How to Set Up an Offshore Company in the UK as a Non-Resident

Ryan Patrick

• 5 min read
How to Set Up an Offshore Company in the UK as a Non-Resident

Although the United Kingdom has never declared itself as an offshore jurisdiction, it doesn't mean it hasn't attracted savvy entrepreneurs who take advantage of its available legislation. According to a report by US News and World Report, the UK is one of the best countries that encourages and promotes entrepreneurs.

Before starting an offshore company in the UK, it is vital to consider the process from your company structure jurisdiction to tax liabilities. This blog navigates through all the nitty gritty of setting up an offshore company in the UK.

What's an Offshore Company?

An offshore company is incorporated away from the investors' country and region of its operation and offices. The firm operates outside the country of its formation. These offshore jurisdictions offer extensive benefits to business owners looking for less stringent regulations. Setting up an offshore business will help you achieve business goals and grow your assets.

Why Set up an Offshore Company in the UK

Incorporating an offshore company has ton of benefits

Tax Treaty Network

What attracts most business owners in the UK is to set up offshore businesses if the UK has the largest network of double treaties. With a global tax treaty network of over 100 countries, UK companies efficiently minimise retained taxes on dividends received. Additionally, setting up an offshore company is straightforward.

Low Maintenance Cost in the UK

Compared to other jurisdictions like New Zealand and Norway, the cost of maintaining a company in the UK is lower. The UK also offers a competitive reputation, protection and international respectability.

Audit Accounts

If you meet these, there will be no audit requirements to incorporate an offshore company.

  • A turnover below £1,000,000
  • If you have a net asset lower than £1,400,000 unless the business you're setting up is part of a large group

Share Capital

If you're interested in setting up an offshore company in the UK, you will be happy to know there are no minimum share capital requirements or capital tax on authorised shares.

Ease Establishment

Did you know you can set up an offshore company in the UK in 24 hours? Check out the off-the-shelf companies that align with your business, design it with your specific requirements, and start.

International Respectability

With a UK company, you can acquire assets in foreign locations and minimise property dispossession risks by foreign governments.

Which Type of Business can you Set Up in the UK as a Non-Resident?

You can choose from various types of businesses available in the UK as long as it fits your business structure. There are three primary business structures that business savvy choose from when moving offshore. Here are businesses to choose from:

Private limited company

Here are the features of an offshore private limited company in the UK

  • This a privately held company
  • It cannot have more than 50 shareholders
  • Shareholders cannot participate in public share trading
  • It offers limited liability to shareholders
  • You're able to enter into contracts and acquire assets
  • It can sue or get sued under its name
  • Revenue earned outside the jurisdiction of incorporation enjoys lower tax rates and possible tax exemption.
  • Stringent reporting requirements

International Business Company (IBC)

The company should have one director and one shareholder, although it can be the same individual.

  • Speedy incorporation process
  • If the business is not in the territory of incorporation, there are possible tax exceptions or low tax rates.
  • Offer corporation banking and privacy
  • Minimal reporting requirements
  • Can engage in abroad business activities like investments and trade

Limited liability company

  • LLC only has members
  • The company should have at least one member
  • Minimal reporting requirements
  • Members are protected from the company's debts or liabilities incurred

How to Set Up an Offshore Company in the UK

If you wish to set up an offshore company, follow these steps

Most non-UK residents must have a work visa before setting up a business in the UK. Apply it beforehand to help you know if your business will thrive in the long term.

2. Come up with a trade name

Start by deciding the trade name for your business. Ensure the business is original and has a suffix like limited, corporation, corp, Ld, etc. Your company name is the face of your business, so ensure you decide accordingly. Have a few alternatives, and the final name you pick ensures its uniqueness from your market competitors.

3. Contact business expert

After picking a trade name, contact a certified business expert. These professionals are vital when setting up an offshore account, since they are well-versed in all legal proceedings in the business field.

4. Keep your company records ready

When opening an offshore business, ensure you have these documents

  • A copy of your passport
  • Names of all directors
  • Share capital and shareholders' details
  • Registration fee
  • Completed IN01 form
  • The name and registered address of the business
  • Company memorandum and articles of association

5. Submit documents for verification

Once your documents are in place, submit them to the respective authorities for verification. For tax purposes, you must register your company with the HMRC. If your documents get approved, pay the relevant fee. If your file needs rectification, contact your business consultant to edit the errors and submit them again.

6. Open an offshore bank account

In the final stage, you must open a bank account for your company's business transactions. The account will help you carry out your business with several benefits, proving to be a profitable investment decision. However, you need a business expert to help you with guidance to avoid facing challenges on the way.

Do You Need Help Forming Your Company or Getting Your Bank Account?

Incorpuk offers a range of fast and efficient online company formation services, allowing you to register your company quickly. Kindly contact incorpuk if you need any help on company formation services today.

Advantages of Setting Up an Offshore Company in the UK

Here are some advantages of offshore companies:

Privacy

You will enjoy confidentiality and privacy when you set up an offshore business to conduct its operations. This is because many financial centers do not disclose the individuals involved in the offshore industry unless it is mandated for criminal investigations.

Asset Protection

When you place your assets in offshore corporations or overseas legal structures, it offers them protection. It makes it hard for anyone to search them via asset search if they are in your offshore corporation. This hides your investments and finances from the public view, thus providing sturdy asset protection.

When pursuing legal measures, there can be an asset search that shows you can cover any financial adverse judgments against you. Putting your assets under the ownership of your entity ensures they aren't linked directly to you. You can lawfully protect your assets from legal adversaries with an offshore company.

Disadvantages of Offshore Companies

Here are some disadvantages of offshore companies you need to know:

Proof of Ownership

Proving ownership of your offshore business can be tricky because of the lack of a public register you can refer to. If something happens and you must prove you are the entity shareholder, the anonymity way of registering the offshore company can be a considerable disadvantage.

The Offshore Money is Subject to be Taxed in the Resident Country

Assets and income of an offshore entity set up are distributed according to taxation policies. Although the initial tax advantages of an offshore company are favourable, the funds will be liable for taxation once they are brought into the country of residence.

Conclusion

Setting up an offshore company in the UK can lead your entity to success. But you should consider every aspect, from the company structure and local jurisdiction to taxation policies. Also, it's okay to contact business experts to help you prepare files and offer you guidance in your offshore company set-up. Goodluck!