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By laura
- In Uncategorized
Setting up a company in the UK as a foreign citizen
Setting up a company in the UK as a foreign citizen can seem daunting, particularly in the post-Brexit era. Embarking on this new venture can be both exciting and challenging, but there are specific requirements that must be met. Below, we will outline the necessary steps to assist you when setting up a company in the UK as a foreign citizen.
What steps do I need to take when setting up a company in the UK as a foreign citizen?
There are various business structures in the UK, each with distinct characteristics. Before setting up a company in the UK as a foreign citizen, you must decide which type of structure best suits your needs. If you need advice with this matter, we recommend consulting an accountant to assist you throughout the entire process.
Sole Trader
A sole trader operates their business without forming a separate legal entity. The owners have unlimited liability, meaning they are responsible for all business liabilities, profits, and losses. Taxes are payable according to the individual’s earnings. You do not need to register the business with the Companies House, but it is important that you register with the HMRC.
Partnership
A partnership is an unincorporated entity with two or more owners sharing ownership, costs, benefits, and responsibilities. These partners have unlimited liability and are self-employed.
Limited Company (Ltd)
A Limited Company (Ltd) has separate legal liability from its founders, providing limited liability protection. This corporate structure is the most common type of company in the UK and is regarded as one of the easiest forms for foreign nationals to establish. Such companies must be registered with the Companies House and the HMRC
What type of company do you want to set up in the UK as a foreign citizen?
Company name
Once you have decided what type of company you are setting up as a foreign citizen, you must register it with the Companies House. The selected company name should not duplicate any existing names in the market. Additionally, it is essential to avoid any political connections or inappropriate language when choosing the name.
Registered address in the UK
This is a prerequisite where you will receive official communications relating to your company. If you do not have a physical address, you can use virtual address services.
Company director
It is necessary to appoint a company director who is responsible for the management and proper running of the company. The only legal requirement for this appointment is that the person must be over 16 years of age.
Which bank can I use when setting up a company in the UK as a foreign citizen?
When you set up a company in the UK, you need to open a bank account. It is advisable for this account to be separate from the personal accounts of the individuals establishing the company. Major UK banks provide specific accounts for businesses, although these accounts may incur significant costs, which could be challenging for new businesses. Online banks, such as Revolut or Wise, also offer solutions specifically for new businesses. Their websites contain further information about their services.
Setting up a company as a foreign citizen, which taxes do I have to pay?
Setting up a company in the UK as a foreign citizen involves several legal requirements that must be adhered to:
VAT registration
In the United Kingdom, businesses are required to register for VAT only if their annual income exceeds a specified threshold (£90,000). This registration can be completed through HM Revenue & Customs (HMRC).
Tax returns
Upon setting up a company, it is imperative to maintain accurate and up-to-date accounting records. Given the complexity of this task, we recommend you to engage the services of a professional accountant. Additionally, consultancy firms are available to assist with any inquiries, particularly during the initial stages of your business.
Insurance and licensing
Ensuring your professional activities is crucial. We recommend getting business insurance to safeguard your company from unexpected situations. Research the different types of insurance to ensure proper coverage. Depending on your business, you might need liability insurance, employers’ insurance, and professional insurance.