- 20%Tax rate
- 24 hoursTime of establishment of the company
- NoneMinimum capital
The United Kingdom is a European country located two hours flight from Paris. The country can be used as a window to the world – it’s a location the skilful use of which allows to obtain a low and effective income tax rate. In addition, the UK has introduced the highest VAT exemption limit in the EU – up to approximately €90,000. The UK is the world’s largest financial centre with tens of thousands of foreign-controlled companies benefiting from high quality services, an advantageous tax system and a network of double taxation treaties. The UK can be a place for many types of business activities, while providing a good image of the company’s brand. The UK is not a typical tax haven, but thanks to our expertise, it can become one.
What to keep in mind
England offers an excellent image of a limited liability company.(LTD), great for all types of business. The choice of this jurisdiction depends on several factors. If the company is properly registered, you can enjoy a tax rate between 4% and 6% thanks to the Agency Agreement Law, which allows you to assign as much as 80%-90% of shares to a foreign parent company.
Great Britain is an exceptionally business-friendly country – opening a company is simple, cheap and fast. Opening a bank account, however, requires specialist knowledge and the status of an introducer at a bank based in the UK. It is advisable for the shareholder of the company to obtain the so-called NIN (national insurance number), which will significantly facilitate the process of opening an account.
Company registration procedure
Registration of the company
- The company is registered with Companies House.
- The whole procedure can be handled remotely or even independently by the shareholder of the company due to its simplicity;
- The register of companies house is public and available online – anyone can check the company’s documentation and submitted financial reports;
- Among the registration documents that make up the company’s documentation are the memorandum of association, articles of association, certificate of incorporation, which regulate the company’s internal status (MoA, AoA) and confirm its existence (CoI);
- It is worth taking care to obtain the Apostile clause for the above mentioned documents – this will allow their use in international trade.
Types of companies
LTD is usually established in the UK. This type of company assumes no liability of shareholders and directors for the company’s liabilities and is a UK tax resident. Consideration could be given to setting up a Limited Partnership, which is not taxed in the UK if it does not receive income from the UK. Such a company is not a UK tax resident because it is tax transparent.
There are no restrictions on the number of shareholders, however, a minimum of one shareholder is required to establish a company. Foreign shareholders are allowed. No obligation to hold an annual general meeting. A shareholder can be a natural person or a legal person – it is possible to use the services of trustees in order to hide the identity of the shareholders.
The Management Board:
At least one director must be appointed to carry out the board of directors. A shareholder may act as a director. Any change in the position of director must be reported to Companies House. Consider appointing nominated directors to the board of directors. Please note that a UK company should be managed and controlled in the UK in order to maintain its tax resident status in the UK.
The company must have a registered address in the UK – a transfer outside the UK will result in the dissolution of the company.
Time to set up a company:
The time to set up a company is approximately 24 hours.
No minimum capital requirements.
Taxes and finances
Corporate tax is 20%, but can be reduced to 4% through Agency Agreement Law. If a British corporation is 100% owned by a British foreign company, there is a right to attribute 95% (but in practice 80%) of the gross profits to a foreign company. The parent-subsidiary company system is derived from the “agency law”, which regulates the issue of agreements between agencies representing foreign companies.
The 2009 tax law reform introduced a tax exemption for dividends received by English holding companies, which makes the country as attractive in terms of optimization of passive income as the Netherlands, Cyprus and Malta.
One of the noteworthy benefits of having a company in the UK is in practice the tax exemption for directors’ remuneration in Poland. According to the provisions of the double taxation avoidance agreement between Poland and the United Kingdom, the income of directors of a company in the UK is exempt in Poland according to the exemption with progression method. Please note that this income will be taxed in the UK, but in the UK it provides for a much higher amount of tax-free income.
Accounting is obligatory but can be carried out in the formula of annual settlements. It is advisable to use the services of an accounting office, which can help you to prepare a report in accordance with local requirements.
Your company will have a multi-currency bank account with Internet access to your account, VISA or ATM MasterCard (there is a possibility of obtaining several cards). Please note that in order to open a bank account with a British bank you will need to appear in person at the branch. It is advisable to have a national insurance number (NIN). For foreign accounts (i.e. in banks outside the UK), the whole procedure can be carried out remotely.