8 Reasons To Form A Company In The UK

Why form a company in the UK and not your own country?

Here are 8 reasons why forming a company in the UK is the smart move. It can be as easy, if not easier, than doing it in your home country.

1. Low Staffing Overhead

You only need one person to form a limited company in the UK. This person is you. You can be director and shareholder. The shareholder is the owner and the director is the person who executes decisions for the company.

Other jurisdictions require you to have a company secretary or other person besides yourself. Some offshore destinations try to make maintaining a company easy but they don’t let it have only one person as the responsible party. Which leads to the next reason why the UK is better …

2. International Directors Are Acceptable

You can live in a foreign country and be the sole director of your UK company.

Foreign countries often stipulate that there has to be a local resident who is a director or other responsible person. This person has to be paid. This can increase your yearly maintenance costs significantly. You can be running at a loss before you’ve made a single deal.

Not so in the UK.

Your company has to have an address here but you can live abroad.

3. Low Fees

Companies House charges less than £20 GBP to set up at company at their site and the same when you file your annual return.

Other jurisdictions offer offshore company formations to make money. They are small countries and don’t have much income. So they charge yearly fees to maintain the existence of your company. Often you have to work with a specialist formation agent to set up and maintain your company. This greatly increases the ongoing costs.

The UK just wants inward investment and tax receipts. So, if your UK company hasn’t made a profit or is dormant, you will not be charged fat fees simply because it exists. You can put your money towards marketing and making a profit!

4. Ease Of Setup

If you have a minimal understanding of business terms you can set up a company yourself at the Companies House website, or, get a formation agent like ourselves to do it: https://www.registeredaddress.co.uk/company-formation/

All you need to know is who the director and shareholder is to be (you) and how many shares and at what value you want to issue, typically: 1 share @ £1 ea.

5. Ease Of Maintenance

You file 3 annual returns to the UK government to maintain your company:

1 administrative, to Companies House
1 financial, to Companies House
1 financial, to HMRC (the UK tax department)

More info here: https://www.registeredaddress.co.uk/blog/annual-returns-avoid-the-nightmare/

They make it pretty simple, with an online filing service. This service can submit the two financial returns at the same time, which saves a lot of bother: http://online.hmrc.gov.uk

6. Low Local Taxation

Ok, the UK doesn’t offer super low corporate taxation, but it’s not bad. Currently it’s 20% at the lowest rate. This is worth paying because your company is registered in a …

7. Stable Society

The UK doesn’t do revolutions. Well, not in the past few hundred years. The English like to queue up and obey whatever laws are written by parliament. It is very rare to have serious civil disturbance. This writer recalls the Miner’s Strike and Poll Tax rebellions as being relatively civilised. In the first it was a minority, local grievance which was put down, and in the second, the fact the the middle classes got involved was enough for the government to cave in and change the system.

8. Good International Reputation

Britain has invaded most countries in the world and been at war with the rest. Strangely, it is not as universally detested as such acts might warrant. Go to diverse countries like India, Japan and Brazil and it’s likely the locals will find Britain quaint and interesting in a way that Germany, well, would not be!

There is still a lingering respect for British notions of fair play, good humour, legal process  and civility which means that a company registered here can take on some of that respect.

What Documents Do You Need To For A LTD?

What documents do you need to form a UK limited company?

Technically, the answer is: none!

That’s right, anyone can set up a UK Limited company if they have a debit card and an internet connection. One can go to the Companies House website, and enter the details of your pet cat, if you wish.

‘ILikeChasingRodents Ltd’ can be set up in about twenty minutes. Companies House do not check your bona fides. It would take far too long. They assume that 99.999% of people who set up a company are who they say they are.

Company owners typically want to reap the benefits of having a limited company; tax savings, limited liability, division of profits, etc. They’re usually not messing around!

Having a company means that you have to submit annual returns. If you don’t, you get fined. So on a list of Japes That Are Fun To Do, setting up a limited company probably won’t be high up.

Mr. Tiddles’s owner set up a company for him, but he will have trouble opening a bank account. Any cheques Mr. Tiddles gets for successful rodent capture will not easily be banked, as Mr. Tiddles won’t be on the voter registration list, doesn’t have a credit history, is not a bill payer and thus won’t be given a bank account.

Credit card applications might be easier, as lenders are keen to get one hooked on credit. Pre-paid debit cards are also an option, as long as someone else handles the card; cats do not have opposable thumbs.

But bank accounts, no. Bankers are fat cats, but they won’t give accounts to the furry kind.

Tiddles’ human master would find the following useful in setting up a company, for himself:


Some bits of info from the passport can be entered into the company formation form, but having a passport or any other ID is not necessary. Information like father’s forename and eye colour can be used instead. This is so a stakeholder can absolutely identify himself to Companies House in the future, if he needs to.

Residential address

You don’t need to have proof of this, but you do need to have one. You need an address where letters can be sent to you by Companies House and HMRC. This address can be abroad. It is not accessible online to curious parties; only the security services and credit-referencing agencies can request it.

Registered Office

This is the official address where your company ‘lives’. It has to be in the UK.  This is where companies like RegisteredAddress.co.uk are useful; they provide you with a Registered Office address, for a fee. It saves you having to use your home address. 

This address is publicly viewable from the Companies House website.

(Note: Scotland is a separate country as far as Companies House is concerned;  a company which has a Registered Office in Scotland can’t subsequently move to England.)

Director’s Service Address

You don’t need to have ‘proof’ of this address either. This address is where legal letters can be sent to a director. At the time of writing,  one had to pay a fee to access it online.

Many people want a company like RegisteredAddress.co.uk to provide an address for this purpose, also. They don’t want to use their home address and they don’t like the idea of people being able to see where they live.

Many people set up companies where they are the sole director and shareholder. In these cases all they need are an internet connection, a debit card and a bit of patience.

You may need to have made notes if your setup is more complicated e.g. with additional shareholders and directors. Note: The shareholders own the company and you have to have at least one.

Sites like RegisteredAddress.co.uk can form your company for you. Sometimes they will do it for free if you take additional services with them. Sometimes they charge a fee. Some mail forwarding agents will let you use their address as a Registered Office, and some won’t, for legal reasons. Thanks to the internet, you can now easily shop around.

A good, comprehensive mail-forwarding service in Central London should cost about £150 p.a.; there are cheaper ones, but you run the risk of not getting your letters: the company may go bust, cut corners or have interruptions in service. The better companies have been around for years, have a smart website and answer queries promptly.

Britain is unusual in how easy it is to set up a limited liability company here; you don’t even need a Company Secretary any more. One person can do it all!