General Information

The United Kingdom (“U.K.”) comprises England, Scotland, Northern Ireland and Wales and is one of the fifteen member states of the European Union. It has an area of some 244,100 square kilometres (94,250 sq. miles) with an estimated population in excess of 57 million. London is one of the world’s leading centres for banking, insurance and other financial services; lying between New York and Tokyo it is the third leg of the world’s capital markets. Not the least of its attractions is that it is a politically stable English speaking country.

The U.K. has signed double taxation treaties with 100 countries and thus enjoys the most extensive double taxation treaty network in the world.

The UK Company

For the purposes of this information sheet a U.K. company is incorporated in England or Wales and registered in Cardiff, Wales. Details on incorporating in Edinburgh, Scotland or Belfast, Northern Ireland are available on request.


The corporation tax rates are the lowest in the European Union. Tax is levied at 21% on a U.K. company which has net profits under Pounds 300,000 and a tax rate of 33% is levied where the profits are over this figure. Generally speaking, a U.K. company is taxable on its world wide income at the rates indicated above. However, a U.K. incorporated company may still be classified as non-resident for tax purposes, and therefore non taxable in the U.K. on non U.K. source income, if it is managed and controlled from a country with which the U.K. has signed a double taxation treaty which contains a recognized “tie-breaker clause”. By careful selection of the country from which the U.K. company is managed it may therefore be possible to create a non-taxable U.K. entity. For example, Portugal has a suitable tax treaty with the U.K. so a U.K. company managed from Madeira (Madeira being part of Portugal) would neither be taxable in Madeira nor the U.K. It is important to note that such a U.K. company would not qualify to receive benefits under the tax treaty signed by the U.K. but might qualify for Portuguese tax treaty benefits so the major benefit of this structure is to create a non-taxable entity which has the added respectability of a U.K. persona.

Another recent innovation Section 246S of The Taxes Act 1988 (as inserted by Schedule 16 of The Finance Act 1994) creates the U.K. International Headquarters Company (“IHC”). This status may be accorded to ordinary U.K. companies which are at least 80% beneficially owned by non-residents. An IHC is an extremely useful vehicle for the collection of foreign dividend income as, in general terms, a full credit is given against U.K. tax for any tax paid on the remitted profits before arrival in the U.K. Thus as long as the dividend income has already suffered tax at a rate higher than or equal to the applicable UK rate (33%/21%) no U.K. tax will be payable on that income either on arrival or on distribution. For example, a Danish subsidiary of a U.K. IHC would pay tax on its profits at 34%. If the Danish subsidiary distributed profit by way of dividend to the IHC parent no further tax would be levied on arrival in the U.K. because a credit would be given for tax paid in Denmark. This makes the U.K. IHC an extremely attractive holding company vehicle for investment into Europe or otherwise and in most cases will be more attractive than competitive structures available through the Netherlands, Austria, Switzerland etc.


A U.K. company must have a minimum of one shareholder who may be a corporate body or an individual. Details of the shareholders appear on public record but anonymity may be retained by the use of nominee shareholders or holding companies.


A U.K. company must have at least one director and a company secretary. A sole director cannot also be the secretary. The Director can be an individual or a company. If there is more than one director, one of them can also be the secretary but, as U.K. company law is complex, it is strongly recommended that a professional secretary with relevant experience is appointed. Details of the directors appear on the public file but anonymity can be retained by the use of third party professionals.

Annual Reporting

Generally a U.K. company must appoint an auditor and audited accounts must be filed with the Companies Registry within 9 months of the financial year end. In a large number of cases companies with sales of under Pounds 90,000 are exempt from this requirement and those with turnover of less than Pounds 350,000 need only produce abbreviated accounts with a special accountant,s report. An annual return giving details of directors and shareholders is required for all companies.


Incorporation of a new company can take up to three weeks but ready-made companies are available for immediate use.

Company Name

The Registrar has the power to refuse registration of any name which he considers undesirable or too similar to an existing company. A name will not be allowed if it is misleading – for example, if it suggests that a company with small resources is trading on a great scale or over a wide field. Names cannot ordinarily be allowed if they suggest connection with the Crown or Government Departments.

Local Requirements

As a matter of local company law the company MUST maintain a registered office address within the U.K. and must also appoint a company secretary who, for practical reasons, must be resident in the U.K. We would normally provide these services as part of our domiciliary service fee.


There are no specific laws relating to the unauthorised disclosure of information on a U.K. company, its directors or owners but U.K. law recognises the common law duty that professionals have towards their clients to keep their affairs confidential.


All U.K. companies which have a turnover of Pounds 46,000 per annum or more must register for VAT (VAT is a sales tax chargeable throughout the European Union) and must prepare and file quarterly VAT returns. All U.K. companies which are required to produce accounts must file them in a timely fashion if fines and other penalties are to be avoided.