Can I Start a Business in the UK If I Am a Non-resident?

There were over 670,000 new businesses incorporated in the UK in the tax year of 2018/19 (source). And that doesn’t include sole traders and freelancers!

By March 2019, Companies House had over 4 million companies in the register.

Companies House reports how many company registrations belong to overseas corporate bodies with a physical presence in the UK (it was 12,241 by the end of March 2019), but we couldn’t find any information on how many companies were registered in the UK by non-residents.

Either way, the fact remains: You can absolutely and 100 per cent register and run a business as a non-resident and non-citizen of the UK.

Here are all the details:

Minimum requirements to register a UK business as a non-resident.

No matter where you live or what passport you hold, you may register a business in the UK. You do, however, require a physical address inside the UK.

Official correspondence will be sent to that address.

There are a number of ways to get around this problem if you do not live in the UK, including:

• A friend’s address
• A family member’s address
• Property that you have purchased or are renting in the UK
• A virtual office address.

Many companies that offer business registrations also provide a registered address that your company can be linked to. In Pearl Accountants’ case, we also handle any communications from HMRC directly so that any urgent tax-related questions and problems can be dealt with quickly and efficiently.

Restrictions on starting a business in the UK as a non-resident

If you start a business in the UK as a non-resident, it doesn’t automatically give you the right to work in the UK. If you come from a country where you require a working VISA to work in the UK, then you will still require that VISA to work in your company inside the UK, even if the company is registered in your name.

Before Brexit, the right to work in the UK was simpler if you lived elsewhere in the EU. This is changing as of 30 June 2021.

The same applies to EU citizens who wish to reside in the UK — things were much simpler before Brexit. Check this link for further details.

Business bank account for non-residents

It is not necessary to have a business bank account for the company if you are not a resident in the UK. Although, it is always advisable to set one up as it makes your accounting easier.

If you do decide to get a business bank account, it is possible to obtain a GBP account entirely online through a company such as TransferWise or Revolut.

Pearl Accountants is partnered with Revolut, and our clients can receive benefits if they sign up for Revolut through our website.

You might need insurance.

If you will be hiring employees, then you’re required to have Employers’ Liability Insurance. Some professions are also required to have Professional Indemnity Insurance which covers you against any liabilities incurred during the execution of the duties of your profession.

It’s a good idea to have Tax Investigation Cover because an investigation by HMRC can be crippling if you are not prepared for it, even when you are not guilty. This type of insurance doesn’t have to be expensive.

The tax investigation insurance we offer here at Pearl Accountants will cover you for up to £100,000 in legal fees, and we defend you in court as well.

Know your taxes and tax laws

As a foreign resident, you will need to pay tax on every penny you take out of the company — there is no personal allowance for foreign residents unless you have a work VISA.

The amount of tax you will pay on dividends also depends on which country you are a tax resident in — there are different tax treaties in place that alter the amount of tax you will need to pay on dividends both in the UK as well as in your country of residence.

Speak to your accountant or tax adviser for details.

You are obligated to follow all the necessary tax filing laws in the UK.

As a company registered in the UK, you will need to comply with certain tax and other filing regulations each year and/or quarter. These filings are quite extensive so we’ve written a separate, detailed blog post about it, which you can read here: Filings Your Small UK Business Must Know About.

Many companies, even those set up by UK residents, leave the responsibility of these filings up to their accountants or to the company that handled their registration in the first place. This way, you can get on with business instead of being mired down in endless paperwork, and possibly even suffering a penalty as a result of missing an important filing date.

Summary

Yes, non-residents can set up a company in the UK. You need a registered address in the UK but don’t need to live here. You will need employers’ insurance if you hire employees and possibly might need other insurance policies as well. You need to know your taxes and when to file the respective paperwork — this is most easily dealt with by your accountant.