A company formed in many other countries will have similar requirements to those formed in the UK. However it is the status of the UK, as a high probity jurisdiction and reputable country of registration, that is a major factor of choice.
Ownership from other countries
For a UK company, the directors, secretary and shareholders do not have to be based in the UK and can be of any nationality.
UK companies are purchased by residents of other countries for many reasons. Not all stand a full test of propriety – for example purchasing a company merely as a step towards opening a bank account.
We think it important to be clear about the purpose intended for a new company. The following illustrates the main uses, noting first that a company can be either active or dormant (inactive).
Dormant or Active?
“Dormant” literally means “sleeping” and technically all companies are dormant immediately after incorporation. Many stay in that condition and around 19% of all companies in the UK are recorded as dormant. Companies become active when there are ‘significant accounting transactions’ during the period resulting from their activities.
Dormant companies can principally be used for asset protection whilst a huge range of uses can be made from active companies. However two clear distinctions can be made between:
- Business operations for profit — involving trading (buying and selling only) adding value (by manufacturing or processing) or providing services
- Investment — involving the use of capital to secure a return.
We therefore recommend careful consideration of
What is required for business operations in the UK?
A UK presence requires many components covering physical assets and people, systems and financial support. The extent to which an UK operation is complete is directly related to the investment required.
A “token” presence may be all that is needed. A “full” presence requires much more investment.
However we believe that any assessment of what is required in the UK must consider what is already available from the whole international business. In a modern world of communications colleagues can work together in business operations but be seated many thousands of miles apart.
Valetime group have experience of supporting many types of business in the UK that work within an international structure for clients. Our aim is to minimise the investment required for an UK presence.
Do you actually need a UK company for trading?
We also advise clients to consider all other options for a UK presence. Of these the use of agency arrangements can often offer a least cost and safer entry to the UK.
Companies involved in Investment
A company involved in investment is a company with a distinct purpose and often clarity can be brought by simply adding key words in the company name. For example an “investment fund” or a “development fund” has a clear and declared purpose.