UK vs US for Company Formation: Where Should You Incorporate a Company as a Foreigner?

You must conduct thorough research when incorporating your company in any country as a foreigner. It's a process that involves taxes, possibilities, and complex challenges. You must follow strict financial rules due to economic changes, global market shifts, and handling taxes.

Are you yet to decide between the UK and the US, which is the best place to incorporate your company as a foreigner? Remember, each country has its set of regulations, benefits, and difficulties. This guide will provide information to help you determine which country is best for you to incorporate a company.

Factors to Consider Before Incorporating a Company in a Foreign Jurisdiction

There are factors to consider before you decide to incorporate a business in a certain country. You should compare factors between the US and the UK to help you make an informed choice. Consider these:

• How much does it cost to incorporate a company in each country
• The time it takes to form a company in each country
• The cost of maintaining the company annually
• What are the tax rates in each country
• Does stock transfer taxes apply
• Can you incorporate and operate your company online
• Do special conditions apply when starting a company in each of these countries as a foreigner
• Is it easy to do business in these countries
• Is it easy to grow a company in these countries
• Which market will you access when operating a company in each country?

Incorporating a Company in the UK as a Foreigner

The process of incorporating a company in the UK is easy. You need a registered address for your business in the UK. Service providers like accountants and lawyers can provide you with a company address for free.

The cost of registering a company in the UK starts from £50, which you can easily pay through a credit or debit card. The incorporation process is also seamless since it takes 24 hours to register a limited company in the UK. Register your company through UK Companies House online or use a company incorporation agent. You can also use third-party software from your company, but this method may take longer.

Can you Incorporate a Business Online in the UK?

You can incorporate a limited company online. This makes it easy to run a company as a UK foreigner. You can register your company in the UK through IncorpUK and after registration, you will receive the incorporation documents which include Incorporation certificate, Company Register, First Board Minutes, Share Certificate, Articles and Memorandum of Association, among others.

Incorporating a Company in the USA as a Foreigner

Company incorporation process in the US may vary from state to state depending on whether you register a corporation or an LLC. In this case, let's use Delaware as our example. You can register an LLC company unless you're from restricted countries like Cuba, North Korea, Iran, and Syria. You can use the help of a local agent who will act as your representative so you don't have to travel there. Just like in the UK, you need a local registered address for registration. You can also get the address from your agent.

The cost of registering a company starts from $80, which is higher than in the UK. The amount covers registering a company, but you must pay more if you want it expedited within 24 hours. Remember, the cost of registering for an LLC differs from other types of businesses. You can make this non-refundable payment online via American Express, Visa, or Discover card.

Registering a company as an LLC in Delaware takes between 5 and 15 working days. You must also file for certification of incorporation or formation of your business, which takes up to 14 days. You will pay an additional fee if you want the process completed within 24 hours.

Can One Register a Business Online in Delaware?

You can register a company online in Delaware as a foreigner on Foundeck. You may reserve a company name, pay for the required certification, or submit your incorporation certificate on this website. Unfortunately, you cannot hire a local agent service on this online platform or open a local bank account. You need a member of the LLC to go to a local bank and open an account.

Key Features of Incorporating a Company in the UK vs the US

Comparing the UK and the US, the UK is the ideal place to incorporate a company; the registration fee is more affordable, and registration takes less time compared with the US.

Other factors to consider when incorporating a company in the UK vs the US include:

Different Costs

Start by considering the US dollar or pound exchange rate and gauge which will be more profitable. Tax rates vary from state to state, so you must thoroughly research the state where you will incorporate your company. For example, states like Wyoming don't charge corporate charges but states like Delaware charge 8.70%. You must also consider looking into the UK's federal corporate tax, which is 19%, and 21% in the US, which is slightly higher.

The Market

Whether selling goods or services, look into how quickly you can enter the country's marketplace. For example, you can quickly enter online marketplaces like eBay or Amazon in the UK or wallmart.com or overstock.com in the US.

Wrapping Up

Deciding where to incorporate your company as a foreigner involves thoroughly evaluating various factors. While the UK and the US offer opportunities, the UK stands out with its lower registration costs and quicker processing times. Considerations such as exchange rates, tax rates, and market accessibility should guide your decision. You can register a UK company an online agent. Whether navigating the streamlined process in the UK or adhering to the varying state regulations in the US, a well-informed choice ensures a smoother journey in the dynamic landscape of international business.

FAQs

Is it better to start a business in the US or UK?

The UK and US offers a great opportunity to start or expand a business thanks to its compliance, set-up cost, and scaling. It boils down to your preference between starting a Limited company in the UK or starting an LLC or C Corp in the US.