident. If purchased, all mail from HMRC, Companies House and other government bodies would be sent to our office to be processed and uploaded for the director to view.

AML and Identity Verification

When incorporating through us, as with any company incorporation company, we would require both a proof of identity, which can be a passport or driving license, and a proof of address, which could be a utility bill or a bank statement, as part of AML (Anti-Money Laundering) checks for the director(s) of the company. If you are a non-UK director we may need to conduct an enhanced verification check, to see if all of the legal requirements are met before processing the submission to Companies House.

Main Takeaways

Overseas residents can start a business in the UK so long as they incorporate with a registered service address located in the UK.
When incorporating the company, the non-UK director will be subject to AML checks to verify their identity.
Once the UK business has started trading and depending on how the UK income the director receives is taxed, they may have to complete a Self-Assessment return.