Running A UK Limited Company From Abroad

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The pandemic had a massive worldwide effect, not just in terms of business but how we want to live and work. Commuting to offices isn’t as necessary anymore and remote working is taking over. 

People are no longer physically bound to their workplaces, which opens up a world of possibilities. If you can work from anywhere – would you stay put? 

If you’re wanting to start a limited company, or already own one, you don’t need to remain in the UK. It’s possible to set up and keep running a UK limited company from abroad, but it’s always best that you get all the facts and consult a professional before you make that jump. 

To help you get started, this guide will cover the main points you need to consider to set up and run your UK limited company from another country. 

Can you run a UK limited company from abroad? 

Yes, you can absolutely own and run a limited company or sole trader business in the UK without being in the country. There are some advantages to being inside the UK, such as being able to meet clients or travel to destinations within the UK.

But if your business doesn’t physically require you to be in the UK, i.e. if you can operate entirely online, then there’s nothing stopping you from running a UK limited company from abroad. If you’re a plumber, you’re going to struggle to fix sinks from Spain. 

What are the legal compilations of running a UK limited company from abroad? 

Whether you’re running a limited company from the UK or outside, you’ll be subject to the same obligations such as: 

  • Registering for (and paying!) your Corporation Tax. 
  • Filing annual statements to the Companies House, as well as annual accounts at the end of the financial year. 
  • Submit your company tax return to HMCR every 12 months. 

Now, paying the right tax can be a tricky one to figure out, even if you’re based in the UK full time. So being based in another country adds an extra layer of complexity and fun for you. 

In terms of your business tax, you will be responsible for and pay the same amount of Corporation Tax, regardless of where you are based. This is a tax that is applied to all of the profits that your company makes. 

As an individual, your personal tax situation depends on your specific circumstances and if you’re classed as a UK resident or not. We’ll cover what classes as a resident in the below section. 

If you’re classed as UK resident, you will have to pay income tax on your entire income. If you’re not a UK resident, you will still be eligible for paying income tax on the earnings you make while inside the UK. The rest of the year, you’ll be subject to tax rates and rules of the country you’re a resident of. 

We’d always recommend talking to an accountant to make sure that you’re not overpaying on your tax, particularly if you’re spending time in multiple countries. If you haven’t got an accountant yet, take a look at our best-rated online accountants here. 

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Am I a UK resident or non-UK resident?

Your residential status depends on how many days you spend inside the UK during the tax year (April-April). 

You are classed as a UK resident if: 

  • Your only home is in the UK and you spend a minimum of 30 days there in a tax year;
  • Or, you spend more than 183 days in the UK during the tax year.

If you’ve just moved abroad, you might be subject to split-year treatment. That means that you’ll be classed as a resident for part of the year, and non-resident for the remainder. For the part of the year that you’re classed as a UK resident, you will be liable for paying Income Tax. 

Forming a UK company as a non-resident?

You’ll need to use a UK company formation that is experienced in providing company formations for non-residents.

We recommend 1st Formations as they offer a ‘Non-Residents Package’ that includes everything you need including UK business banking, 12-month cancellation protection, London registered addresses with International mail forwarding.

Click here to view the Non-Residents Package

Running a contractor limited company outside the UK

If your limited company hires contractors, the good news is that you won’t be subject to the new IR35 regulations. 

As we’ve covered before, the new IR35 legislation is designed to prevent tax avoidance through employees pretending to be contractors.

That doesn’t mean that you can falsely claim that your employees are contractors – but it does ease some red tape and pressure from you when determining your contractor’s employment status. 

It will also mean that you don’t have to store extra records or evidence of their contract with your business to prove their financial status, giving you more time and freedom to hire contractors. 

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Can you have a UK business bank account if you’re outside the UK? 

Business bank accounts need to be opened in the place of your residence. So if you’re not a UK resident, you won’t be able to open a UK bank account. 

This isn’t the end of the world though, as you’ll be able to open a business bank account from your new country of residence. However, when it comes to transactions in the UK, it’s certainly more favourable to have a UK bank account for your clients and business.

It will also help you avoid potential currency exchange fees or charges, so you might want to consider keeping your UK residency a little longer. 

In some cases, you might be able to open a UK bank account without being a UK resident using chains such as HSBC, Lloyds Bank, and Barclays. This, however, is provided you can do a face-to-face interview and hold a UK passport or driver’s license. 

Can you register a UK limited company outside of the UK? 

Yes, you can register and form a UK limited company if you’re outside of the UK. There are just two requirements that you need: 

  • A Registered Office address. This must be a UK address that can receive mail and communications and cannot be a P.O Box Address. 
  • At least 1 director and 1 shareholder (who can be the same person but in both instances must be over 16 years old).

Now, before you get fixed on the address part, let’s put your mind at ease here. You don’t need to live in the UK or own property to have a registered UK office address. Instead, you can pay a fee to create a registered office address that’s managed by a 3rd party, allowing you to form a limited company while ensuring that you receive all official communications. 

Most company formation agents will be able to offer this service as part of their formation packages. This is a great way to get your business set up quickly, without having to jump through the red tape yourself. To find out more about setting up a Limited Company as a non-resident, read our guide here. 

Want to jump in and form your business? Take a look at our top-rated company formation agents here. 

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Can you move a UK limited company to a different country? 

No, you can’t just move a UK limited company to another country. As soon as a company is formed in the UK, it will remain registered there until the day it’s dissolved. 

But that doesn’t mean there aren’t other options. 

One option could be to dissolve your UK limited company, then start again by forming a new limited company in another country.

This way does come with a lot of downsides though, as it’s technically a different company you’ll lose all you have so far and will have to start fresh. 

You can, however, register new companies using your existing name – while keeping your UK company. This is an option that a lot of big international corporations take, having separately registered companies as part of the same ‘group’.

This option is normally for bigger companies with the resources to manage separate international branches of the same company and might not be in your pipeline just yet. 

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Running a UK company from abroad

To recap, you can run and form a UK limited company while you’re living outside the UK. In order to form the company, you will need a registered business address inside the UK, which you can purchase from a company formation agent when setting up your business. 

Even though you’re outside of the UK, you will still be liable for certain rules and obligations such as: 

  • Paying corporation tax on all profits that your limited company makes;
  • Filing annual statements to the Companies House, as well as annual accounts at the end of the financial year;
  • Submit your company tax return to HMRC every 12 months. 

In addition, you may also be eligible for paying UK income tax depending on your residency status and how much time you spend inside the UK during the tax year. If you need help making sure that your tax is right, we’d recommend speaking to an accountant.

As ever, if you need more business advice, tips, or inspiration – you’ll find it all at Business4Beginners

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Business4Beginners has been advising new businesses owners since 2013. The founder, Paul Bryant, has created, grown and sold several successful businesses and remains the editor and fact-checker of all content published on the site.
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