The UK is the leader of foreign investment in Europe. The UK is a hotbed of activity for foreign investment in Europe, especially from American companies. The UK offers vast business opportunities for investors. Low labor costs and high returns make it an attractive investment destination.

• The easiest place to establish and run a business is Europe: According to a World Bank study, it takes only 13 days to establish a business in the UK. The World Bank has ranked the UK first in Europe and sixth in the world to operate business
• An internationally competitive tax environment for foreign investors: the UK has the lowest corporate tax at 28 percent which is the lowest in the G7. The highest personal tax bond at 40 percent is also the lowest in the EU.
• Most Flexible market in Europe: According to a World Bank report, the UK stands at second place to employ workers.
• Least barriers to entrepreneurship: OECD has identified the UK as second in the world for Product Market Regulation. It also ranks second for the least barriers to entrepreneurship and third for the least barriers to trade investment in the world.
• Stable Political Environments: Transparency International rates the UK high on the transparency list. The UK is the country with the least corruption in the world. It achieves a higher rating in comparison to the US, Japan, Germany and France.
• Leading Financial Center: London which is world’s largest financial center is situated in the UK.

Advantages in Doing business in the UK

• Company law – UK company has an excellent reputation worldwide, with English law forming the basis for company law in many countries worldwide. Incorporating in the UK couples legal flexibility with clear governance rules in one of the world’s largest and most reputable trading economies
• Taxation – Dividends received from an EU resident underlying company will be free of withholding tax under the EU parent/subsidiary directive. UK has over 100 double taxation treaties including the US, Japan, China, Germany, France, Singapore and Canada. These treaties provide several advantages to support business with UK headquarters, particularly the reduction of withholding tax on dividends.
• Simple to manage – Foreign entrepreneurs wishing to register a UK company can easily handle the administration remotely as Companies House allows many fillings made online. A UK private companies requires only one director and one shareholder.

Disadvantages in Doing business in the UK

• No more corporate directors – UK companies may only appoint individuals as directors from October 2015. Previously, corporate directors were permitted as long there as at least one individual director on the board. All existing corporate directors must be removed from boards of UK companies by October 2016
• Privacy – Companies registered in the UK are required to keep a list of “people with significant control” (PSCs), which effectively makes beneficial ownership information public. The threshold for considered a PSC is 25% beneficial ownership. There is also a public register of directors and shareholders.
• VAT –  Value added tax (VAT) is charged on the value of supplies of taxable goods and services made in UK, including some exports to European Union countries.

Business Friendliness Environment Index (EUROPE) by Novasigma – 2017

Novasigma has published an annual BFE-E (Business Friendliness Environment – Europe) -index for 2017. European economies are ranked from  1-51 based on their business friendliness. The rankings are determined by sorting the aggregate distance to frontier scores on 20 topics each consisting of several indicators, giving equal weight to each topic. The rankings for all countries and economies are bench-marked to January 2017

The World Banks “Ease of doing business ranking”: United Kingdom

New businesses registered in 2015: 537,658 new limited liability companies

Who can start a new business in the UK:

• Any person or legal entity who can provide documentation required by the law for incorporation

Who can own property or shares of the UK company:

• Any legal entity (Companies, private individuals, trust or fund)

Who can act as a director or member of the board:

• Any person who can provide documentation required by the law for incorporation

Business entities in the UK

• Private company limited by shares (Limited tai Ltd)
• Public limited company (PLC)
• Property management company
• Company limited by shares
• Unlimited company
• Limited Liability Partnership (LLP)
• Community Interest Company (CIC)
• Charitable Incorporated Organization (CIO)
• Right to manage company (RTM)

Opening a bank account for a UK company:

• Incorporation documents and articles of association (Certificated in UK)
• Registration certificate (Certificated in UK)
• Board of directors meeting minutes
• Proof of identity, address and skills of signatories
• List of shareholders and directors (Certificated in UK)
• Certificate of Good Standing (if company is older than 1 year)

Public register of shareholders, directors or signatories:

• Directors: Yes
• Owners: Yes
• Signatories: Yes

Accounting and reporting regulations in the UK:

• companies must file all records
• companies must file seperate tax returns
• audit requirements for large companies

How funds can be withdrawn from company

• Company may transfer money to another company based on sales of services and goods.
• Company can lend money to another company and / or person given that loan agreement with minimum interest and payment terms have been made. Owners cannot owe money for the company in the end of the book year.
• Company can pay dividends from it´s own capital to shareholders after end of the book year
• Company can pay salary to it´s employees given it has registered in the Tax Administration´s employer register. Employer is obliged to pay tax withheld at source from all wages paid to employees, along with making employer´s social security contributions.
• Company can pay tax free allowance, such as kilometer allowance for using they own car, per diem and meal money, to owners in order to cover their temporary business travel expenses as defined in the official Decision of the Tax Administration on Allowances for Travel Expenses
• Company can pay meeting allowances for its directors, members of the board and owners
• Profits may be transferred (if certain requirements are met) between group companies through group contribution system
• Company can invest in shares, funds or real property.

Can you transfer UK company to another jurisdiction?

• No

How to terminate business in UK?

• Company may be sold
• Skipping renewal of company yearly registration
• Filing bankruptcy
• Company liquidation

Expats moving to the UK do so for various reasons. Whatever your motivation may be, your move to the UK holds the advantage that you won’t need to learn a new language from scratch. InterNations has lots of useful information on moving to the UK, from life in London to UK visa regulations.

Many of its characteristics make moving to the UK an attractive option. As a business destination, the United Kingdom, composed of England, Scotland, Wales, and Northern Ireland, has one major asset which outweighs its counterparts in other European countries with similar living standards and working conditions: the language. After all, English is the international language of business and trade taught in schools across the globe.

The UK is a densely populated country, with a considerable share of its roughly 64.5 million people living in the south of the UK. Just over 80% of the UK’s population consists of city dwellers. Great parts of Scotland and Northern Ireland are less urbanized and less affluent leading to people leaving for the UK’s southern regions.

London — The Center of Everything

The country’s capital, with 8.6 million inhabitants being by far the largest city in the UK, is the seat of the national government. It is also the leading financial and commercial center of the EU: in 2014 London hosted 40 percent of the European headquarters of top companies worldwide.London is truly multi-cultural with people moving to the UK’s capital from all over the world, and generally an exciting place to be. Its vibrant arts and entertainment scene caters to all tastes, from classical to popular, mainstream to fringe, and from retro to avant-garde. Needless to say, the party animal in you will not be disappointed.

Despite its size, London’s green spaces make it quite a pleasant place to live. The soaring prices for property, however, are one of the reasons why many families — even those with an above-average income — prefer to live in the suburbs of Greater London when moving to the UK.

UK TIER 1 INVESTOR VISA:

• Tier 1 Investor visa is intended for those who are willing to invest in the UK no less than £2.000.000.
• Investor visa, or a residence permit on the “investor” category or Tier (1 Investor) – can be formalized for the whole family (spouses and children under 18).
• Initially, the visa is issued for three years and four months (in the case of investments of £ 2.000.000, with the following extension for two years).
• It is possible to travel outside the UK on an investor visa up to 180 days a year.
• It is important that the applicant for an investor visa to the UK does not need to confirm his/her knowledge of the English language and does not need to prove the availability of funds for the family that resides in the UK.
• The candidate is deemed to be wealthy enough in order not to work.
• There is no need to provide his/her plans for business development to the immigration office, in contrast to the candidates applying for an entrepreneur visa.

The terms of obtaining permanent residence and citizenship of the UK depend on the amount of investment, namely:

1. Investment of £ 2.000.000: the permanent residence is obtained in 5 years and the citizenship of UK on the 6th year.
2. Investment of £ 5.000.000: the permanent residence is obtained in 3 years and the citizenship of UK on the 5th year.
3. Investment of £ 10.000.000: the permanent residence is obtained in 2 years and the citizenship of UK on the 5th year.

Along with the investment of personal funds, it is possible to use borrowed funds provided by the British financial institutions.

According to the immigration rules, along with the investment of personal funds, the investor has the ability to use borrowed funds that should be obtained in the British financial institutions:

• A loan of £2.000.000 may be obtained under the condition that “investor” has the financial means of no less than £4.000.000.
• A loan of £5.000.000 may be obtained under the condition that “investor” has the financial means of no less than £10.000.000.
• A loan of £10.000.000 may be obtained under the condition that “investor” has the financial means of no less than £20.000.000.

Funds and assets owned by a spouse or a partner can also be considered in the evaluation of private means of the “investor”.

Conditions for obtaining Tier 1 (Investor) visa:

• The candidate has free financial means in the amount of £ 2.000.000 and is ready to invest at least £ 1.500.000 of them in the UK economy through the purchase of the British governmental / corporate bonds, shares of UK companies or through the investment of funds in the existing companies registered in the UK.
• Investments in real estate or means placed on the general deposits in the bank are not taken into account.
• The remaining amount of £500.000 can be managed by the candidate on his own discretion. For example, he can buy property, or deposit the money in a bank account.
• In making an assessment of the candidate financial means the funds and assets owned by his spouse, partner in a civil marriage or same-sex partner can be considered.

Or

• The candidate can take a bank loan in the UK financial institutions for investments worth no less than £2.000.000. In this case, it is necessary to show the availability of financial means of no less than £4.000.000.

UK TIER 1 ENTREPRENEUR VISA:

• Tier 1 Entrepreneur Visa is created for those who want to open a new business in the UK or buy an existing one (or a share in it).
• Residence permit on the Tier (Entrepreneur) category – can be formalized for the whole family (spouse and children under 18).
• Initially, the visa is issued for three years and four months with the following extension for two years, the permanent residence is obtained in five years and citizenship of the UK on the sixth year.
• It is possible to travel outside the UK on entrepreneur visa up to 180 days a year.
• The entrepreneur can open or buy any UK company of the four existing types (or a share in it): The private company with limited liability, the public company with limited liability, the private company with unlimited liability, the private partnership with limited liability

Conditions for obtaining Tier 1 (entrepreneur) visa:

• To know English language at the appropriate level: The minimum level of language knowledge should correspond to the level B1 of the pan-European CEFR scheme.
• Availability of funds for residence: The applicant must provide evidence that he has the sum of money with a minimum required balance on his bank account. There must be no less than £ 3.100 during the last three months, in that case the amount for each family member is defined as the £ 1.800. The candidate cannot use the part of the investment money to prove the availability of funds for residence.

Investment of £ 200.000 in business in the UK:

The applicant does not need to have his own funds in the amount of £ 200.000. This amount of money can be obtained from the third parties, namely:

• from relatives living either in the UK or abroad
• from anut other investor staying in the UK or abroad
• from any legal entity staying either in the UK or abroad

Need more details about residency program? Please call us or fill in the form and we will get back to you shortly!

Freedom Index: United Kingdom

Corporate taxation in UK 2016

Residence – A company is UK resident if it is incorporated in the UK or its place of central management and control is in the UK

Basis – A UK resident company is subject to corporation tax on worldwide profits and gains, with credit given for overseas taxes paid. Foreign profits and losses (including those from certain capital assets) arising from a permanent establishment (PE) of a UK resident company may be excluded by making an irrevocable election. The effect of the election may be deferred where the PE has incurred a loss. Anti-diversion rules based on the CFC rules may restrict the profits that can be excluded from the charge to UK tax by virtue of the election. A non-resident company is subject to tax only in respect of UK-source profits, which include the income of a UK PE of the nonresident, income and certain gains from UK real estate, certain UK-source interest income and gains on assets used for purposes of a PE’s trade.

Compliance for corporations:

• Tax year – The tax year is the shorter of 12 months of the period for which the accounts are prepared
• Consolidated returns – All companies file separate tax returns. However, losses may be “group relieved” between UK group companies (broadly, where one is a 75% subsidiary of another or both are 75% subsidiaries of the same corporate parent in terms of share ownership, rights to income and rights on a winding up, taking account of direct and indirect holdings). There are other group rules that apply to capital gains allowing, for example, the intragroup transfer of assets at no gain/no loss for tax purposes or the transfer of gains/losses between group members.
• Filling requirements – The UK operates a self-assessment regime. Large companies pay tax in quarterly installments starting in month seven of their financial year (as from April 2017, the first quarterly installment will be due in month three of the financial year). The tax return is due to be filled within 12 months of the period. Electronic filling is mandatory for all company tax returns.
• Penalties – Companies are liable to a fixed penalty of £100 for failure to file a tax return by the due date, plus an additional £100 if the return is not submitted within three months of the due date. Further penalties may apply to returns filled at least six months late. Tax-geared penalties can be sought for matters such as tax returns that are carelessly or deliberately incorrect. Interest is paid on late paid tax.
• Rulings – UK tax legislation includes a number of anti-avoidance provisions for which advance statutory clearance may be sought. Also, under a non-statutory clearance procedure, the UK tax authorities’ view of the tax consequences of specific transaction can be sought, on a named basis, with full disclosure, where there is both commercial significance and material uncertainty.

Tax authorities: HM Revenue & Customs

Personal taxation in the UK 2016

Personal taxation basis:

• Individuals who are resident and domiciled in the UK are subject to tax on their worldwide income and gains.
• Different treatment may apply where a person is UK resident but not UK domiciled

Tax Residence:

• A statutory residence test (SRT) applies that is based on a combination of physical presence and connection factors with the UK and other jurisdictions
• Domicile is a concept distinct from residence. An individual’s domicile status may be determined by the domicile of his/her parents or can be acquired by choice.
• UK resident but not non-UK domiciled taxpayers can enjoy favorable tax treatment in respect of income and assets outside the UK.
• New rules are expected to be introduced as from 6 April 2017 that restrict non-domiciled status for tax purposes, including a “deemed domicile” rule for income tax, capital gains tax and inheritance tax purposes after 15 years of residence, and individuals born in the UK and UK domiciled at birth will be UK domiciled for tax purposes whenever they are resident in the UK.

Filling status:

• Individuals file tax returns separately, irrespective of marital status

Income tax rates in the UK

• Income tax is charged at progressive rates. For 2015-2016, the rates are as follows:

• As from 6th April 2016, a new annual dividend tax allowance of GBP 5,000 has been introduced. The new rates of tax on dividend income exceeding the allowance will be between 7.5% – 31.8%
• Currently, dividends from UK companies and many non-UK companies attract a non-payable tax credit. (The credit is not available where the individual’s holding in a non-UK company is 10% or more and the company is located in a jurisdiction that has not concluded an appropriate tax treaty with the UK). No credit will be available as from 2016-2017.

Social security payments in the UK:

• National Insurance Contributions (NIC) are payable by employers, employees and self-employed individuals. For example, for 2015/16, weekly paid employees pay NIC at a rate of 12% on weekly income between GPB 155 and GPB 815 and 2% on income exceeding this amount. For employers, NIC is payable at a rate of 13.8% on all income excess of GPB 156 per week for 2015/16.
• Self-employed individuals pay NIC at a rate of 9% on annual income between GPB 8,060 and GPB 42,385 and 2% on the excess, together with a fixed charge of GPB 2.75 per week for 2015/15 (GPB 2.80 for 2015/16)

Inheritance/estate tax in the UK:

• Inheritance tax is charged on property passing on death, certain gifts made within 7 years of death and some lifetime transfers (e.g. to most trusts).
• Where due, inheritance tax is payable on assets in excess of GPB 325,000 (2015/16 and 2016/17) at a rate of 40% (20% for certain lifetime transfers).
• As from April 2017, a family home allowance will be introduced, provided the property is left to descendants. This will be added to the existing GPB 325,000 threshold, meaning the total tax-free allowance for a surviving spouse/civil partner will be GPB 1,000,000 by 2020/21. The allowance gradually will be withdrawn for estates worth more than GBP 2 million.
• Transfers between spouses and civil partners, during life or upon death, generally are exempt from inheritance tax unless only the donor spouse has a UK domicile.
• For non-UK domiciled individuals, only UK property is subject to inheritance tax, although long-term residence (17 out of the last 20 tax years, reducing to 15 years as from 6 April 2017) can result in deemed UK domicile (for inheritance tax purposes only).

Net wealth/net worth tax in the UK:

• No

Compliance for individuals in the UK:

• Tax year is 6th April to the following 5 April
• Tax on employment income is withheld by the employer under the Pay As You Earn (PAYE) system and remitted to the tax authorities. Tax on income not subject to PAYE and capital gains tax is self-assessed. If an individual is required to file a tax return, it must be filed by 31 October (or 31 January, if filling online) after the tax year. Payment of tax is due by 31 January after the tax year. Payments on account of tax may be required on 31 January in that tax year and 31 July in the following tax year.

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Services for corporations interested in UK

• Consultation and advisory (business, tax, legal) services before incorporation / during your business operations in UK
• Assistance in incorporation process: Tailor made company formation or shelf companies available
• Administration services available for new companies incorporated through Novasigma

For corporations operating in UK

• Banking and financial solutions for an UK company
• Accounting and Audit services for an UK company
• Legal services for an UK company

For individuals and families interested in UK

• Consultation and advisory (tax, legal) services before re-located to UK
• Assistance in immigration process when moving to UK (residency permanent, work permit, tax residency)
• Incorporation and administration services for your privately held UK holding company

For individuals and families who hold the UK residency

• Banking services in UK for private persons
• Local and international accounting services for UK tax residents
• Local and international legal services for UK residents

• Due diligence process
• Foreign Market entry & Supplier search
• Business Plans & Descriptions
• Development & Capital Advisory
• International Tax Planning
• Funding & Investor Search
• Business Restructuring via Offshore entities
• Exit Strategy & IPO
• Problem solving

To find out more about our consulting and advisory services in UK please contact us

Incorporation services in the UK

• New company formations in UK (England, Wales & Scotland)
• Ready-Made UK companies
• Company Closures and liquidations in UK

Company administration in the UK

• Legal registration address service for a UK company
• Company secretarial service for a UK company
• Nominee director services in the UK
• Nominee shareholder services in the UK

Business services in the UK

• Virtual office services in UK
• Hosting services
• Real estate in UK (offices, trade facilities, industrial)
• Recruitment services and Temporary workers in UK
• Marketing, advertising and software development in UK
• Sales, research and booking services in UK
• Customer support and back office services
• Logistic services
• Cyper security services

Accounting software available for the UK companies through Novasigma

• Sage

Some of the common domestic accounting services we provide in the UK include

• Bookkeeping and accounting
• Invoicing and payments
• Annual accounts
• Monthly Reconciliation
• Monthly financial statements (including balance sheet and income statement)
• Payroll services
• Income and tax return
• Management accounts

Value Added Tax (VAT)

• VAT registration
• Advice on VAT scheme options
• VAT returns and declarations
• Intra-EU VAT consulting
• EU-VAT claim management

Audit

• Annual accounts in view of an annual audit and attend accounting audits

Accounting services

Our partners offer legal services in the UK for all Novasigma Clients including companies and their owners and directors

Novasigma has built in the UK a team of lawyers, associates and legal advisers to assist our clients with a business and tax planning, overseas business operations, risk management and other legal matters. Primarily focused on business transactions, Novasigma Accounting & Law corporate attorneys are a great asset to a small and large businesses. With a background on corporate law, our corporate lawyers and legal advisers have an in depth knowledge on the transactions that may put your business at risk of litigation. These include contracts and negotiations, taxation laws, business structuring, buy/sell agreements, and intellectual property, among others.

To find out more about legal services in UK please contact us

Banking services in the UK

• Business bank accounts
• Personal bank account opening for business owners
• Payment service providers
• Investment solutions
• Alternative banking solutions

Financial services in the UK

• Debt collection services
• Invoice funding & cash flow solutions
• Factoring
• Leasing
• Wealth management

Insurance services in the UK

• Insurances for corporations
• Insurances for business owners and their families

To find out more about our banking, financial and insurance services in UK please contact us

• Tax residency in the UK
• Citizenship from the UK
• Immigration service for foreign entrepreneurs/employees when moving to the UK (for Novasigma business clients only!)

To find out more about our immigration services in the UK please contact us