UK Company Formation for Non Residents

So you live outside the UK and want to form a UK company but are not sure about the process, time, costs, and the paperwork involved. To some, it may seem a challenging prospect. Well, the good news is that it is not as difficult as it may seem from a distance, especially if you choose a company formation agent that can not just for the company for you but can help make sure that you can trade in the UK using the company in shortest possible time. Let us walk you through the process and identify for you the challenges you may face as a non-UK resident and how you can overcome these.

How can a non-UK resident form a UK Company?

First, let's address some of the misconceptions. You don’t need a UK visa to form a UK company. The process of forming a UK company for non-UK residents is the same as for the UK residents. However, there are some key practical challenges which we tell you upfront so you can prepare yourself for them when the time comes.

The step by step guide for UK Company Formation

So you have a business idea and perhaps a business plan, interested customers and you believe the UK market has a good potential for your goods and/or services.
  • Chose Your Company Name

The first thing you need is to decide on a company name and check whether this name is available at the Companies House. Our Company Search facility can help you narrow down your choices and decide on a suitable company name with a few clicks.
  • Decide on Company Structure

You may have already decided who will be the company’s shareholders and Directors. If not then think this through now. A UK company needs at least one shareholder and one Director (a physical person and cannot be another company). The company’s share capital is used to decide how profits of the company will be shared among its owners (ie shareholders). UK company can be formed with 1 share of £1, however, if you wish to consider allocating shares to your business partners or family members then share capital of £100 can be a good starting point. Once you have decided on who the company’s shareholders are (keeping in mind that it can just be anyone person), you need to decide on company Directors. A UK company can be formed with one Director. A Director is normally someone who will work in the business on a day-to-day basis and must be over 16 years old. Company Directors and Shareholders do NOT need to be UK residents.

Challenge for Non-UK Residents

As a non-UK resident person, keep the number of shareholders and Directors to a minimum to start with. UK has strict KYC (Know Your Client) requirements and carrying out ID checks on several non-UK Residents can be time-consuming and costly. You can always add additional people as shareholders and Directors once the company is ready to trade.
  • Registered Office Address

A UK company must have an official address where the official post can be received and if someone wants to contact the company, they can do so. It has to be a physical address and not a PO Box number. Most company formation agents provide the services of a company registered office which allows you to receive the official posts.

Challenge for Non-UK Residents

The registered office address becomes important when you want to open a company bank account or register the company for VAT. Both banks and HMRC (UK tax office) are aware of certain addresses which may be physical addresses but in actual practice are virtual addresses. If you chose one of those addresses getting a company bank account opened or getting the company VAT registered may prove to be a challenge.
  • Registering a Limited Company

Once you have chosen the company name, decided upon Shareholders and Directors, found the correct registered office address then you are ready to form your UK company. This is an online process where you can  login and follow on screen instructions to apply for the company formation. You will need to hand Director and Shareholders ID documents and proof of home address which can be a utility bill or personal bank statement showing your full home address in English. If you face any issues arranging the information our support team  is just a call away During the set up process you will be asked to select Company’s Memorandum and Articles of Association. These are official documents which form the company’s constitution and govern how the company will be run. Don’t worry, these are standard documents which will take care of most of your needs and can be tailored to your specific requirements if needed once the company has been formed. It can take up to 2 working days for a company to be registered, once you have applied for the registration depending upon the Companies House work load. In most cases the company is formed within a few hours of submitting the application.
  • Post Company Registration

Once the company is formed you will receive by email, company registration documents which include Certificate Of Incorporation, Shareholders Certificates and Memorandum, and Articles of Association. You may need these documents when opening a company bank account and for various business contracts that you may need to do, so keep them safe. You will need to consider the following tasks once the company is registered
  • Open a company bank account.
  • Consider registering company for VAT (specially if you are going to import or export goods)
  • Consider registering for PAYE if you intend to employ staff in your company or intend to pay your self a salary within the next 30 days
  • Seek professional accounting advice, because as a company Director you are now responsible for making sure the company keeps proper accounting records as defined by the Companies Act, otherwise you can end up facing fines and potential penalties
  • A UK company is automatically registered with HMRC for paying Corporation tax, however, as a company Director you need to make sure that annual financial statements and company tax return is completed and filed on time to avoid fines and penalties.

Challenge for Non-UK Residents

  • Bank Account – this is the biggest challenge most non-UK residents face as most UK banks will ask for a UK residential address for the company Director(s). We specialise in helping non-UK resident Directors get a company bank account via our network. We don’t just form the company for you we work with you to help your company start trading as quickly as possible. Contact Us to arrange a bank account set up.
  • VAT Registration – Even though this registration is not mandatory for a newly formed companies, however, if your annual turnover is going to be more than £85,000 or you intend to import or export goods it will be mandatory for you to register your company for VAT. As the company has non-UK resident Director(s) you will need to prove to HMRC that principal place of business for the company will be at a physical UK address where they can visit and check company’s books and records. We fully understand the HMRC requirements and will ensure that we guide you through this process to ensure you get the company successfully registered for the VAT

What next?

Forming a UK company for a non-UK resident is not only possible but it can be done quickly and working with an experienced company formation agent who has successfully formed companies that are TRADING in the UK is absolutely critical. We have done this for hundreds of entrepreneurs and you can be the next to realise your ambition in setting up a trading company in the UK. Let us Register a company now