Setting up a UK company

London red telephone boxes
When opening a company in the UK, you need to set up a legal entity and familiarise yourself with your intellectual property rights.

How to get started

1. Think about your structure
Choose the right legal entity for your business to be successful in the UK.

2. Get registered and insured
Gather your tax registration and insurance documents.

3. Talk to banks early
Start the process as soon as your entity is formed.

4. Register your seconded employees
Apply for a national insurance number or a unique tax reference.

5. Plan ahead
Establish a calendar of compliance activities for your UK entity.

London is very easy to work in and a very business-friendly city. The process was a lot less complex than we expected. It took just six months from the initial idea to opening the office.
Will Fleming
President and CEO, MotionPoint

Which legal entity?

There are various ways to trade in the UK but the most common types for international companies are as a:

UK limited company

A company structure owned by shareholders and run by its directors. Quick and inexpensive to set up, with a corporate tax rate of 19%.

Pros:

  • Fast and affordable setup.
  • A company structure that is widely recognised and respected.
  • Directors and shareholders are protected by limited liability.
  • Only needs one director.
  • Managers and owners can be different people.
  • Can quickly raise capital by issuing shares.
  • Tax incentives available.
  • No withholding tax on dividends.
  • No minimum share capital.
  • If your limited company is not a subsidiary of a parent company, it could raise funds via the tax efficient Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS).
  • Your overseas parent company won’t be liable for UK tax.

Cons:

  • You will pay corporation tax on any worldwide profits and gains.
  • Your accounts may need to be audited if your business is over a certain size.
  • As you have to file returns to Companies House, information on your directors, accounts and persons of significant control (PSC) will be publicly available.

Visas

Which visas can you use to hire overseas talent for your limited company?

 

  • Skilled Worker sponsor licence – (can be stand-alone).
  • Global Business Mobility (Senior or Specialist Worker sponsor licence) – must be linked to an eligible overseas business.
  • UK Expansion Worker sponsor licence – must be a wholly owned UK subsidiary or branch that hasn’t yet started trading.
  • Innovator Founder visa route – for scalable businesses with a product or service that is unique to the UK market.

Learn more about UK visas.

Limited liability partnership


Easy to set up and transparent for tax, this option can be used for an Innovator visa and a Tier 2 visa sponsor.

Pros:

  • Simple setup.
  • Partners decide how to divide profits and when to pay themselves.
  • LLPs pay no corporation tax. Instead, each partner pays tax on their own profit share.
  • Efficient repatriation of profits.
  • Can have corporate partners.
  • Can have both designated and non-designated partners.

Cons:

  • LLP is not as widely recognised and understood as a company.
  • LLPs requires at least two partners for setup.
  • Only corporate partners may obtain R&D incentives.
  • Accounts are publicly available through Companies House.
  • Must disclose all persons of significance.

Visas

Which visas can you use to hire overseas talent for your LLP?

  • Skilled Worker sponsor licence – can be stand-alone.
  • Global Business Mobility (Senior or Specialist Worker sponsor licence) – must be linked to an eligible overseas business.
  • Innovator Founder visa route – if setting up a scalable business with a concept that is completely new to the UK market.

Learn more about UK visas.

UK establishment (branch)

The place of business or branch of an overseas company within the UK. Effectively, it’s a direct extension of the overseas company, officially registered at Companies House and the tax authorities to trade.

Pros:

  • You can offset tax losses in the jurisdiction of your home company.
  • You don’t need to have a UK audit of your accounts.
  • As it’s a branch of an existing company, you may be able to access better credit terms than if incorporating a new company. If the share issuing company has a UK permanent establishment, it could be compatible with EIS and SEIS tax relief (conditions apply).
  • Your business may qualify for UK R&D relief.

Cons:

  • Registration is more complex than setting up a Ltd company.
  • Does not have separate limited liability from the home company.
  • Home company is exposed to UK risk and UK branch is exposed to foreign risk.
  • You’ll need to file publicly group accounts with Companies House, even if you don’t file them in your home country.
  • If your home country has a higher Corporation Tax rate than the UK, you won’t qualify for the low UK rate of 19-25%. A branch could be seen as a temporary or early-stage business activity by investors or clients.
  • Must be officially registered at Companies House.

Visas

Which visas can you use to hire overseas talent for your limited company?

  • Skilled Worker sponsor licence – can be stand alone.
  • Global Business Mobility (Senior or Specialist Worker sponsor licence) – must be linked to an eligible overseas business.
  • UK Expansion Worker sponsor licence – must be a wholly owned UK subsidiary or branch that hasn’t yet started trading.
  • Innovator Founder visa route – permanent establishment may not be suitable for this route.

Learn more about UK visas.

Get help with setting up your company in London.

Contact us for more information on how to get started.

Intellectual property

There are several forms of intellectual property rights (IPRs) in the UK, which can protect a wide variety of different creations including brand names, logos, inventions, designs, text or images.

The main forms of IPRs in the UK are:

Form of protection Examples of what can be protected Duration 
Registered trademarks* Your brand names, business names, domain names, social media handles, logo and product names (but also, potentially packaging, colours, shapes and the like). 10 years, but can be renewed potentially indefinitely.
Rights in passing-off Your brand names, domain names, social media handles, goodwill and reputation, including packaging. Potentially indefinitely
Registered* and unregistered designs Packaging, the whole or part of a product, 3D shape or configuration, product shapes, graphic designs and surface decoration. Generally 3 to 25 years depending on which form of design.
Copyright and database rights Investment in databases, text (such as product descriptions), images, pictures and drawings (such as design documents, marketing materials and product packaging), films, music and software, consumer and sales details. Generally 70 years from the death of the creator.
Patents* Inventions. Ones which are essentially a business model are harder to protect. 20 years.
Confidential information Any commercially sensitive information such as customer or supplier information, know-how, manufacturing processes and product launches. Potentially indefinitely.

*Registration is required for a right to arise.

Content provided by Moore Kingston Smith, Taylor Wessing and Oury Clark. This information is intended for general guidance only. You should always seek professional advice.

How London & Partners can help

Our team offers free advice to potential investors, from startups to established companies on how to register a company in the UK. We can:

  • Connect you to legal experts specialising in setting up UK entities.
  • Introduce you to intellectual property specialists who can advise you on how to protect your inventions, designs and ideas.
  • Offer advice on setting up in London.

More resources

Contact us