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UK - Non-resident companies



UK companies whose place of effective management is located in a country which has ratified a double tax treaty with the UK, based on the OECD Model, will be considered non-UK resident for UK tax purposes (s249 FA 1994). Such a UK company will only be liable to pay UK tax if it receives UK source income, although even this income may be protected from UK tax by virtue of the relevant treaty. The treaty must contain a tiebreaker clause, which determines the residency of a corporate body by reference to the place of effective management of the company. Not all treaties concluded by the UK contain this particular provision. Therefore the choice of location of a UK non-resident company is narrowed down. This choice is further narrowed down by the fact that naturally the company will be looking for a location with favorable tax system and financial infrastructure. Such a choice of location should satisfy the following basic requirements: Low rate of tax; Availability of double tax treaties with other countries; Freedom from exchange controls. The UK registration of any particular company derives substantial commercial advantages. The shareholders of such companies enjoy the benefits of prestige and reputation associated with UK registered companies. However, when the nature of the business activities of this UK registered company can be carried out from outside the UK then the company can become non-resident for tax purposes as already described. Treaty countries with low rates of corporation tax e.g. Cyprus, Mauritius or Malta therefore offer tax-efficient locations for the management of UK companies.

 

  • Incorporation Fees - from £ 665
  • Renewal Fees - from £ 550
£ 665

Key facts about UK Non Resident Company:

Name : UK companies must end with Limited or Ltd to denote limited liability and can use any name unless it includes words such as Empire, Crown, Imperial, Windsor, Royal, Assurance, Bank, Building Society British, National, Great Britain, United Kingdom, England, English, Scotland, Scottish, Wales, Welsh, Ireland or Irish – (if the words are used as a suffix, they are normally allowed). The initials 'GB' or 'UK' do not require approval.’ European’ - will not be approved if they imply unjustifiable connection with EU. ‘International’ - as prefix major activity must be overseas trading, as suffix, company activity must be in 2 or more overseas countries or any other words deemed sensitive or offensive.
Shareholders: The minimum number of shareholders is one; the maximum number of shareholders is fifty in the case of a private company. Corporate shareholders are allowed.

Share capital: There is no statutory minimum or maximum capital for a private company. It is now possible to set up a company with only one member and for that member to have only one share, but this is exceptional. Share capital is usually 1,000 pounds or above.

Directors and secretary: Every company must have at least one Director. A sole director cannot also be the secretary. Therefore, a company must have at least two officers, a director and a company secretary. However, it is possible for the company secretary to also be a director of the company if another director or secretary is also appointed.

Registered office: Every company must have a registered office, which is the address to which any formal communications may be sent. It must be a physical location as people have the right to visit the office to inspect certain registers and other documents.

Annual Accounts: All UK companies are required to file accounts prepared in statutory form with the Companies House and the HM Revenue and Customs whether trading or not. Failure to file accounts on time will result in penalty being imposed. These Accounts needs to be filed 9 months after the accounting period end which is 12 months from the date of incorporation with the companies’ house and you will have 9 months and 1 day to pay the corporation tax and file the corporation tax return with the HM Revenue and Customs.

Taxation: 20% for the first £300,000, 30% when profit is above £1,000,000, there is a marginal relief rate for profit between the two figures.