FEATURES OF UNITED KINGDOM PRIVATE COMPANY
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 kilometers (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. is strategically located off the Northwest coast of Continental
Europe and has excellent communications; it has three major international
airports in Heathrow, Gatwick and Manchester with extensive worldwide
connections. Recently the U.K. was physically joined to the mainland
Continent by the opening of the Channel rail tunnel link which boasts
frequent train services for passengers and cars to Paris and Brussels.
The U.K. has signed double taxation treaties with 100 countries
and thus enjoys the most extensive double taxation treaty network
in the world.
FEATURES of U.K. PRIVATE COMPANY
Taxation
The corporation tax rates are the lowest in the European Union.
Tax is levied at 20% on a U.K. company which has net profits under
300,000. For profits between 300,000 and 1.5million
there will be an effective marginal rate of 32.5% and a tax rate
of 30% 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 recognised
"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 (32.5%/30%/20%) 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.
Shareholders
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.
Directors
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 bly 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 90,000 are exempt from this requirement and those
with turnover of less than 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.
Timescale
Incorporation of a new company can take up to three weeks but ready-made
companies are available for immediate use. However, a premium can
be paid of USD500 for a 48 hour incorporation service.
Capital
A minimum issued capital of USD2,000 is required.
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.
Secrecy
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.
REGISTRATION FEES
Our registration fee for a limited company with a standard share
capital is USD1200. The fee covers first year licence fee, first
year registered agent fee and first year registered office fee.
Annual maintenance cost for second year onward is US$800.
Full nominee services and bank accounting opening services are
available, please call +852 2341 1444 or send email to info@bycpa.com
for a quotation. |