Offshore Company Formation in the United Kingdom

In order to present their company as a reliable European company, investors are looking for places in Europe to form an offshore company. As one of the largest states in Europe, with an estimated population of 62 million people, the United Kingdom is one of the ideal places to form an offshore company in because it has straight forward and direct incorporation procedures, affordable operating costs, and maintenance costs.

Types of Companies

There are 3 different types of companies that you can incorporate as your offshore company in the United Kingdom and they are:

  • Limited-type company including close-type limited liability and joint stock company
  • LLP-type company including Limited Liability Partnership
  • Scottish LP-type company including Limited Partnership

 

Limited-type Company

Typically, most companies in the United Kingdom belong to this type of company. In order to form a limited-type company, one Director who must be a natural person and a shareholder who must be either a natural person or legal entity is required. Both the Director and shareholder can be from any citizenship. A nominal service is also offered at the Registrar of the UK Companies.

To send and receive mail, a limited-type company in the United Kingdom is allowed to have its own mailing address. Furthermore, a limited-type company is a taxpayer, hence the company will be taxed 20% on the net income and it needs to present the company’s financial statements once every year. However, if the company is an agent of another offshore company, it will enjoy a 5% agency remuneration of the net income and this is depending on the income tax. If the company pays its taxes in the United Kingdom and has a local resident Director, the company will be considered as a UK resident. In this case, the company can go to the tax department to get a residency certificate.

 

LLP-type Company

A Limited Liability Partnership (LLP) company is a company that is formed through a partnership of 2 people or more who are either natural persons or legal entities. In contrast to a limited-type company, one of the advantages of forming a LLP-type company is not having to pay any income tax. Instead, if the partners are making money from the company, they will have to pay the income tax themselves. To avoid having the company to pay income tax, you can use two nominal offshore companies and they must not be tax residents living in the United Kingdom. Nevertheless, the company still have to present its company’s financial statement once every year even if they are not taxed. Thus, the company is still able to trade outside of the United Kingdom without any restrictions because it pays no taxes, and therefore it is not considered as a resident.

 

Scottish-LP Company

The structure of a Scottish-LP company is almost the same as the Limited Liability Partnership. The difference between them is a Scottish-LP company needs to file a tax return. Though, if the members are not tax residents in the United Kingdom, the company is not required to pay the tax and it is not a resident. As a result, it can enjoy the same privilege as Limited Liability Partnership in being able to trade outside of the United Kingdom without any restrictions.

 

Term of Registration of a United Kingdom Company

The term of registration of an offshore company in the United Kingdom happens in 3 steps. The first step, which is to incorporate the offshore company, will take 4 business days. The second step, the notarization and apostillisation process, will take another 3 to 5 business days while the third step, the delivery of the documents through courier service, will take another 3 to 5 business days. For those of you that wants to get things done in an urgent manner, additional charges are available for urgent same day incorporation and apostillisation services.

 

Advantages of Having a United Kingdom Company

The advantages of having a United Kingdom company are:

  • Reliable European country
  • Has treaties with many countries on double taxation
  • LLP and LP companies can be used as offshore companies
  • The lowest authorized capital is 1 British Pound Sterling
  • Direct and fast incorporation of the company
  • Easy liquidation of the company
  • It is not mandatory to appoint a resident Director
  • Nominal Director and shareholder services are allowed

 

Disadvantages of Having a United Kingdom Company

Some of the disadvantages of having a United Kingdom company are:

    • Limited and LLP companies are required to present their company’s financial statements

 

  • You can be fined if you present your company financial statements late

 

Registration Process

The list of things you need to do to incorporate a United Kingdom company are:

  • Check the name of your company
  • Confirm that the name is still available and not taken by other companies
  • Make payment for registration fees and duties including state duties and other payable costs within the first year
  • Do company registration with Registrar of the Companies
  • Notarize documents
  • Apostillise documents
  • Send the documents to the client

 

Required Documents

The required documents include:

  • Certificate of Incorporation
  • Memorandum and Articles of Association
  • List of owners of the LLP or LP companies will have to sign a Partnership Agreement
  • Appointment of the first Director
  • First meeting’s minutes
  • Share certificates
  • Seal
  • Apostillised Power of Attorney if the nominal service is used
  • Declaration of Trust that is issued by the nominee shareholder if the nominal service is used
  • Unsigned Share Transfer Form if the nominal service is used