A limited company is a kind business structure in the United Kingdom which can offer a lot in comparison to running a business in your country. However, not every type of business can benefit from this legal entity.
Which types of business can operate in the UK regardless of their owner’s place of residence?
Although there are several restrictions regarding this matter, there is a multitude of branches of trade for which moving to the UK is possible and profitable. This group includes:
- Programmers and web developers,
- Musicians and other artists,
- And many others.
Basically, if you work as a freelancer, or your company operates via the Internet, there is a great chance you will benefit from both decreased taxes and simplified bureaucracy that the United Kingdom has to offer. The same can be said about firms that do not have any physical headquarters outside of the UK.
Restrictions regarding limited companies
An LTD company is a great solution for many types of business. However, there is one major limitation regarding moving companies to the UK. That is, firms that want to take advantage of this option cannot have a permanent establishment outside of the UK. That means, when a certain model of business requires, for example, an office or a shop in your country, it is against the law to create a limited company for it. It may be seen as an intentional avoidance of taxes by your local tax authority.
Examples of companies that require a permanent establishment are:
- Retail shops,
- Restaurants and bars,
- Hairdressers and beauty parlours,
- And other similar types of business.
To sum up, if you have a physical place where most of your business activity happens, you should consider other solutions than moving company to the United Kingdom as a whole.
What if you need a warehouse?
It is worth mentioning that not every physical place outside of the United Kingdom owned by a company is considered a permanent establishment. Imagine you are running a business that imports some goods and sells it through the mail. It is obvious that you need a storage facility in which you will keep your merchandise. Does that mean that an LTD company is not for you? Definitely no. A warehouse is not necessarily a permanent establishment in the eyes of the law. Look for a Double Taxation Convention between the UK and your country of residence to learn more.
This article has shed some light on the matter of which branches of business can be moved to the UK. However, every situation should be looked into individually. If moving a whole company to England is not a correct solution for you, there are other options. Sometimes it is profitable to register a limited company with a permanent establishment in your country or to move only a part of your company to the UK. Contact us or make an appointment for a consultation and we will help you choose a solution best suited for your kind of business.