The United Kingdom is a prestigious country to conduct business in. But what exactly are the perks behind this fame? And should you consider an offshore company formation in the UK?
Let’s buckle up, and enjoy a ride explaining why you should opt for the UK.
1. The perks of incorporating a company in the UK
Before all else, let’s take a look at all the benefits that are associated with forming this type of company in the United Kingdom.
Open and liberalized economy. The United Kingdom’s political system might puzzle you a bit. It is a parliamentary democracy under a constitutional monarchy.
It means that while there is a monarch – right now is Queen Elizabeth II, that takes place as the head of state, the queen is not the head of the UK government. The decision-making process lies in the hands of the Prime Minister.
It is no exaggeration to say that the UK’s economy is one of the best dynamic and terrific in the world. Thanks to the open and liberalized policies and protocols of the UK government, the UK stays on the top of the best places to conduct business worldwide.
Ease of incorporation and doing business. This can be contemplated as the biggest perk when it comes to forming a company in the UK. According to World Bank, the UK is ranked 8th in the Ease of Doing Business Index (data of April 2021).
On top of that, the requirements to set up a new business in the UK are relatively low when compared to other prestigious countries, especially other European countries, around the world.
Favorable tax treaties. Most people are afraid that doing business in the UK after Brexit might be a hindrance as there are no more tax treaties, no free trade agreements, etc.
However, it is evident that Brexit has almost no impact on the UK’s double tax treaties as these are not based on EU Membership. Therefore, investors can rest assured that the UK still benefits from the tax treaties that are already signed.
If your plan is to form a company in the UK to do business with, let’s say, Finland. You can enjoy multiple benefits that the tax treaty has to offer, including the double taxation on corporation income tax between the two countries.
High-quality and skilled workforce. Another reason to opt for the UK as your incorporating destination is its skillful workforce. The UK offers more than 30 million employees which is one of the largest workforces that countries in Europe have to offer.
Plus, the labor costs in the UK are moderately low compared to other developed countries in the region such as France, Germany, Netherlands, etc.
Strategic location and excellent infrastructure. We all know that the UK is no longer a member of the EU anymore. However, the UK is still the gateway to other European countries and the rest of the world.
With many international port cities such as Port of Felixstowe, Port of Immingham, and Port of London, UK remains a crucial link in the global supply chain, providing an ideal environment for doing business in terms of logistics.
The UK also focuses on changes and improvements of its infrastructure including energy, transportation, waste management, and telecommunications.
Low maintenance fees. Believe it or not, the United Kingdom remains one of the most ideal destinations for low-cost jurisdictions.
Minimum share capital requirements. Last but not least, there is completely no minimum share capital requirement.
2. Popular uses of an offshore company in the UK
Like many other companies in other jurisdictions, the company uses in the United Kingdom remains as the following classic purposes:
- Holding company. Most investors opt for this type to hold the controlling stock or membership interests.
- Commercial & trading company. Where can you find a better place to build your base than the United Kingdom – one of the leading financial hubs with excellent infrastructure?
- Asset protection. This sort of company is a great vehicle to protect your assets. You can rest assured that your properties such as houses, cars, and money, are separated and safe-guard from any business activities.
3. The challenges of forming a company in the UK
As ideal as it may seem, incorporating a company in the UK cannot be sugar-coated. The following are the challenges that you, as a business owner, have to face:
- The British culture. Cultural barriers are never an easy-peasy challenge to overcome. British people can appear as cold or overwhelmingly formal to start with.
Still, post-work drinks are considered major work-bonding activities. Though you don’t really do business within the UK, you still have to work with them every once in a while.
- Tax returns. Though being one of the most developed tax systems in the world, the UK tax system is kind of tricky and byzantine. It can take an excessively long time to complete your tax returns, including but not limited to corporate income tax, PAYE obligations, or council charges.
Though the perks generally outweigh the challenges, it is advisable to thoroughly consider all aspects before taking any further steps. It is advisable to talk to experts for pieces of advice.
4. Key takeaways
All things considered, these are the most crucial perks that might get your attention when forming a company in the UK:
- Dynamic and liberalized economy that offers businesses the best opportunity to thrive.
- One of the best Ease of Doing Business in the region compared to other European countries.
- Enormous network of tax treaties even after the big Brexit at the end of 2020.
- Top-notch workforce that is highly skilled and well-educated.
- Strategic location and exceptional infrastructure that are well-developed for decades.
5. Company formation with BBCIncorp
Through our UK Company Formations service, you can set up your very own company as an LTD or an LLP company, the two most common types of business entity in the United Kingdom for foreigners. BBCIncorp even provides business banking support to give you a head start in your incorporation process. Check out our service and drop us a message via email@example.com for further consults and support!