The COVID-19 pandemic has affected how everyone does business. Remote working has become a new normal, and many startup owners have decided to work away from their resident locations, to other parts of the world, including the UK.
It is important to know that a non-resident is allowed to incorporate a company in the UK. In most cases, the formation process and requirements to set up business are considerably similar between resident and non-resident companies. However, to successfully complete a UK company formation process as a non-resident, there are certain rules that are worth paying attention to.
Let’s dive into some basic information you will need.
Registered office address
Generally, you are not required to be a resident to start a company in the UK but your company must have a UK registered office address.
The registered office address will be publicly available for anyone to view on the Company House register.
In circumstances where the company uses a home address as a registered office, the company’s owner can ask Companies House to remove it from the register.
Business bank account
For non-residents who want to proceed with company formation in the UK, it is important to have a business bank account to separate company’s funds from personal finances.
In most cases, it is not necessary for your company to open a UK bank account since the application process may be challenging for non-resident.
It is always recommended that you take specialist advice on this matter to ensure better understanding of certain criterias involved in opening bank accounts when you are not resident in the UK.
There must be at least one director who is responsible for running the company and complying with requirements from the Companies House.
The company’s directors must be over 16 and do not have to be a UK resident.
Non-resident companies with an office or branch in the UK will only need to pay Corporation Tax on their UK-sourced income - they do not pay UK tax on their foreign income.
The UK-sourced income refers to the money that company makes from:
- doing business (‘trading profits’)
- selling assets (‘chargeable gains’)
Corporate tax return
You will need to file and report the company’s tax return every year by deadline - which is usually 12 months after the end of your accounting period. There will be a penalty for late filing if you miss this deadline.
The tax return must be filed with both government agencies which are HMRC (Her Majesty's Revenue and Customs) and the Companies House.
Note: The company’s tax return must be submitted online via Companies House portal. You can only submit tax return in paper form if either:
- You are unable to file via online portal because of reasonable excuses;
- You want to file your tax return in Welsh.
You must also fill in and submit an explanation of why you have used paper form instead of online submission.
Key things to remember!
Typically, there are not many differences in terms of company formation whether you reside within or outside the UK.
Some important elements to be aware of include:
- registered office address;
- business bank account;
- company’s director
- corporate taxes; and
- corporate return.
Non-resident companies need to understand each element to avoid any troubles in the long term.
The UK is considered one of the most ideal business destinations for entrepreneurs. If you are looking to incorporate your business in the UK, BBCIncorp is always available to assist you and provide the additional support you need.