Purposes of using a UK company

UK companies can be used for a variety of different business purposes:

- receiving income, dividends, commissions, royalties, etc from UK or overseas sources

- used as legal entities for entering into commercial contracts

- making payments to suppliers or employees in the UK or worldwide

- in international tax planning /tax mitigation (certificates of tax residence)

- as international Holding companies for holding investments in foreign subsidiaries free of income and capital gains tax, subject to conditions

- as UK sales and marketing vehicles, for information gathering or public relations purposes

- to obtain an EU VAT registration to avoid irrecoverable VAT for international trading

- as vehicles to raise trade finance such as invoice factoring or discounting

- as vehicles to raise business loans or funds on the capital markets or for channelling investments into the UK or internationally.

- as “agency” or “nominee” companies to perform administration functions such as invoicing in international trading in goods or services.

- to hold and protect valuable intellectual property and real estate.

This list is not exhaustive and UK companies can be used for many other business functions.

UK companies may be formed within a day,cheaply and with minimum hassle. Only one director and one shareholder is required and these can be the same person. RKG Consulting can assist you to incorporate a UK company, set up a UK bank account and obtain a UK VAT registration number (if required) very quickly indeed.   For further information regarding the benefits of using UK companies read the articles below.

  • UK tax exemption for foreign dividends

    From 1 July 2009 foreign dividends received by a UK company are exempt from UK corporation tax.  Previously dividends received from non-UK companies had to be “grossed-up” and were subject to tax in the UK with a tax credit given for foreign tax suffered under appropriate double tax agreements.  The changes are very welcome and the main points are: - [...]

  • UK International Holding company

    A UK company, having  “substantial” shareholdings in subsidiaries which are part of a “trading” group, can qualify for capital gains tax exemption when the investments are sold.  This important CGT exemption is subject to the following conditions: 1. The shareholding in the subsidiary must be at least 10% of the voting power of the subsidiary. 2.  The investment must [...]

  • UK companies for EU VAT registrations

    UK companies can be employed as vehicles for VAT registrations for goods or services supplied to or received from abroad. Example (trading in goods): A Chinese company incorporates a UK company A and A obtains a VAT registration.  A can despatch goods to business customers in other EU countries without adding VAT provided it quotes their VAT numbers on its invoices and goods leave the UK [...]

  • UK “transaction” companies

    When UK non-resident or offshore parties wish to conduct transactions at short notice, a UK company could provide the solution.  For example a Chinese company wants to buy a consignment of goods available at a good discount in Germany and wants to sell it to a customer in Sweden it could channel the transaction via a [...]

  • UK “nominee” or “agency” companies

    UK “nominee” or “agency” companies can be used for international trading in goods or services for non-UK resident beneficial owners.  The most important consideration to bear in mind is that these arrangements cannot and must never be used if UK resident beneficial owners or UK situs goods or assets are involved. An example might be South African resident beneficial [...]

  • UK “royalty” receiving companies

    As the UK has one of the widest tax treaty networks in the world, UK companies are ideal for use as vehicles to receive and pay out royalty income in a tax-efficient manner.  For example, under the US DTA the rate of withholding tax on royalties can be reduced to zero.  Under the EU Interest and [...]

  • UK Limited Partnerships

    Limited Partnerships registered under the UK Limited Partnerships Act 1907  are very popular in  international tax planning arrangements because the “partnership” itself is tax transparent and taxation is levied only at the level of the “partners” rather than the entity.  So for example if the partners or members are resident outside the UK, manage the LP [...]