Open Your Company in the UK with BM Partner
Are you ready to explore the opportunities that the United Kingdom has to offer? BM Partner is here to turn your vision into reality! We understand the challenges and opportunities that come with international expansion and are here to support you every step of the way.
Opening a company abroad is a complex process that can expose you to legal risks and penalties if not managed correctly. This is why we always recommend seeking the advice and assistance of expert consultants. A specialised consultant can offer detailed and personalised insight, ensuring that your business complies with all local regulations and maximises the opportunities for success.
Why the United Kingdom?
The United Kingdom offers a dynamic and stimulating environment for businesses, with unparalleled access to financial markets, a vast network of international talent, and one of the most liberalised and competitive economies in the world.
Opening a company in London means positioning your business at the heart of a vibrant ecosystem that fosters innovation, growth, and global success.
How We Can Help You
BM Partner is your strategic ally in opening your company in the UK. We offer step-by-step assistance through the following services:
- Strategic Consulting: Market analysis and optimal positioning for your business.
- Bureaucratic Management: Support in navigating the UK’s tax system, including company registration and regulatory compliance.
- Local Contacts: Access to our established network of local contacts, including legal advisors, accountants, and market consultants.
Contact us today to find out how we can help you take the significant step towards internationalising your business.
How to Open a Company in London
Opening a company in London presents an exciting opportunity for entrepreneurs from around the world, thanks to the UK’s dynamic business environment and competitive tax regime. However, navigating the process of starting and managing a business in England requires an understanding of local regulations and bureaucratic requirements. That’s where we come in to guide you through the essential steps to open a company in London and the rest of the UK.
To open a company in London, it is necessary to register the business with Companies House, the UK’s company registration office.
Specifically, you will need to register the company as an overseas company, which applies to all businesses intending to establish a presence in the UK or conduct regular business activities in the country. However, certain types of businesses, such as partnerships and unincorporated entities, cannot register as overseas companies in the UK.
To register a company, you must complete and submit form OS IN01 to Companies House within one month of starting business operations.
How Much Does It Cost to Open a Company in the UK?
The costs for registering a company in the UK for non-residents can vary depending on several factors, such as the type of business structure chosen, the services required, and any additional fees or taxes.
For example, opening a Limited company (Ltd) does not require a minimum capital, while opening a Public limited company (Plc), which involves publicly traded shares, requires a minimum share capital of £50,000, with at least 25% of the nominal value paid up.
Here are some of the most common costs associated with opening a foreign company in London:
- A registration fee of £20.
- A non-resident UK company must have a registered office in the UK, which can be a physical or virtual address. The cost of a virtual business address ranges from £10 to £200 per month, depending on the provider.
- The non-resident UK company must meet the UK’s accounting and tax obligations. Additional fees and taxes may apply to specific activities of the company, such as VAT registration fees or employer registration fees.
How Much Tax Do Companies Pay in the UK?
Companies in the UK are subject to Corporation Tax, which is the corporate income tax. The standard rate of Corporation Tax is competitive compared to other countries. Companies can also benefit from various tax incentives and reliefs for research and development, investment in capital assets, and other specific activities. Therefore, it is essential to consult a tax advisor to understand the specific tax obligations and saving opportunities.
The table below clearly shows how the Corporation Tax rate works for companies based in the UK.
| Profit Band | Fiscal Year 2023/2024 |
|---|---|
| Small profits rate (companies with profits under £50,000) | 19% |
| Main rate (companies with profits over £250,000) | 25% |
| Marginal Relief lower limit | £50,000 |
| Marginal Relief upper limit | £250,000 |
| Standard fraction | 3/200 |
| Special rate for unit trusts and open-ended investment companies | 20% |
When taxable profits can be attributed to the exploitation of patents, a lower effective tax rate applies. The rate is 10%. Profits can include a significant portion of trading profit from the sales of a product that includes a patent, not just income from patent royalties.
Additionally, if a foreign company has a branch in the UK and exceeds the turnover threshold of £85,000 within 12 months, it must register for VAT, if it trades in goods or services subject to the 20%, 5%, or 0% rate.
What is Marginal Relief?
The Standard fraction is a technical term used in the calculation of Marginal Relief for businesses in the UK, specifically in the context of Corporation Tax. This fraction is applied in the formula that determines Marginal Relief, the tax relief granted to companies whose profit level falls between two specific thresholds: the lower and upper limits for Marginal Relief.
Marginal Relief is designed to provide a gradual transition between the lower tax rate for small profits and the main rate for higher profits, preventing companies within this intermediate profit range from experiencing sudden increases in their tax due. The Standard fraction is used to calculate the exact amount of Marginal Relief a company is entitled to, based on the difference between its profits and the lower limit for the relief.
For the year 2024, the Standard fraction is 3/200. This specific value is used in the Marginal Relief calculation formula to determine the amount of tax relief the company can claim. The fraction helps establish how much Corporation Tax is reduced for companies with profits between £50,000 (the Marginal Relief lower limit) and £250,000 (the Marginal Relief upper limit), facilitating a smoother transition between the two tax rates.
How to Register as a Sole Trader in the UK?
Registering as sole trader in London means becoming self-employed, which is different from "opening a company." In this context, registering for VAT in the UK has become quite complex after Brexit.
The simplest form of registration is as a sole trader, which is a self-employed individual. This involves an individual registered to pay taxes on their personal earnings. Registration is done with His Majesty’s Revenue and Customs (HMRC) and allows the person to file a tax return at the end of each fiscal year.
HMRC then calculates the amount of tax and national insurance contributions to be paid based on the tax return submitted.
To register as self-employed, you only need a National Insurance Number (NIN). This is an alphanumeric code that allows access to social security services, assigned to all residents.
In contrast, opening a company does not require a NIN and is a relatively simpler process for non-residents in the UK.
How to Apply for a NIN to Register as a Sole Trader in the UK
To apply for a NIN, if you live in the UK, you must submit an application directly to HMRC via this page.
Once you have your NIN, you can register as a sole trader. You can live abroad and be a self-employed individual subject to UK taxation only if you already have a NIN. Currently, it is only possible to apply for a NIN if you reside in the UK.
In short, you need to already have a NIN to register as a self-employed person living abroad. Therefore, due to the inability to obtain a NIN if not residing in England, it is not possible to register as a sole trader without being a resident.
Opening a Company in London: The Role of BM Partners
Opening a company in London requires navigating a complex maze of legal, tax, and market regulations. This intricate process can easily become overwhelming and risky for those without specific experience.
Turning to professionals like us means entrusting your project to experts who manage every aspect of opening and positioning your business in the UK market, from legal consultancy to marketing strategy.
Our expertise ensures that your entry into the UK market is not only compliant with all regulations but also optimised for long-term success. Avoid unnecessary risks and maximise your opportunities by relying on those who have made this process their speciality.