The UK has a strong tradition of attracting international businesses which are expanding their operations or want a footprint in Europe. The UK has the most extensive tax treaty network in the world. Over recent years, the main corporate tax rate has been reduced significantly.
The UK holds a number of other key attractions for those who wish to establish businesses, among them:
- No withholding tax on dividends, irrespective of where the shareholder is resident;
- UK tax exemption on qualifying foreign dividends;
- Capital gains exemption where a UK resident company sells shares, if certain conditions apply;
- A corporation tax rate of 19% with further rate reductions scheduled;
- Double tax relief for foreign tax paid on dividends.
UK Key Facts
24 hours (premium fee applies) or 5-6 working days (standard incorporation procedure)
Authorised Share Capital:
Unlimited and no restriction on currency
Issued Share Capital
- Minimum paid up share capital = £1
- No restriction on currency
- No capital tax on issued share capital
- Minimum number of directors: 1
- Individual director required although corporate directors are currently permitted
- No restrictions on residence or nationality
- Not obligatory
- No restrictions on residence or nationality
- Minimum number of shareholders: 1
- Corporate shareholders permitted
- Audited financial statements must be filed every year within nine months of financial year-end (exemptions available from audit requirement).
- Confirmation Statement must be filed every year which includes details of persons holding significant control ('PSC') over the Company.
Corporation Tax Rates:
- For financial years commencing 1 April 2017, all profits will be taxed at the rate of 19%;
- The corporation tax rate is scheduled to reduce to 17% from 1 April 2020.
Corporation Tax Returns:
Must be filed within 12 months of accounting period end.
Capital Gains for Companies:
Rates above apply subject to potential exemption where a UK resident company sells shares if certain conditions apply
- Dividends: 0%
- Royalties: 20%*
- Interest: 20%*
(*Can be reduced/eliminated with careful planning or on application double tax treaty relief may be available)
Double Tax Treaties:
UK Corporate Tax
The UK’s tax regime holds a number of benefits for international companies which want to establish businesses in this jurisdiction. The UK has over 130 tax treaties with other countries – no other country in the world has as many.
These treaties reduce - and in some cases completely eliminate - withholding tax (WHT). Dividend payments by UK companies are not subject to WHT. Other features include:
- UK tax exemption on qualifying foreign dividends
- Capital gains exemption for the disposal of qualifying participations
- Corporation tax rates of 19% for qualifying small companies, if certain conditions are met
- Tax depreciation available for purchased intangible assets, including goodwill and trademarks
- Reduction or elimination of WHT on interest and royalties paid to residents in tax treaty countries, under certain conditions
Pearse Trust’s London staff are experienced in advising international clients on how best to utilise the UK’s tax reliefs.
UK Company Incorporations
A new company can be formed by Pearse Trust in 24 hours, if required, but typically it takes five to six working days. Our formation services cover the following categories of companies - private limited, agency, holding, royalty and nominee, as well as limited liability partnerships.
The main features of incorporation and governance requirements for private companies are:
- No restrictions on residency and nationality of directors
- Minimum requirements for forming a private company are £1 in paid-up capital, one director and one shareholder
- Filing obligations which require lodging of audited financial statements within 9 months of financial year-end.
Pearse Trust offers a full-service incorporation service for the UK market and can fast-track incorporation requests.
UK Corporate Compliance
The UK has a well-developed compliance system, with companies, their directors and officers obliged to meet a number of corporate governance requirements. There is a personal responsibility on company directors to make certain details available to their shareholders and members of the public. Such information includes:
- Capital structure
For limited companies, audited financial statements have to be lodged within 9 months of the financial year-end, but certain companies can gain an exemption from an audit.
Pearse Trust’s London office has many years of experience of advising clients on their compliance obligations and of dealing with Companies House.
UK Process Agent
Where overseas companies and individuals, particularly those in finance related industries or transactions, enter into agreements or undertakings which are governed by UK legislation, such parties will ordinarily be required to provide an address for service within the UK.
Pearse Trust International Limited, as your appointed agent for service of legal process, can provide you with an address for acceptance of service of notices, proceedings and other related documents, at our central London offices, situated in the heart of the legal district, 5 minutes walk from the Royal Courts of Justice.
Our dedicated team is on hand to receive and accept, on our clients’ behalf, any documentation involving proceedings issued by UK courts, counterparties or arbitration proceedings.
The following would ordinarily apply where we are engaged to provide such services:
- Our address would be utilised in the notice provisions of any agreement(s) entered into;
- You or your appointed advisor would be notified immediately of any documentation / notices received;
- We can notify you of such notices by your preferred communication medium to include email, facsimile, post, courier or any combinations thereof.
Pearse Trust International Limited can offer you a comprehensive and cost effective service as a process, or service agent, which will enable you to comply with your contractual obligations under UK legislation.
Pearse Trust offers tailored solutions for the UK market. They usually involve matching client priorities with different types of company structures and other measures which enable clients to maximise wealth.
Solutions may involve the creation of suitable vehicles for:
- International trading, including commission arrangements
- Intellectual property, including related royalties
- Managing long-term investments
- Other specific client requirements