United Kingdom

Description

The United Kingdom is a member state of the EU and has one of the most advanced economies in the world. Companies registered in the UK are widely recognised internationally, and it is important to stress that the clear rules of the Anglo-Saxon legal system make it easy to operate companies. The two most common corporate forms are the Private Limited Company and Limited Liability Company, the latter often being mentioned as an alternative to registering offshore companies to which different company law and taxation regulations apply.

A Private Limited Company is required to pay corporate tax on its profit. The applicable general corporate tax rate is 20%. In addition, 21% (20% from 2015) must be paid on any profit above GBP 1,500,000. The equity must be at least GBP 1. The company is only required to have one manager and one shareholder, who can also be foreign persons, but it is expedient to hire domestic persons to act as managing director in order to maintain tax residence. There are no restrictions on whether they should be legal entities or natural persons. The local court of registration keeps a record of the data of both the manager and the shareholder. The company must have a local address, which qualifies as its official seat. The company is entitled to transfer its official address to another country at any time, but this requires the approval of the tax authority. Companies are required to prepare a report on their operations, which must be provided, with certain exceptions, with an attestation clause by the auditor before being submitted to the local authority. It is important to note that the company report qualifies as public data.

A Limited Liability Partnership does not qualify as a taxable entity, so it does not have to pay corporate tax on its profit. An offshore company is considered to be “transparent” for taxation purposes, so any tax liability arises only for the income of the members, that is, only the owners must pay income tax on the profit. If the members are not domestic persons, no tax should be paid even on the profit of the business locally by owners either (provided that the profit does not come from the UK). At least two members are needed to set up a Limited Liability Partnership, both of whom have limited liability for the debts of the company. There is no upper limit on the number of members and it is also possible for another company to join in as a member. There is no minimum requirement for the equity of the business; moreover, the members do not need to pay up any money to the company bank account. Companies are required to prepare a report on their operations, which must be provided, with certain exceptions, with an attestation clause by the auditor before being submitted to the local authority. It is important to note that the company report qualifies as public data.

Regional features

  • Audit obligation: Yes
  • Continent: Europe
  • Disclosure of beneficial owners: No
  • EU VAT ID available: Yes
  • Local manager required: No
  • Minimum paid-up capital: GBP 1
  • Obligation to submit an annual report: Yes
  • Tax system: Preferential tax