The United Kingdom has long been one of the most attractive countries for starting an IT business. Stable English law, clear rules, and strong protection of intellectual property create predictable conditions for entrepreneurs. In addition, the UK has a global domestic market and provides direct access to international clients. A company registered in the UK usually inspires more trust among foreign partners.
According to a Barclays study, 62% of technology executives consider the UK a more attractive place to grow a business than other regions.
The UK IT sector is one of the most active in Europe. The technology market already exceeds £150 billion and continues to grow thanks to cloud services, artificial intelligence, and fintech. London is one of the world’s leading cities in terms of the number of technology projects and venture capital investments. Key growth areas include AI solutions, cybersecurity, business digitalisation, and blockchain.
For Ukrainian IT professionals who want to scale a startup or an outsourcing company, the UK offers a strong combination of jurisdictional prestige and practical business advantages.
Best Legal Structures for an IT Business in the UK
There are several legal forms available in the UK, but in practice IT businesses usually choose one of the following three: Private Limited Company (Ltd), Sole Trader, or Limited Liability Partnership (LLP). Below is a practical overview of each option from the IT perspective.
Private Limited Company (Ltd)
A Private Limited Company is similar to a limited liability company. It requires at least one shareholder and one director. There is no real minimum share capital requirement — it is enough to issue one share with a nominal value of £1. The liability of shareholders is limited to their capital contribution.
Company profits are subject to Corporation Tax, while dividends paid to shareholders are taxed separately. The Ltd structure is considered the most prestigious and convenient option for IT companies. It allows you to attract investors through shares, increases trust among clients and partners, and protects the owner’s personal assets.
The registration process is straightforward and can be completed online within a few days.
Sole Trader
A Sole Trader is a self-employed individual. There are no capital requirements, and income is taxed under personal income tax rates.
For IT freelancers living in the UK, this may be an acceptable option. However, for a Ukrainian non-resident, Sole Trader status is difficult to use. In practice, this form is available mainly to people who live in the UK and pay personal taxes there.
If a Ukrainian entrepreneur plans to work remotely from Ukraine, setting up an Ltd company is usually a much better option than registering as a Sole Trader. Another important downside is unlimited liability: in case of debts, the entrepreneur is personally liable with all their assets.
Limited Liability Partnership (LLP)
An LLP requires at least two partners. Each partner has limited liability, similar to shareholders in an Ltd.
The key feature of an LLP is tax transparency: the partnership itself does not pay corporate tax. Instead, each partner pays tax on their share of the profit personally.
In IT projects, LLPs may be useful when two or more founders want flexible profit sharing and direct taxation at the partner level. However, if the partners are non-residents, international tax issues can become complex. In most cases, startups and IT companies prefer an Ltd, while LLPs are more often used for consulting or partnership-based projects.
Non-Resident Conditions and Remote Registration
An important question for Ukrainians is whether it is possible to set up a UK company without being a resident or physically present in the country. The answer is yes.
UK law does not require directors or shareholders to be UK residents. A Ukrainian can be the sole director and own 100% of the shares in an Ltd company or be a partner in an LLP.
Company registration can be done remotely. The only requirement is a registered office address in the UK. This does not mean renting an office — it is allowed to use a registered office service provided by an agent or a UK lawyer. This address is used for official correspondence with government authorities.
PSC and Directors: Requirements and KYC Checks
As mentioned above, a director of a UK company can be a foreign national. The director’s full name and service address (a contact postal address) are publicly available in the UK company register.
UK law requires transparency of ownership. During registration, the company must disclose Persons with Significant Control (PSC) — individuals who own more than 25% of shares or voting rights, or otherwise control the company. PSC details (full name, date of birth, nationality, country of residence, and nature of control) are recorded in the public register.
Since 2025, the UK has strengthened identity verification rules. Each director and PSC must now pass identity verification for the company register, usually by providing a biometric passport and proof of address. After verification, the person receives a unique personal ID code. This is a one-time procedure, and the code is used for all future company actions.
Additional KYC checks will also apply when opening bank accounts or payment services.
Overall, the UK is business-friendly for foreigners: nationality and remote management are not barriers, as long as transparency and verification requirements are met.
Step-by-Step Registration of an IT Company in the UK
Registering a company in the UK is a fast and well-structured process. Below is a practical step-by-step guide for Ukrainians.
Step 1: Choose the business structure
Decide whether your business will be an Ltd, an LLP, or (if you move to the UK) a Sole Trader.
Step 2: Choose a company name
The name must be unique, include “Limited” or “Ltd”, and must not contain prohibited or misleading words. It is also recommended to check trademarks and domain availability.
Step 3: Prepare a registered office address
You must have an official UK address. If you do not have your own premises, this can be provided by a lawyer or a registered office service. Make sure the provider reliably forwards official mail.
Step 4: Appoint company participants
For an Ltd, at least one director and one shareholder must be appointed (they can be the same person). For an LLP, at least two partners are required.
Step 5: Prepare incorporation documents
At this stage, the main corporate documents are prepared. Our team handles the full process and adapts the documents to the client’s needs. We can use standard templates or create customised documents based on your business model.
We also select the appropriate SIC codes (business activity classification shown in the Companies House register). Our lawyers analyse the business model and choose suitable codes, taking into account future growth and multi-service activities.
Step 6: Filing and registration
Once the documents are ready, we submit the application to Companies House and pay the required fees. In most cases, the company is registered within 24 hours.
At the same time, the company is automatically registered for Corporation Tax and receives a UTR (Unique Taxpayer Reference). VAT registration is done separately when required or when it becomes beneficial.
Taxation of an IT Business in the UK
The UK tax system is different from the Ukrainian one, and understanding it is key to efficient operation.
Corporation Tax is similar to corporate income tax. It applies to company profits earned worldwide. As of 2025, the UK has progressive rates:
- 19% for profits up to £50,000
- 25% for profits above £250,000
This makes the UK competitive internationally, especially for small and growing businesses.
Corporation Tax is calculated on taxable profit (income minus allowable business expenses). Expenses include salaries, rent, equipment, software, marketing, and other costs incurred solely for business purposes. Trading income, investment income, and capital gains are all included in the tax base.
Corporation Tax is paid once per year after the end of the financial year. Even if the tax due is £0, the tax return must still be submitted.
Paying Corporation Tax does not eliminate personal tax obligations. Dividends paid to shareholders are taxed separately. If the owner is a Ukrainian tax resident, dividends are usually taxed in Ukraine under the double tax treaty.
Income Tax and National Insurance
This applies mainly to Sole Traders or company directors who receive a salary.
UK Income Tax is progressive (2025 rates):
- 0% up to £12,570
- 20% from £12,571 to £50,270
- 40% from £50,271 to £125,140
- 45% above £125,140
National Insurance Contributions (NIC) are also payable:
- 6% on income from £12,570 to £50,270
- 2% on income above £50,270
Non-residents working outside the UK generally do not pay UK Income Tax on salaries, but such income may be taxable in Ukraine.
VAT and Registration Thresholds
VAT (Value Added Tax) is similar to Ukrainian VAT. The standard rate in the UK is 20%. VAT registration becomes mandatory if taxable turnover exceeds £90,000 over the last 12 months.
Most IT services (software development, consulting, SaaS) are subject to 20% VAT when sold in the UK. Services provided to clients outside the UK are often outside the scope of UK VAT or zero-rated.
For example, IT outsourcing to US or EU clients usually does not trigger UK VAT, even with high revenues. However, sales to UK clients do count towards the VAT threshold.
Companies may also register voluntarily to recover VAT on expenses or to look more credible for B2B clients, but this comes with reporting obligations.
It is important to note that operating in the EU may require VAT registration in specific EU countries, depending on where clients are located and how services are supplied.
Bank Accounts and Payment Services
After registration, the next question is how to receive payments.
Traditional UK Banks
In practice, traditional UK banks rarely open accounts for companies owned and managed by non-residents. The main issue is not paperwork, but the lack of a strong UK presence (local directors, office, or management).
As a result, Ukrainian founders usually choose fintech platforms instead of traditional banks.
Fintech Solutions
Fintech platforms provide full business payment functionality, including GBP accounts, EUR IBANs, corporate cards, and online account management. For non-resident-owned UK companies, fintech solutions are often the most practical and realistic option.
The UK remains one of the most attractive jurisdictions for IT business thanks to its stable legal system, predictable regulation, and direct access to global markets. For Ukrainian entrepreneurs, this is both a growth opportunity and a tool for working with international clients.
Entering the UK market requires preparation and understanding of legal and tax rules. However, with the right structure and professional support, setting up an IT company in the UK is a realistic and justified step.
The UK is open to cooperation with Ukrainian entrepreneurs — the key is to use these opportunities correctly and comply with all legal requirements.
Our legal team supports IT businesses in the UK at every stage — from choosing the right company structure to tax and corporate setup. Contact us to launch your project safely and with a clear focus on growth.
