If you’re from outside the UK and are considering setting up a UK company, you may feel daunted by the amount of work involved. Doing it at a distance can seem like an impossible task, but when you break it down, it’s entirely achievable. Here we’ll take a look at the steps you need to take to set up your own company in the UK as a non-UK resident as smoothly as possible.
Can a non-UK resident form in the UK?
It’s important to have the facts clear from the start: a non-UK resident can start a company in the UK. In many ways, there is no difference in the requirements to set up a company whether you reside within or outside the UK. However, there are some important elements to be aware of when starting a company, wherever you live. Get these elements right from the start and you’ll speed the process along and save yourself a host of difficulties in the long term.
Things to remember when forming: the steps
The first thing you’ll likely do is create a business plan. This can take some time, but once you’ve got that all sorted, and decided that a company is the best structure for your business, you’ll need to do the following steps to set up in the UK:
- Register the company name: every company must have a unique name — so be wary of choosing a name that’s too similar to a competitor’s business trading name. Use a tool like this to search for company names and check that what you are choosing is not already in use.
- Register a UK office address: the address you choose must be a physical address in the UK and must be in the same country which your company is registered in. This means that, for example, a company registered in England must have a registered office address in England. It is allowable to use a PO Box but you must still include a physical address and postcode. The company address will be publicly available on the online register.
- Register a director: there must be at least one person over 16 responsible for running the company — they do not have to be a UK resident.
- Issue shares in the company: if you choose to form a company limited by shares, there must be at least one shareholder. This can also be the director(s) or any number of people. You can set the initial value of the share.
- Create a ‘memorandum of association’: this is a legal statement signed by all initial shareholders agreeing to form the company and ‘articles of association’. These are written rules about running the company agreed by the shareholders, directors and the company secretary.
- Register as a limited company: you register online for a small fee, providing you have everything in the list above completed. There are organisations that can help you set up everything you need, and it’s also possible to register by post or in person or using an agent — though bear in mind that these ways are more expensive and can take longer.
- Register for corporation tax: it’s possible to register online for Corporation Tax and PAYE as an employer at the same time as registering your company. You must register for Corporation Tax within 3 months of starting to do business. What’s more, starting to do business means any actions such as buying, selling, advertising, renting a property or employing someone. Allow some time for the registration process this as you will need a Unique Tax Reference to be posted to your company address before you can complete registration.
- Tax return: you’ll also need to file and report the company’s tax return every year on the date specified. This information can be compiled by yourself or an accountant, but either way, it needs to be done whether the company makes a profit or not. Your tax return needs to go to the HMRC and Companies House too.
While these steps are relatively straightforward, albeit time-consuming, remember that you’ll also need a UK bank account for your company. This can be an onerous process, but a way around this is to register with a bank in your own country, or to form with an agent. You’re allowed to trade with a bank account from another country as long as you make it clear that this is what you’re doing. A UK bank account does, however, make trading easier. In the UK, some banks will require a company director to visit their premises to open an account, but not all require this. Opening an offshore account based in the Isle of Man is another option.
Forming your own company can be a time-consuming and difficult process, and there are a number of other steps involved you’ll need to consider to make sure you get it right. From registering as a limited company to getting your accounting in order, we can help with the whole process. If you’re interested in finding out more, just head over here for more information.