Great Britain (England, Scotland, Northern Ireland)

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Great Britain (England, Scotland, Northern Ireland)

GENERAL INFORMATION ABOUT JURISDICTION

The United Kingdom of Great Britain and Northern Ireland is a Western European state with an impact on the entire world. The British legal system is based on precedent. British companies are very prestigious, and some legislative acts provide significant opportunities for entrepreneurs while starting a business.

The UK is often mistakenly referred to as an "offshore zone", but this jurisdiction is not offshore and never was. It is possible to achieve favorable tax conditions when opening a company in the UK by setting up a partnership firm. This form of company allows you to conduct business without taxes (for this you need to be a non-resident, do business and earn income outside England). Therefore, in our material, we indicate the phrases "offshore Britain" in quotation marks, showing, as it were, their figurative meaning.

BUY A UK COMPANY - BENEFITS:

  • Britain is not an offshore company. Jurisdiction is not included in the "black" list of other states.
  • It is prestigious to open a business in the UK, since England has a good reputation, which enhances the company's image in the eyes of partners and investors.
  • In the UK, there is no requirement to pay an annual state fee for the existence of a company, therefore, opening a company in Britain is also beneficial in terms of its content. And all incurred expenses for incorporation will be fully justified.
  • English and Welsh (Wales) LP partnerships are a profitable alternative to Scottish partnerships as the beneficiary information is not shared with the UK public registry.
  • For UK Ltd and LLP it is possible to issue a VAT number.
  • By purchasing an Ltd company in England, it is possible to obtain a tax resident certificate (if the director is a resident of Britain).
  • The UK Registry provides an opportunity to protect the personal data of company members by filing a privacy statement if a company’s director, partner or person with significant control of the PSC (or the person living with him) is at serious risk of violence or intimidation due to the activities of his company or partnership (LLP). It is possible to hide: a home address indicated in the register - for directors, LLP and PSC members; all personal information is for PSC only.

LAW

Companies in England are regulated by:

  • Companies Act 2006;
  • Limited Liability Partnerships Act 2000 - for LLP forms;
  • Limited Partnerships Act 1907 - for LP forms.

ENGLISH COMPANY INCORPORATION

Types of companies

In England, there is a possibility to register a company in the following legal forms:

  • Limited, Ltd (Limited Liability Company);
  • LLP (Limited Liability Partnership);
  • LP (Partnership established in England or Wales).

LIMITED LIABILITY COMPANY (LTD):

  • Minimum statutory capital – not established.
  • Shares – only registered shares are allowed.
  • A shareholder in LTD is at least one (individual/legal entity), no matter what kind of residence.
  • LTD has at least one director, exclusively an individual, resident of any state. It is allowed if the shareholder is also a manager.
  • Secretary - no position needed.
  • Information about directors, founders and beneficiaries is publicly available. In the UK, an open Register of Controlling Persons (Beneficial Owners) since 2016.
  • Legal office - within England.
  • After company formation in England this will be possible for the director to obtain a tax resident certificate if he/she resides in England .
  • Ltd maintains and files a financial statement every year.
  • Regardless of the jurisdiction in which the income is earned, a UK registered company Ltd is taxed on all profits earned.

LIMITED LIABILITY PARTNERSHIP (LLP):

  • Minimum statutory capital – not established.
  • Bearer shares are not allowed.
  • Founders’ requirements – two or more partners - individuals or legal entities. The jurisdiction of residence is not important.
  • A partner performs Head functions.
  • Secretary – not required.
  • Public information - information about the founders and beneficiaries (the PSC register has begun to be public since 2016).
  • Company in England is obliged to form and submit an annual financial report and shall be audited.
  • LLP in the Great Britain is not subject to corporate tax in case when partners of the LLP are not  residents of the UK and the LLP’s income was made outside UK. Income taxes shall be paid by partners within which such income were allocated.  Thus, partners – residents of jurisdictions with low tax rates may use this rule during the tax payment in their country of registration (residence) on distributed partnership income.

PARTNERSHIP (LP) ESTABLISHED IN ENGLAND OR WALES:

  • Founders - two or more partners - individuals or legal entities, citizens of any jurisdiction. According to the law, at least one general partner and one limited partner are appointed in English and Welsh firms.
  • Director - as a rule, the general partner performs the functions of a leader.
  • "Offshore" companies in the UK (LP) are formed by signing a partnership agreement (recorded in the British Register).
  • Information about the beneficial owners of LP is closed (unlike LTD and LLP).
  • LPs of England and Wales are exempted from filing annual financial statements.
  • If the business is not conducted in England/Wales, and the partners are located outside the borders of the state, a zero tax return must be submitted.
  • By opening an LP company in England, consisting of non-resident partners, it does not have the right to obtain a certificate of tax resident status and take advantage of UK double taxation treaties.
  • The partnership's legal office must be located in England/Wales.

An “offshore” LP company in England or Wales is not a separate legal entity. This means that not the partnership itself is taxed, but each partner in the country of his residence, depending on the contribution to the partnership.

Therefore, it is profitable to buy an English company in the form of LP precisely from the position that it is not taxable. The income received by an English or Welsh LP is the personal income of its partners and they are required to declare it at their place of residence. That is, if you register a company in the UK and organize the correct corporate structure, where the partners will be non-residents of the UK, LP will be exempted from having to pay taxes in Britain. Therefore, in order to save profit, it is proposed to introduce citizens of offshore tax-free zones into the structure of the enterprise.

TAXATION

Taxation in England is based on territorial principle: resident companies are liable to taxation on their overall income, and non-resident companies are tax liable on their income gained in England.

Income tax - 19%.

The amount of tax on dividends can be basic (7,5%), high (32,5%), and additional (38,1%).

VAT – 20% (in some cases may apply reduced rate – 5% or 0%).

If a business operates in the UK, in EU member states or with organizations from EU member states, VAT registration may be required. When opening a company in England, it is mandatory to obtain a VAT number if the company's annual turnover is more than £ 85,000. In other cases, it is possible to register as a VAT payer voluntarily by providing the contact details of business partners, contracts and invoices, as confirmation of intentions to achieve the required amount of annual turnover in the near future.

When opening a company in the UK and obtaining a VAT number, you must submit a report on your business every quarter. If for several reporting periods zero reports are submitted (no VAT payable, refundable, offset), the company may be excluded from the register of VAT payers and it will be necessary to register first.

CURRENCY CONTROL

Not applicable.

DOUBLE TAX AVOIDANCE AGREEMENTS

England has entered into double tax avoidance agreements with more than 140 countries, including Ukraine.

If you need to register an English company in London (UK), please contact our lawyers for advice:

+38 (098) 737-88-88

We will help you with formation or registration an offshore company in England (UK) or any other jurisdiction of your choice, and help to open bank account or  some accounts for you company. Business registration in the UK with the Campio group is a profitable and cost-effective solution.