How to set up an offshore company in the UK

More and more entrepreneurs and companies are interested in operating from abroad. Thanks to its economic stability, clear legal system and business flexibility, the UK has become one of the main destinations for those looking to expand their business internationally. Today, we explain you how to set up an offshore company in the UK.

In this article, we explain everything you need to know to open your offshore company in the UK in a simple and safe way.

What is an offshore company?

An offshore company is an entity you can register in a country other than where you live. It probably sounds strange or unfamiliar, or even a bit on the borderline of legality, but it is actually a legal and quite common practice to optimise taxation, protect assets or facilitate international trade.

In the case of the UK, the term offshore is commonly associated with the creation of a Private Limited Company (LTD).

Advantages of setting up an offshore company in the UK

Opening an offshore company in the UK has some advantages that we will explain below.

Firstly, as is often the case with companies registered in the UK, you will enjoy a higher reputation internationally. People always has a great perception of a UK company.

On the other hand, they benefit from a competitive tax regime. This is because corporation tax in the UK is one of the lowest among the major economies. It is currently around 25%.

As we have explained in other articles, registering your company in the UK is a simple and quick process. You can do it completely online and in just a few hours. Moreover, you do not need to be a UK resident to do it.

Last but not least, it is very easy to open an international bank account.

How to set up an offshore company in the UK: steps

We will follow the steps explained in previous articles. Firstly, choose a name for your company.

You must define who will be the directors and shareholders. In order to register an offshore LTD in the UK, you will need at least one director and one shareholder. They can be the same person and, yes, it can be you.

It is important that the company is registered at a UK address. This will be your registered office address. Remember that you can hire it if you do not have your own physical address.

You need to apply for incorporation by filling in the application form available on the Companies House website. Here you will include the company name, registered office address, details of directors and shareholders and the shareholding structure.

After that, you will have to pay the corresponding fees. We are talking about prices ranging from £12 to £40, depending on how you decide to carry out the registration.

Finally, remember that you will receive a Certificate of Incorporation once the registration has been approved. This document is issued by the Companies House.

Important tax aspects

Now it is time for the more tedious aspects that you need to keep in mind at all times if you want to set up an offshore company in the UK.

If you are managing and controlling the company from a country other than the UK, find out where you are resident for tax purposes. This will prevent you getting into trouble with the Inland Revenue. However, if you operate mainly within the UK, your company will have to pay local taxes.

As we have already advised you here, we recommend that you have a tax adviser to help you avoid unpleasant situations.

A series of practical tips

Banks can be much more demanding when it comes to the requirements for opening your bank account associated with an offshore company. So be prepared for this.

Also, bear in mind that even if the company is not trading, you will have to file annual accounts with His Majesty’s Revenues and Custom. Also, since 2016, the UK has required reporting of PSCs or Persons with Significant Control in the company.

Conclusion

Opening an offshore company in the UK is a great strategy to expand your business internationally, protect assets or take advantage of a stable economic environment. By following the right steps and complying with legal obligations, you can run your business smoothly and securely.