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Characteristics

GENERAL
Type of entity
Private Limited (LTD)
Type of law
Common
Shelf company availability
Yes
Our time to establish a new company
3 days
Minimum government fees (excluding taxation)
Not Applicable
Corporate Taxation
19%
3% with an agency agreement
Double taxation treaty access
Yes
SHARE CAPITAL OR EQUIVALENT
Standard currency GBP
GBP
Permitted currencies
Any
Minimum paid up
GBP 1
Usual authorised
GBP 1,000
DIRECTORS
Minimum number
One
Local required
No
Publicly accessible records
Yes
Location of meetings
Anywhere
SHAREHOLDERS
Minimum number
One
Publicly accessible records
Yes
Location of meetings
Anywhere
COMPANY SECRETARY
Required
No
Local or qualified
No
ACCOUNTS
Requirement to prepare
Yes
Audit requirements
Yes, but exemption for small companies
Requirement to file accounts
Yes
Publicly accessible accounts
Yes
OTHER
Requirement to file annual return
No
Change in domicile permitted
Yes

INTEREST OF THE JURISDICTION

Advantages of a company in UK

  • Minimum authorized capital is only 1 GBP

Main info

At first glance it seems harder to be more “onshore” that the United Kingdom. However, tax provisions and corporate structures of that jurisdiction attract close attention of major players in the business world. With more than 130 bilateral treaties, Britain has probably the best tax treaty network in the world. In addition, being in London a prime global investment hub, it presents the UK to appear as a good gateway to European markets.

The official name of the country is the United Kingdom of Great Britain and Northern Ireland. It is located on an island in the north-west of Europe and has an area of almost 244 thousand km². The population is about 63.4 million people. The UK is one of the largest and most powerful states in Europe. Its rich history and colonial past made it an important member of the international community.

UK is a parliamentary monarchy, and the head of state is the Queen. The monarch heads all branches of power, has the right to dissolve the parliament and appoint ministers. Parliament is the supreme body of legislative power, it consists of two chambers - the House of Lords and the House of Commons. Only the House of Commons is elected, as the House of Lords consists of Spiritual Lords, Temporal Lords and Lords of Appeal.

The executive power is exercised by the government, represented by the Cabinet of Ministers. The Prime Minister is appointed by the Queen among the members of the House of Commons.

The judicial system of Great Britain has a hierarchical structure. In this case, each part of the UK has its own peculiarities of the administrative structure, which affects the justice system.

So, there are general and special courts. Special courts include military, trade, church, and sea. The general courts are magistrate courts and county courts at the lowest level. They consider most of the civil suits. The highest courts include the Crown Court, the High Court, the Court of Appeal, the Supreme Court of England and Wales.

There is a system of common law in the UK, it based on a legal and judicial precedent. Norms of law are contained in separate regulatory legal acts, the system of law is not codified and its history goes back centuries. Some parts of the UK have their own peculiarities of the legal system, and Scotland generally maintained its legal system, which is a mixture of general and continental law.

Types of companies and incorporation procedure

Forms of doing business in the UK are diverse, they include companies, partnerships, individual entrepreneurship.

Most often, activities are carried out through companies, which are independent legal entities. The charter and a memorandum are required to create and further regulate their activities. They specify the name of the company, the location of the office registration, the main rules of the company's activities. Registration of legal entities is carried out at Companies House.

01. Private Company Limited by Shares

This is one of the most popular forms of doing business in the UK. The liability of shareholders is limited to the nominal value of the shares they own. Shareholders can be individuals and legal entities. The process of creating a limited liability company is very simple and doesn't take much time. A minimum of 1 shareholder and 1 director are required. There are no requirements for nationality or residence of the directors.

02. Public Limited Company

For creation a Public Limited Company, a minimum statutory capital of £ 50,000 is required, 25% of which must be paid at the time of registration. Two directors and a secretary are required. The advantage of Public Limited Company is that its shares can be traded on the stock exchange.

03. Limited Liability Partnership

Also businessmen may create various partnerships for the conduct of business in the UK. Their main advantages are limited liability of participants, tax transparency, convenient and flexible structure and management. A LLP member pays taxes only in the country in which he is a resident, which allows to optimize taxation as much as possible.

Taxation

  • Corporate tax rate in the UK is 19%. Until 2020, it is planned to reduce the rate to 17%. At the same time, a UK tax resident is a person registered in the UK, the management office must also be located in the country. Residents pay corporate income tax on their worldwide profits.

    Corporate income tax is also paid by non-residents from the source of profits in the UK.

    Taxes are not levied from dividends paid by British companies. When paying interest and royalties, agreements on avoidance of double taxation are generally applied.

  • Taxable income is calculated in accordance with the financial statements taking into account adjustments and deductions. Capital gains tax is paid from the profit from the sale of assets, and its rate coincides with the corporate tax rate. If the taxable profit is related to the use of patents, a reduced tax rate of 10% may apply.

  • Tax transparency of partnerships in the UK allows such partnerships to enjoy a virtually zero tax rate, since they are not an independent subject of taxation. This requires that the partners are not residents of the UK, and the company did not conduct activities in the country. In such cases, the tax is levied on the partners on an individual basis in the country in which they are residents.

  • The standard VAT rate is 20%, however, a reduced rate applies to some types of goods and services.

Banking system and economy overview

Economy UK is among the strongest in the world, occupying the second in Europe. The leading sector of the economy is the sphere of services. An important role is played by the financial sector and industry. Great Britain plays an important role in the world’s economy. This is facilitated by the colonial past, liberal economic policy and geopolitical position. As the center of the British Commonwealth, Britain has significant spheres of influence around the world.

The capital of Great Britain, London, is one of the largest world's financial centers of the world, and the British currency pound sterling is one of the most important and stable currencies worldwide. The banking sector of the UK is one of the oldest in the world and is characterized by a developed infrastructure, a high degree of concentration and specialization. The central bank of Great Britain is the Bank of England which is the banker of all other banks, carries out the external economic function and operates gold and exchange currency reserves.

HOW TO
PROCEED

To incorporate or purchase a company the following documentation should be provided:

01

A completed application form signed by the company or by the representative

03

A personal bill, which is less than 3 months old from the date of the application

02

Copy of valid passport

04

Payment of our fees

Note: additional documents may be required depending on the certain offshore bank.

Set-up time: From the moment, we are in possession of all required documents:

3 days

Incorporation of
a company or purchase
of an existing company

15 days

Delivery of the original
company documents

3 weeks

Offshore Bank: offshore
bank account opening