Is It Mandatory to Have Tax Residency to Entrepreneur in the UK?

Opening a company in the UK attracts more and more international entrepreneurs thanks to its business-friendly environment, competitive tax system, and simple incorporation process. Many ask the same question: Do you need UK tax residency to register a company?

The answer is no. You can set up a company in the UK without becoming a tax resident. However, you should understand several key points related to company management, taxation, and legal compliance.

The UK lets individuals and foreign legal entities register a company without UK tax residency. Non-residents can start a Limited Company (LTD), the most common business structure, by meeting a few basic legal steps.

Key requirements to open a UK company without tax residency:

• Use a registered office address in the UK.

• Appoint at least one director who lives in or outside the UK.

• Hire a registered agent or use a professional formation service.

• Submit your registration to Companies House, the official UK business registry.

Tax Residency vs. Registered Office Address

While you don’t need UK tax residency to open a company, you must have a UK-registered office address. This address doesn’t have to be your personal or business location—you can use that of an accountant or company formation agent.

Tax residency doesn’t determine your ability to incorporate a company in the UK, but it does affect where the company pays taxes and what legal jurisdiction applies.

Where Does the Company Pay Taxes If the Owners Don’t Reside in the UK?

A company registered in the UK generally pays UK Corporation Tax if it qualifies as a UK tax resident. This happens when:

• You incorporate the company in the UK, or

• The company exercises its central management and control from the UK.

If you run the company from abroad but make strategic decisions within the UK, tax authorities will treat it as a UK tax resident and tax it on worldwide profits. On the other hand, if you manage the company entirely from outside the UK, tax authorities may view it as non-resident for tax purposes—even if it’s registered in the UK.

That’s why you must consider double taxation risks and review existing tax treaties if your company operates in multiple jurisdictions.

What About Foreign Shareholders and Directors?

Shareholders and directors can live abroad and still manage a UK company without legal issues, as long as the business meets all UK tax and accounting requirements.

Keep in mind that dividend payments or other financial distributions to foreign shareholders may trigger personal tax liabilities in their home country, depending on local tax laws.

Benefits of Opening a UK Company Without Tax Residency

• You gain access to a stable, reputable business environment.

• You can complete company registration quickly, often within 24 hours.

• You may structure the company as offshore if you operate exclusively outside the UK.

• You enjoy flexibility as an international entrepreneur without needing to relocate.

• Your business projects a professional image, building trust with partners and clients.

Key Points to Consider If You’re Not a UK Resident

• Work with an accounting or consultancy firm specialized in non-resident UK companies.

• Make sure you have a valid registered office address in the UK.

• Understand how tax laws apply based on your country of residence.

• Determine if the company is considered tax resident in the UK or elsewhere.

• Comply with all annual filings and tax returns required by Companies House and HMRC.

You don’t need UK tax residency to open a company. Although, you must follow legal requirements and understand the international tax implications. You should determine where your company exercises control and how it will pay taxes on its profits to stay compliant and make informed strategic decisions.

If you plan to form a UK company from abroad, UKStartCompany can guide you through legal obligations, ensure compliance, and help you optimize your global tax strategy.