Small Business Advice

Can an overseas investor or non-UK resident own a UK company?

14 Apr 2014

The good news for overseas investors and non-UK nationals is that there are no restrictions on a non-UK resident setting up a UK company. However, there are some things that you need to know before starting to trade in the UK.

We are highly experienced accountants and business advisors - if you are thinking of setting up a UK business from abroad, we can help in many ways, not just with company formation or accounts.

Setting up a UK limited company and business

In today’s interconnected and global world, business is increasingly international.

For many established non-UK businesses or investors, it makes sense, sometimes for logistical, financial or other reasons, to have a UK base and a UK trading entity. The UK’s current low corporation tax at 20%, incentives for Research and development and highly respected financial and legal system are make the UK an attractive place to do business.

If you do decide to start and set up a UK business, whether for a new business idea or venture or as a UK based subsidiary, there are many important options and considerations. These will or may include :-

  1. The need to set up a UK bank account
  2. Employing staff
  3. Understanding the regulatory and tax system
  4. Seeking or negotiating strategic relationships with UK based individuals or companies, whether by way of joint ventures, distribution or agency agreements
  5. Market research on competitors or deep industry insights and analysis
  6. Borrowing money and ensuring your financial projections and business plan maximise your chances of successful raising finance

We are accountants who can assist in a highly cost effective and efficient way with the typical accounting tasks and compliance you will need. We also have a team of in-house professionals, some accountants and other non-accountants, with expertise and experience in all of the above areas. We would be delighted to speak with you about any of your requirements.

Opening a UK business bank account

In common with personal bank accounts, when you apply for a business bank account you will need to provide proof of identity, such as a passport or driving license, and proof of address, such as a utility bill, bank statement or council tax statement.

For business bank accounts you will also need to provide some details about the business, including the business name, registered address and the nature of the business. Some banks will also require information about when you incorporated, your projected turnover, financial forecasts and potential funding requirements.

UK banks may ask for a business plan

Banks often ask for a copy of your business plan, which they may hold on file. This can help when applying for an overdraft or bank loan, since it should include information about your company’s profit margins, target market and growth forecasts. If you need a business plan, we can help.

No UK address and not a UK resident – what are the options to set up a business and bank account?

 If you do not reside in the UK you will obviously be unable to provide the required proof of UK address.  However, some banks may allow you to open an account if some of the company’s shareholders are resident in UK.

If your application for a UK business bank account is declined due to residency requirements another option is to apply for an offshore account in the Isle of Man, Guernsey or Jersey, which can be denominated in sterling and operated in much the same way as an onshore account. Barclays, NatWest and HSBC offer offshore business bank accounts, but it's important to remember that they each have their own eligibility requirements, the application process is not necessarily easier than applying for an onshore account, and they do have the right to decline your application.

UK business agent to run your UK company?

Another option for running a UK business effectively and efficiently and to simplify other technicalities, is to have your business run by UK based individuals.

If you are considering this option, we would he happy to discuss with you how we might help. As an example, you may be worried about risk and control on a day to day basis, even if you know and largely trust your UK representatives. You may want help or advice in finding te right business agents or distributirs to sell your products or services in teh Uk and need due diligence to find the right business partners. We can offer you an additional layer of security and a professional, objective and independent set of eyes and ears.

We are experienced in setting up ways to monitor and protect and as accountants, we offer an independent, experienced oversight which can spot potential issues before they may arise.

Salaries and Dividends for non-UK shareholders

To achieve the most favourable tax treatment, most company directors also set themselves up as employees of the company so that they are able to benefit from the personal tax allowance (which is currently approximately £10k). This means that you can enjoy a tax-free salary of £10,000 on top of your tax efficient company dividends.

National Insurance NumberHowever, in order to become an employee of the company you need a National Insurance number - and in order to get a National Insurance number, you must have the right to work in the UK.

This is usually not a problem for anyone who is a citizen of an EU country, but for business professionals from countries outside the EU you must have a UK work visa before you can apply for an NI number.

However, if you don’t qualify for a British work permit it is worth pointing out that you can still be a shareholder or director in a UK company, even without an NI number; you simply cannot benefit from the £10,000 tax-free salary available to employees. 

Chris Conway

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Managing Director, Accountant & Corporate Finance Specialist

0207 043 4000

About the author

Chris joined Accounts and Legal as Managing Director in November 2015. Chris’s primary role is ensuring the firm runs smoothly on a daily basis, supporting the growth of its entrepreneurial clients and delivering the firm’s own ambitious growth objectives. 

Having qualified as a Chartered Accountant (ICAEW) in general practice with a Top 20 firm in 2010, Chris quickly chose to specialise in corporate finance. During his 5 years Chris worked on over 70 transactions involving SME’s, from company valuations and restructures to substantial equity and debt fundraisings. He also advised on the sale and purchases of businesses, both to trade buyers and financial investors, providing advisory and due diligence services.

  

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