Business in the UK
The United Kingdom of Great Britain and Northern Ireland is in the top ten jurisdictions in terms of attractiveness in terms of starting your own business. To date, registering a company here is a profitable and promising opportunity for investing funds and implementing a commercial idea.
The high prestige of the UK, the ability to use local companies for various activities and structures, as well as the ease of opening and maintaining companies, combined with low cost, have made the United Kingdom one of the world’s leaders in the number of registered companies.
The United Kingdom of Great Britain and Northern Ireland consists of England, Scotland, Wales and Northern Ireland. Great Britain extends its sovereignty to seventeen territories that are not part of the United Kingdom.
Advantages of doing business in Great Britain
- In 2018, the UK was ranked 7th in the World Bank's 'Doing Business 2018. Ease of doing business ranking'.
- Great Britain has international prestige and high business reputation, is a permanent member of the UN Security Council, a member of the Commonwealth of Nations, NATO, OECD, Council of Europe, OSCE. Great Britain owes its current world influence to its well-established trade relations with many countries, foreign investment, stable and thoughtful legislation.
- The UK has signed a large number of double tax treaties with other countries, allowing UK companies to avoid corporate tax on dividends, interest and royalties abroad.
- The UK is not included in any "black lists" issued periodically by various government institutions.
- The jurisdiction has highly qualified English-speaking staff.
- Registering a company in the UK is relatively easy. It is possible to purchase a ready-made shelf company or register a new one within 2-3 working days.
- The costs of setting up a company in the UK are comparatively low (much lower than in other European countries and in the US).
UK legal system
As noted above, the United Kingdom consists of England, Wales, Scotland and Northern Ireland. Accordingly, UK law consists of three legal systems: the law of England and Wales, the law of Northern Ireland and the law of Scotland. However, some laws apply throughout the UK, and some - only in certain parts of the Kingdom.
British law has two main sources - common law and statutes.
A unique feature of English law is the doctrine of judicial precedent, according to which the decisions of the superior courts are the binding source of law for future decisions. However, at present, judicial precedent regulates mainly the sphere of contractual and tort obligations. In other areas, precedents have supplanted statutes.
Statutes are laws passed by the legislature. The main legislative body of Great Britain is the Parliament, which is located in London. It is the only body that has the power to make laws (Acts of Parliament) that apply in England, Wales, Scotland and Northern Ireland.
The Scottish Parliament, the Northern Ireland Assembly and the National Assembly for Wales have the right to make laws on matters within the competence of the autonomy. The English legal system serves as the basis and model for many other international jurisdictions, including former English colonies.
The main act regulating the sphere of corporate law is the Companies Act 2006. The important point is that its action extends to Northern Ireland.
The UK offers many types of companies, however the most popular and efficient forms of ownership are:
British Partnerships
Great Britain gained particular popularity thanks to the opening of partnerships. Partnerships, like “ordinary” companies, are subject to state registration in the Companies House (Companies House). Despite this, they are, for rather historical reasons, not considered separate legal entities if they are registered in England or Wales. This means that the owners of the property of partnerships are legally not the partnerships themselves, but their full partners. In practice, this does not prevent the partnership from acting, in fact, precisely as a separate entity. If the LP is registered in Scotland, it is considered a separate legal entity under local law (despite being governed by the same UK regulation).
In terms of taxation, the main feature of a partnership is that it is not subject to separate taxation (regardless of whether it is a separate legal entity). That is, all partnership income, including undistributed income, is considered as income of partners and is taxed as part of their income (in appropriate shares). Thus, the British partnership is an effective tax planning tool that allows you to conduct international commerce, in fact, in a tax-free regime. At the same time, its image is an order of magnitude higher than that of a “regular” tax-free offshore company. Importantly, unlike other UK legal forms such as company and limited liability partnerships, partnerships are not generally required to file financial statements with government authorities.
UK international tax treaties
The UK has signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. The Convention is intended for the international automatic exchange of tax information, which is currently being actively implemented around the world on the basis of the Common Reporting Standard (CRS) developed within the framework of the OECD. The document establishes the legal basis for the exchange of information: according to Article 6 of the Convention, in accordance with procedures that are determined by mutual agreement, two or more parties can automatically exchange information among themselves.
The list of countries with which the UK has concluded an agreement on the avoidance of double taxation:
- Australia
- Austria
- Azerbaijan
- Albania
- Algeria
- Argentina
- Armenia
- Bangladesh
- Barbados
- Kingdom of Bahrain
- Belarus
- Belize
- Belgium
- Bulgaria
- Bolivia
- Bosnia and Herzegovina
- Republic of Botswana
- British Virgin Islands
- Brunei
- Hungary
- Venezuela
- Vietnam
- Guyana
- Gambia
- Republic of Ghana
- Germany
- Bailiwick of Guernsey
- Hong Kong
- Grenada
- Greece
- Georgia
- Denmark
- Jersey
- Egypt
- Zambia
- Zimbabwe
- Israel
- India
- Indonesia
- Jordan
- Ireland
- Iceland
- Spain
- Italy
- Kazakhstan
- Cayman Islands
- Canada
- Qatar
- Kenya
- Cyprus
- Kiribati
- China
- Colombia
- Korea
- Republic of Kosovo
- Ivory Coast
- Kuwait
- Latvia
- Kingdom of Lesotho
- State of Libya
- Lithuania
- Liechtenstein
- Luxembourg
- Mauritius
- Macedonia
- Republic of Malawi
- Malaysia
- Malta
- Morocco
- Mexico
- Moldova
- Mongolia
- Montserrat
- Myanmar
- Namibia
- Nigeria
- Netherlands
- New Zealand
- Norway
- UAE
- Oman
- Isle Of Man
- Pakistan
- Panama
- Papua New Guinea
- Poland
- Portugal
- Russia
- Romania
- Saudi Arabia
- Kingdom of Swaziland
- Senegal
- Saint Kitts and Nevis
- Serbia
- Singapore
- Slovakia
- Slovenia
- Solomon Islands
- Sudan
- USA
- Republic of Sierra Leone
- Tajikistan
- Thailand
- Republic of Trinidad and Tobago
- Tuvalu
- Tunisia
- Turkmenistan
- Turkey
- Republic of Uganda
- Uzbekistan
- Ukraine
- Uruguay
- Faroe islands
- Fiji
- Philippines
- Finland
- Falkland Islands
- France
- Republic of Croatia
- Montenegro
- Czech Republic
- Chile
- Switzerland
- Sweden
- Sri Lanka
- Estonia
- Ethiopia
- South Africa
- Jamaica
- Japan