How To Start A UK Company As an Expat part 1 – that will be the topic of today’s article.
Before introducing this article, if you are interested in our core services which are expat financial, insurance and mortgages, you can contact me here.
The best time to consider your financial situation is when you are moving to a new country.
Some people forget how important it is to keep a UK company active overseas. However, the vast majority of expats still prefer banking with a UK account instead of their native bank accounts, even when living in another country for an extended period.
In order to make sure your bank accounts and credit cards remain accessible while you travel the world, you need to file for a ‘non-resident’ status with your bank. This means they will not assume you are an absentee to leave the country, despite your tax status.
Of course, with just a few extra steps, it is also possible to start up your own UK Company while living in another country. While this may seem like an unnecessary hassle at first, plenty of perks is available.
This type of business is commonly known as a ‘personal service company, and it essentially means that you will be taxed for your role in the UK Company while also being able to claim back certain expenses. This reduces your overall tax bill and can be an effective way to move some of your salaries into a lower-tax bracket.
To create your service company, you will need to file with Companies House and HMRC. In this article, we will walk you through several ways to start a UK company as an expat. Not only is that, but you’ll also understand the requirement and everything needed. Read further to understand more!
Requirements to Start a UK Company
Starting a business can be an exciting time as you watch your dreams become a reality. However, there are several things you need to consider before starting up your own company. Here we highlight seven requirements.
Company Name and Address
Your business name and address must be registered with Companies House (the official UK body that holds records of all company information). You can do this by submitting the name and address you want to register your company with, as well as an initial fee of £12.
Your trading name is the name that will be registered at Companies House. Your trading name does not have to be related to your business address, but it must be distinguishable from similar businesses in the same field.
For example, if your trading name is ‘Fortune Cookies’ and you live in Liverpool, you could register your business at this address. However, you would not be able to register it as ‘Fortune Cookies – Liverpool.’ A company can have a name that does not contain any words, for example, ‘Apple Computers’ or just ‘Apple.’
You must appoint two directors. They need to be over 18, and they must be people. This means you cannot name a company as a director. A sole trader can act as their own director, but if more than one person is running your business, you must appoint an external director.
A Company Secretary must be appointed if the company has more than one Director. The role of the Company Secretary is to take notes during board meetings ensure that minutes are taken and they are submitted to the Companies House. The secretary’s details are listed on public records, so they must be publicly accessible.
A company seal is not compulsory, but if you have one, it can be used to stamp documents with the date and your company’s name. Have the word ‘company’ above your seal so that no one else can use it. The seal acts as an official mark of authentication when signing important documents.
The day you complete the final stage of registering your business is called incorporation day. It is a historical date that can be used as a reference if there are any disputes about its history or accounts. It must be a weekday and cannot be a bank or public holiday. Use all the above information to register your business online at Companies House.
Incorporation day can be a pain to remember! Save yourself from any confusion and get in touch with an Incorporation Agent who’ll complete the process for you. You can find out more on this platform in the long run.
Registering your business with Companies House is just the first step. You also need to protect it by registering for VAT, PAYE, and Corporation Tax. Fortunately, if you work with an Incorporation Agent, they can register your company for all of these things, so you don’t have to worry about anything.
The biggest benefit of running a limited company is that you, the owner/director, are under no obligation to use your assets to pay for any financial loss. The only time this would be an issue is if your company goes into liquidation and can’t cover its debts. But in general, your creditors cannot reach beyond the business to claim money from your assets.
Starting a Company in the U.K with Guides
Starting a business in the UK can be extremely easy and relatively inexpensive, or full of regulatory burdens and costly. Many people wrongly assume that opening a business in the UK will be expensive, time-consuming, and fraught with red tape.
However, compared to many other countries, it is actually much easier than starting a business in places such as the USA. The cost of forming a company in the UK is just £12 online. Companies can be formed by going direct to a specialist company formation agent. Still, the most popular route for most businesses is to use an accountancy practice that offers company formation services as part of their package.
This enables you to benefit from the tax and legal knowledge available within the larger practice. For the process to work, you must use a UK-based accountancy practice or an affiliation to another UK-based firm.
The process is quick and relatively simple (although tax rules can sometimes make accounting for VAT slightly more complicated), comprising four main steps.
- Choosing the business name
- Appointing the members
- Appointing the directors
- Documents and filing
We’ve summarized each stage in detail below, but if you would like more detailed information on any of these areas, please consult our website. If you’re relocating to the UK for work or other reasons, it can be relatively easy to open a business in the UK with little disruption in your current role.
If you currently work overseas or intend to work remotely, you’ll be able to do most of the company registrations yourself with no need for an accountant or additional help whatsoever.
1) Choosing the Business Name
The name you choose for your business must end with UK Limited, Ltd. or plc. This tells people that your business is a legal entity authorized to do business within the UK. If you wish to be more creative or descriptive with your company name, this mustn’t be too similar to an existing brand name, as this could lead to costly disputes over intellectual property rights later on.
Choosing a business name is simple with us; key in your desired name, and we’ll check it against the data held by Companies House for availability. If the name you have chosen is available, then you’re free to move on to step two.
2) Appointing Members
In most cases, the only member of a private limited company will be the director, but it’s possible to have more than one member. Any adult over the age of 18 can be a member of your business. Note that you cannot be a member yourself unless you are also a director or secretary.
3) Appointing Directors
This is the person responsible for the running of your business, and therefore in charge of making important decisions. The director cannot be the sole member, must live in the UK, and can be appointed as an individual or a corporation/company.
If you appoint yourself as a director, this will require no paperwork, but appointing another person to act as your director will require them to complete certain forms via Companies House.
4) Documents & Filing
Your company will need to keep specific documentation on record, including the Memorandum and Articles of Association (essential for filing accounts each year), minutes of board meetings, financial statements, and annual returns.
Many accountants offer a ‘document location’ service as part of their package at no extra cost. This means they can store your important information safely and securely, ensuring it is filed correctly with the relevant authorities at all times.