Can I Form a UK Company as a Non-Resident?

Ryan Patrick

• 8 min read
Can I Form a UK Company as a Non-Resident?

Yes, you can form a UK company as a non-resident. Thousands of entrepreneurs globally are forming UK companies every year. This is because the UK offers a simple and cost-effective process to non-residents. However, at Incorpuk, we understand the process can be overwhelming when you're abroad.

That's why we have tailored packages that take care of that. This non-resident package is ideal for every entrepreneur outside the UK, regardless of where you are. So, if you want to form a company with a UK professional brand presence, you're in the right place.

This blog will discuss how to form a company in the UK as a non-resident and any other regulatory requirements.

Which Company Type is Ideal to Form for a UK Non-Resident?

You can register as a non-resident for several business types in the UK, like sole proprietorship and private liability companies.

A sole proprietorship is a more straightforward company to set up than a limited company, but both companies have legal advantages. For example, when you're a sole trader, you can run a business globally under your name without establishing a separate business in every country. In contrast, the Private limited company allows you to share legal liabilities.

What is the Credibility and Reputation of the UK Limited Company?

The United Kingdom's stable economic environment, transparent business regulations, and sturdy legal system make UK-limited companies perceived as more reliable and attractive for investment.

A UK-based limited company can offer credibility and trust, which is beneficial for establishing relationships, partnerships, and other companies. As a non-resident, it can also ease international trade, attract investors, and enhance access to global markets.

Furthermore, owning a UK limited company may signal a commitment to ethical business practices, financial transparency, and legal compliance, further enhancing its international appeal in the business world.

Forming a UK Company as a Non-Resident?

When incorporating a private company in the UK, you must register it as limited by guarantee or by shares in one of these three jurisdictions:

  1. England and Wales
  2. Scotland
  3. Northern Ireland

The jurisdiction that you select during the company formation will determine the location of your company's registered office. This address is the official location of your company, and you can run your business from anywhere in the UK and abroad.

At Incorpuk, we've simplified the company formation process for any non-resident interested in owning a UK company. We have an all-inclusive limited company formation package for United Kingdom non-residents at  £180 plus VAT.

Our non-UK residents' package offers:

  1. Certificate of incorporation
  2. 1-year registered office address
  3. 1-year director service address
  4. Printed share certificate
  5. Memorandum and articles of association
  6. Free Scan and email service
  7. A free electronic company assistant
  8. US, UK business bank accounts guidelines
  9. Lifetime support and assistance
  10. Startup perks and bonuses from our partners

Steps for Forming a UK Non-Resident Company

After creating your business plan and everything is into place, you must provide this information on your application form:

  1. Company name: one of the requirements when naming your company, you must be unique. Ensure your business name isn't similar to your competitors.
  2. Registered office address: the registered office address should be a physical address in the UK in the jurisdiction where you registered your company.
  3. Directors details: you should provide a director's name. Remember, they must be over 16 years old and responsible for running a UK company. The director mustn't be a UK resident.
  4. Company secretary details: you must also provide the company secretary's information.
  5. Your company's principal business activity's description (SIC codes)
  6. Service address: you must include the service address for every director, a person with significant control, and each subscriber
  7. Statement of capital

You can complete the company application form online and submit it to the Companies House for approval. The online application takes around six hours to process, meaning you can form a company and start trading on the same day.

Which Documents will You Receive after a UK Company as a Non-Resident?

You will receive numerous vital documents after Companies House approves your application to form a new company in the UK. Among the documents that you will get include:

  1. Certificate of incorporation: The Companies House will issue you a certificate of incorporation after your company is registered. This document has a unique company registration number and the incorporation date. According to the Companies Act of 2006, once the certificate is issued, it's conclusive evidence that a company is legally established.
  2. Memorandum of association (MOA): each subscriber declares their intentions to register in a company. For a company limited by shares, every member must agree to hold at least one share and be listed in the company's memorandum of association
  3. Articles of Association (AOA): This document outlines the law and order governing how a business should function. It outlines:
  • the shareholders' rights,
  • the appointment procedure
  • dismissal
  • dividend payment
  • corporate executive authority

It doesn't end there; after the company's incorporation process, you will also receive other documents, such as

  1. Unique taxpayer reference number (UTR): a few weeks after company formation, the HMRC will issue you a unique taxpayer reference number. The UTR consists of ten digits; it will be noted at the top of a letter sent to your company-registered office address.
  2. Authentication code: Companies House provides a 6-digit alphanumeric authentication code—the code functions as a digital corporate officer signature that you use to authorise information submitted online.

Benefits of Forming a Non-Resident UK company

UK limited companies offer significant benefits to residents and non-residents than other business structures, such as partnerships and sole traders. The primary benefit is limited liability, where a company is separated from the owners.

Let's look at more benefits of registering a UK limited company as a non-resident:

  1. Global market access: the UK's status as a leading global hub allows non-residents to connect with international market customers and partners.
  2. Tax efficiency: As a non-resident company, you may enjoy tax benefits and incentives, such as certain UK tax exemptions.
  3. UK market access: Registering and operating a limited company in the UK allows non-residents to tap into the massive UK market.
  4. Asset protection: a non-resident company will benefit from the United Kingdom's legal protection of specific assets like intellectual property.
  5. International banking: Non-resident companies access reputable UK banks, simplifying international transaction processes.
  6. Legal framework: the UK's robust legal framework and corporate regulations provide businesses with the clarity and stability needed for success.
  7. Access to funding: if you're an established UK company, it will be easier to secure investment from lenders and investors
  8. Ease of operation: establishing and operating a UK limited company is simplified by the country's excellent transport and communication infrastructure, access to professional and business services, and the availability of a highly skilled workforce.

Disadvantages of Forming a Non-Resident UK Company

Registering a UK non-resident company has a few drawbacks, including:

1. Business bank account for your non-resident company

Getting a business bank account as a non-UK resident is quite challenging. Most physical banks do not issue business bank accounts for non-residents. You can use virtual banks like  the Wise or Tide to operate your non-resident business.

2. It's challenging to run a business from overseas.

When operating a business remotely from abroad, you will experience many problems, such as time zone differences, language barriers, costly phone calls, and posting stock.

3. Tax implications

As a director, you may be required to pay tax twice for your company in a single accounting year, one in your country of residence and the UK.

Taxation for Non-Residents with UK Limited Company

When you own a UK company as a non-resident, taxation can be intricate based on factors such as the company's business operations and the individual's tax residency status. Whether non-resident-owned or resident-owned, they are subjected to a 25% corporation tax on all their profits. Several other tax treaties might be between the UK and other countries, alleviating or eliminating double taxation.

You should also know company directors and members who receive dividends and salaries must pay for the income tax. Your income tax depends on whether there's a double tax arrangement between your country of residence and the UK.

As a non-resident company owner, you must know about these other taxes:

  1. Value-added tax (VAT): this type of sales tax must be collected and paid if a limited company surpasses the VAT threshold. The residents must adhere to UK VAT regulations just as residents do.
  2. Non-resident landlord scheme (NLRS): if you're leasing out a property in the UK as a resident, you must adhere to the non-resident landlord scheme. The NLRS levies a tax on UK income for individuals whose ” usual place of abode" is not in the UK.
  3. Capital Gains Tax (CGT): As a non-resident, you may be required to pay CGT if you sell assets like real estate and land in the UK.

Due to the complexities of a company for non-residents, it's advisable to consult a professional tax advisor who is well-versed in your country of residence's tax regulations and UK tax laws.

Limited liability and legal protections offer numerous advantages for UK companies that are resident-owned and non-resident-owned. Non-resident directors and members have the same limited liability and legal protection as UK residents.

Limited liability means if your company faces difficulties, your personal assets and your shareholders won't be at risk beyond the money you've invested. This means your liability is limited to the extent of what you've invested in your limited company.

Limited liability offers a crucial financial safety net, reducing personal risks and encouraging investment; shareholders and entrepreneurs can focus on company growth without worrying about significant economic consequences if the company gets into a problem.

Why should a Non-Resident Form a Company in the UK?

We've looked at numerous reasons why registering a company in the UK as a non-resident is ideal. However, another primary reason you should consider is access to the European and UK market.

The UK has almost 70 million people and is a critical international trading power offering an open, dynamic, diverse marketplace. Its proximity to Europe grants access to lucrative markets within the EU. Despite Brexit, the" Trade and Cooperation Agreement" between the UK and the EU ensures that UK companies can still access the EU markets.

Why use a UK Company Formation Agency to Register your Company as a Non-Resident?

A company formation agency plays a significant role in streamlining the process of forming a company in the UK as a non-resident. A company formation agency like Incorpuk helps you in registering a UK limited company on your behalf and also offers:

  1. Advice on UK business structures
  2. A physical registered UK address (note that you must provide a physical address when registering for a UK limited company)
  3. Introduce you to a UK accountant
  4. Help you open a physical UK business bank account
  5. Help you register for PAYE and VAT
  6. Access an online portal containing your limited company information
  7. Comprehensive business services to ensure your new company stays compliant

Form Your Company with Incorpuk Today

At Incorpuk, we will help you through the company formation process and file your confirmation statements to help your business stay compliant. Whether you're a UK resident or a non-UK resident, our team is ready to provide guidance and help you establish your company in the UK. Contact us here today.

Winding Up

The UK removed many barriers that hindered non-resident entrepreneurs from registering and operating businesses in the UK from overseas. Forming a business in the UK allows you to benefit from UK business expertise, world-class infrastructure, a stable legal and political system, and a sound economy.

To enter this thriving market, you need professional advice as a non-resident before setting up a UK company to ensure compliance with UK tax and laws.