The information technology industry, long before the COVID restrictions, assumed the remote work of most employees. However, any business has a place of registration – the jurisdiction whose rules the company adheres to and where it pays taxes. The UK is definitely at the top list of locations where it is worth registering an IT company.
Why is this country so good for tech companies? Experts from International Wealth helped us to understand this issue. The experienced professionals of this website offer many services in the United Kingdom, including UK company registration with bank account.
So, let’s find out about the benefits of this jurisdiction for IT businesses.
Why choose the UK?
The UK is not directly associated with information technology, but in recent years many startups have preferred to have local registration. For IT, access to a vast clientele and security of doing business is essential. And the UK provides these advantages. Let’s consider in detail how this happens.
The place of registration of a company working in IT says a lot about its principles. A self-respecting business will not go to a classic offshore zone – it is undignified. A successful company has enough money to pay taxes at any rate, and the pursuit of maximum savings (given that customers and employees are unlikely to stay at the place of registration) is perceived by some potential partners as an activity close to illegal or immoral.
Great Britain is a solid state known for strict order within the country. Official registration here means that you will not find fault with the company – it meets the highest requirements of decency and honesty.
A promising company in the IT industry must have a sane office in the jurisdiction it represents. Maintaining an office in the UK is not cheap, but registering a company here comes with a number of advantages.
Starting a company from scratch in the UK is a pretty simple task, and with the help of experienced experts, you can even implement it remotely. Do you want a loan on favorable terms from a British bank? Young businesses are supported here. Are you in need of a skilled workforce? There is plenty of it here. All this is complemented by super high-speed Internet, excellent transport, and government support.
Submission of all reports and communication with the state for an IT company will not go beyond the scope of daily duties – these procedures are carried out online.
The UK tax system is rigid: the rates are high, and severe penalties follow for the slightest evasion. However, the IT industry can enjoy numerous benefits leaving a legitimate way to pay less. A simple example: a company that has not sold goods or services in the UK can file a null declaration.
The pound sterling and the UK banking system inspire confidence in the future. However, British banks are not loyal to potential clients who are not connected to the UK in any way, and an IT company with a local registration would help solve the problem.
The UK government understands that new companies are potential contributions to the budget, but a young IT startup needs time to get stronger first. Therefore, the registration of a company, as well as the subsequent submission of reports, is straightforward, and the intervention of state control is minimal.
Company types
UK law provides for many different forms of business organization, but PLCs and LLPs are in particular demand:
- Private Limited Company (PLC) – registration of an office in the UK is required, however, GBP 100 is enough for the authorized capital. Individuals and legal entities can be shareholders, while the shareholder can be the only one. Shares are issued of any type. The director is an individual without the requirement to be local. Their functions are allowed to be performed by the shareholder. Shareholders and directors have the right to hold meetings outside the UK, but company documents are only kept within the country. The amount of PLC income tax directly depends on the profit for the year – 20% if it is less than GBP 300 thousand, and 26% if the amount is more. However, there are legal ways to reduce tax payments.
- Limited Liability Partnership (LLP) – an ideal form of company organization for those who do not want to pay local taxes when registering in the UK. This opportunity is available if the company does not conduct business in the territory of the jurisdiction and does not receive income here. The requirements for the organizers are the same as in the case of PLC, but there cannot be less than two partners. They are allowed to be foreigners, both individuals and legal entities.
Registration procedure
From the moment the documents are submitted to the successful registration of an IT company, it usually takes 1-2 business days, but please note: the British regulator is very strict and will return papers with which something is wrong for revision.
Documents are required at a minimum: for an individual – a passport and proof of residence, for a legal entity – registration papers and passports of the founders. The mandatory presence of the founders is not required, and documents can be submitted online.
What is important is the company’s name: you need to come up with several of them, and the regulator will discard those that do not fit. Names cannot duplicate existing ones – there cannot be two companies with identical names. In the end, the abbreviation of the form of the business organization must be indicated. The name is written only in Latin letters and should not contain offensive or discriminatory messages. Foreign words in the title are not prohibited, but their translation is required.
Given the potential difficulties in filling out the paperwork correctly, foreign founders usually turn to professional intermediaries, such as International Wealth, for help. Returning papers for revision, the regulator does not explain what is wrong, so help will not hurt, especially if you want to complete the procedure the first time.