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Advantages of registering your startup in the UK

Advantages of registering your startup in the UK

Wednesday, December 28, 2022 UK Startups Advantages benefits

UK company registration is simple. For example:

1- A single director and shareholder can register a private company                 {LLC}.

2- 100% foreign ownership is allowed {No annual fees for company                  license}.

3- A UK company can be incorporated online within 3-6 (No personal- presence required).

4- A UK company is inexpensive to set up.

5- A UK company has an excellent global reputation, looking good to your customers, suppliers, governments, and banks. 

It is because English common law is the basis of company law in many countries, so the UK company structure is well understood.

6- A UK company is, therefore, seen as a stable, well-regulated vehicle through which to conduct local and international trade.

The UK is an attractive tax regime for multinational Clients. For example:

  • The corporate tax rate is 19%, one of Europe's lowest 3 countries.
  • A foreign company can open a UK corporate bank account and not be subject to UK tax if i) it has no sales in the UK ii) it has no office in the UK and iii) its beneficial owners reside outside the UK. However, using this structure will mean that the company will be tax resident elsewhere, where additional liabilities might arise. This structure also removes access to the UK's network of tax treaties.
  • Dividends paid to UK companies are generally tax-exempt. 
  • The UK also levies no withholding tax on dividends paid to foreign residents.
  • Tax credits are available for companies involved in research and development (R&D). 
  • Large companies can secure deductions from their taxable income, which is 30% of their current spending on qualifying R&D.
  • Capital gains for companies selling subsidiaries (with at least a 10% holding) are tax-exempt if the subsidiary has been owned for at least one year.
  • A UK company can be legally tax exempt from UK tax provided the UK company remains UK tax resident and operates through a branch/permanent establishment in a jurisdiction with which the UK has a tax treaty.
  • In the Heritage Foundation's 2020 Index of Economic Freedom, the UK has the world's 7th freest economy. It scores particularly well (at 80%) for investment freedom and capital flows. The country is perceived as having low levels of corruption. Consequently, it is a low risk environment for international investors, who can expect to receive i) good legal protection when investing li) transparent contract bidding protocols and iii) fair treatment in courts if disputes arise.
  • The World Economic Forum ranks the UK as the world's 9th most competitive economy.
  • The UK workforce of 30 million is highly educated, qualified and offers a wide pool of talent for international investors.

The UK is an attractive location from which to trade regionally and internationally. For example:

The country's large ports including London, Felixstowe, Southampton, Bristol, and Liverpool) connect the UK with the world. Cargo transit times between the UK to the east coast of the USA are 10 days, while to the rest of Europe just one day's sailing time.

Heathrow airport is one of the world's biggest and most connected transport hubs. Major European capitals are an hour away. New York is just six hour flight. Dubai is seven hours.

The UK has more than 500 million

consumers on its doorstep in the European Union (EU). However, accessing EU markets because more challenging in 2020 when the UK exited the bloc.

The UK government offers a range of business incentives. These include:

  • Tax relief
  • Venture capital programs

In 2021 the UK government set up a US$500 billion fund to encourage investments in i) technology ii) renewable energy and ili) life sciences. 

The UK has one of the world's most stable, sophisticated banking systems. London is one of the world's top financial centers and almost every international bank has a presence in the city. As a result, international investors have access to a wide range of financial products and support for business growth.

The UK insurance market is one of the world's biggest. The sector attracts more than US$100 billion annually in premiums.

London has one of the world's most important stock markets. The London Stock Exchange is an excellent option on which to raise funds for ambitious businesses.

The best advantage of a UK company

  • Companies based in the UK can reach more than 500 million consumers across Europe, offering great potential for foreign entrepreneurs and investors with business support and tax incentives.
  • Companies and limited liability partnerships registered in the UK can also be used as asset management Firms for funds registered in British Overseas Territories including i) Jersey ii) Guernsey iii) the Isle of Man and iv) the British Virgin Island.
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