İNGİLTERE DE ŞİRKET KURMAK

SETTING UP A COMPANY IN THE UK

The Importance of Establishing a Company in the UK

Establishing a company in the UK offers significant strategic advantages for entrepreneurs and investors. The country’s global trade agreements and international connections give businesses easy access to European, American and Asian markets.

The main advantages that the UK offers are:

• Competitive tax policies and investment incentives
• Developed financial infrastructure and extensive funding sources centered in London
• Transparent and reliable legal system
• Support for R&D investments
• Dynamic innovation ecosystem
• Qualified and international workforce
• Strong digital infrastructure
• Developed logistics network

These features make the UK an ideal hub for both new businesses and companies looking to expand internationally.

Advantages of Establishing a Company in the UK

Establishing a company in the UK offers a variety of operational, financial and legal advantages for entrepreneurs and investors. The main advantages are:

• Fast and Easy Setup: Company formation can be completed through online platforms and company registration is usually completed within 24 hours.
• Affordable Start-Up Costs: Company formation costs are lower than in other European countries and registration fees are reasonable.
• Competitive Corporate Tax: The UK has a corporate tax rate of 25%, one of the most competitive among G7 countries.
• Comprehensive Tax Advantages: Various tax exemptions and incentives are available for companies. Special tax advantages are offered especially for R&D investments, venture capital and start-ups.
• Global Market Access: Thanks to the UK’s strong trade connections, easy access to European, North American and Asian markets is possible.
• Solid Legal Infrastructure: While the transparent and reliable legal system supports the business world, intellectual property rights are effectively protected.
• Advanced Finance and Banking System: As one of the world’s leading financial centers, London offers companies a wide range of investment and financing opportunities.
• Qualified Workforce: The UK offers a large workforce pool with a high level of education and expertise in various sectors.
• Innovation and Technology Ecosystem: There are comprehensive supports, grant programs and investment funds for start-ups and technology companies.
• Free Trade Advantages: International trade is supported by customs tax discounts and investment incentives offered in special regions.
• Modern Infrastructure and Logistics: Advanced transportation and logistics network facilitates global trade and e-commerce activities.

Thanks to these advantages, the UK is an important center that offers a strong business ecosystem and sustainable growth opportunities for entrepreneurs who want to establish a company.

Disadvantages of Establishing a Company in the UK

Establishing a company in the UK offers significant opportunities for entrepreneurs, but it also brings with it some challenges. The main disadvantages to consider in terms of legal, financial and operational processes are as follows:

• High Operating Costs: Especially in London and other major cities, office rents, labor costs, and general operating expenses are quite high. This requires new ventures to make meticulous financial planning.
• Complex Tax and Accounting Processes: Companies in the UK are required to file annual tax returns and regularly update their accounting records. These processes may require professional support. For this reason, it is recommended that businesses work with expert firms that provide accounting services in the UK.
• Value Added Tax (VAT) Obligations: It is a legal obligation for businesses that exceed a certain turnover threshold to calculate, declare, and pay 20% VAT. This obligation can increase the cost structure of businesses.
• Employer Obligations and Employee Rights: Employers are subject to various legal obligations towards their employees. Obligations such as minimum wage regulations, occupational health and safety standards, and retirement contributions increase business costs.
• Post-Brexit Trade Regulations: Customs procedures and tax regulations have become more complicated in trade relations with the European Union. There are additional bureaucratic procedures and costs, especially for companies that import and export/e-export.
• Exchange Rate Fluctuations: Changes in the value of the British Pound create financial uncertainty for businesses that import and export/e-export. This situation poses a risk, especially for companies that trade internationally.
• Regulatory and Legal Compliance Processes: Companies must fully comply with the regulations within the framework of UK trade, finance, and labor law. Time and expertise are required to manage these processes.
• Intense Competition Environment: Since the UK has a developed entrepreneurial ecosystem, competition is quite intense in many sectors. Newly established businesses need to carefully plan their market entry strategies.
• Bureaucratic Procedures: Although the company establishment process is quick, opening a bank account, obtaining a tax number and obtaining the necessary licenses in certain sectors can take time.
• Residence and Work Permit Requirements: Foreign entrepreneurs establishing a company in the UK are required to have certain visas and residence permits. Establishing a company in a foreign country also requires a process of adapting to the local market, and detailed market research should be conducted for this process.

Given these factors, it is critical for entrepreneurs planning to set up a company in the UK to conduct thorough preliminary research and meticulously plan the financial, legal and operational processes to minimise potential risks.

Who Can Set Up a Company in the UK?

The UK has a modern system that makes the process of setting up a company easy for entrepreneurs and investors. The basic steps that individuals who want to set up a company in the country must take are: determining the type of company, completing the official registration procedures, meeting tax obligations and complying with legal requirements. The criteria required to set up a company in the UK are explained in detail below:

• No Citizenship Requirement: You do not need to be a UK citizen. Foreign investors can also establish a company within the legal framework.
• Age Limit: It is mandatory to be 18 years of age or older to become a company owner or manager.
• Identity Documents: Foreign entrepreneurs must present a valid passport or identity document for company registration.
• Official Business Address: The company must have an official business address within the UK. This address will be used in all official correspondence.
• Business Model Compliance: The company's field of activity must be in accordance with UK law. Additional permits may be required in some sectors.
• Partnership Structure: Companies can be established by a single person or with more than one partner.
• Manager Appointment: At least one manager must be appointed to be responsible for the management and legal obligations of the company.
• No Residency Requirement: Non-UK residents can also establish a company. However, the company's official address must be in the UK.
• Tax Obligations: Company founders must register for corporate tax, VAT and PAYE (Pay As You Earn) if they employ staff.

The UK encourages international entrepreneurs with its investor-friendly policies. Anyone who meets the above requirements can establish a company in the UK by completing the necessary legal procedures.

How to Establish a Company in the UK?

The process of establishing a company in the UK consists of three basic stages: First, you need to determine your business model, then complete the official registration procedures, and finally, you need to activate your company by completing tax records and other legal obligations.

1. Kuracağınız Şirket Türünü Seçin

The first step is to determine the type of company that best suits your business. Each of the different legal structures in the UK has its own advantages and responsibilities.

Types of Companies You Can Form in the UK

You can choose one of the following types of companies depending on your business model and growth goals.

• Sole Trader

A sole proprietorship is the most common and easiest type of business to set up in the UK. It is set up and run by a single person. The business owner is directly responsible for all profits and losses. Importantly, the personal assets are responsible for the business’s debts – meaning if the business goes bankrupt, the debts will be covered by your personal assets.

Steps to follow to set up a sole proprietorship in the UK:

• Choosing a Business Name: The name you choose must be unique and legally compliant. You can also use your own name. You can check the availability of the name using the Company Name Availability Checker.
• HMRC Registration: You must be registered with the Self Assessment tax system and file an annual income return.
• Tax Number: You will need to obtain a tax number to meet your tax obligations.
• Bank Account: It is important to open a separate business account to separate your business and personal finances.
• Insurance Procedures: Depending on your area of ​​activity, you may need to have professional and/or public liability insurance.
• Accounting System: You should set up a professional accounting system to track your income and expenses regularly and to file your taxes on time.


• Is Capital Required to Set Up a Sole Proprietorship in the UK?

There is no capital requirement to set up a sole proprietorship in the UK. Business owners can start their operations with their personal assets or the income they will earn from the business. However, depending on the chosen sector and field of activity, some start-up costs may be required (for example; equipment purchase, office rent or mandatory insurance).

This company structure is especially suitable for small-scale entrepreneurs, freelancers and those who want to start a business with minimum costs.

• Limited Company (Ltd.)

A Limited Company (Ltd.) is one of the most preferred types of companies in the UK. This structure provides more legal protection than a sole proprietorship and operates as a separate legal entity. Thus, the owners of the company are not held liable for the debts of the business with their personal assets. Limited companies are especially preferred by entrepreneurs who want to attract investment or aim for a corporate structure.

The requirements for establishing a Limited Company in the UK are as follows:

• Company Name Selection: The name of the business should not be the same as existing companies.
• Official Registration: The company must be registered with Companies House, the official company registration authority in the UK.
• Management Structure: At least one director and one shareholder must be appointed.
• Legal Address: The company's official address must be within the UK.
• Official Documents: The company's operations must be determined by preparing the Memorandum of Association and Articles of Association documents.
• Tax Registration: The company must be registered with HMRC (UK Revenue and Customs) and be liable to Corporation Tax.
• Bank Account: A separate corporate bank account must be opened for the company's financial transactions.
• Insurance Transactions: Public liability insurance depending on the field of activity and/or professional liability insurance must be obtained.
• Accounting System: Regular financial records must be kept and mandatory notifications such as Annual Declaration (Confirmation Statement) must be made on time.


• Is Capital Required to Set Up a Limited Company in the UK?

There is no minimum capital requirement to set up a limited company in the UK. Shareholders can determine their own initial capital. A company start-up of just 1 GBP nominal capital is sufficient.

However, you should consider the following basic costs to get your business up and running:

• Official company registration fee
• Preparation of legal documents
• Accounting and professional consulting services
• Operational expenses (office rent, software licenses, equipment, etc.)



The limited company structure is an ideal option for entrepreneurs who have growth goals, want to attract investors, and want to separate their personal assets from business risks.

• Public Limited Company (PLC)

Public Limited Company (PLC) is a type of company whose shares are publicly traded and can be traded on the stock exchange. It is a structure for larger businesses compared to Private Limited Companies (LTD) and offers broad opportunities to attract investors. However, it is subject to stricter legal regulations and detailed financial audits.

The basic requirements for establishing a PLC are as follows: The company must be registered with Companies House, appoint at least two directors and two shareholders, have an official address in England, and prepare documents containing detailed management principles. In addition, a company secretary must be appointed and the necessary arrangements must be completed for the shares to be offered to the public.

PLCs are taxpayers of Corporation Tax and must submit their financial statements regularly. They must undergo an independent audit every year and report their financial records regularly. Depending on the field of activity, additional guarantees such as public liability insurance and professional insurance may also be requested.

• Is Capital Required to Establish a Public Limited Company (PLC) in the UK?

There is a minimum capital requirement for the establishment of a PLC. The company must have a minimum nominal capital of £50,000, and at least £12,500 of this must be paid during the establishment of the company. This capital requirement is important for PLCs to be able to sell shares to the public and ensure their financial reliability.

The basic costs you may encounter in the establishment of a PLC are as follows:

• Company registration fee
• Preparation of partnership agreement
• Legal and accounting consultancy expenses
• Operating expenses (office rental, software, etc.)



A Limited Liability Partnership (LLP) is an advantageous business model for businesses that provide professional services because of its flexible management structure and legal structure that limits the personal liability of partners. However, due to tax liabilities and annual reporting requirements, it is important to evaluate whether this structure is suitable for the business model before establishing an LLP.

• Limited Liability Partnership (LLP)

A Limited Liability Partnership (LLP) is a partnership model in which partners are only liable for the company's debts to the extent of the capital they contribute, while protecting their personal assets. This structure provides partners with greater legal protection than traditional partnership models. The LLP model is ideal for businesses that provide professional services, such as law firms, accounting firms and consulting firms.

The basic requirements for establishing an LLP in the UK are: At least two partners (designated members), registration with Companies House, an official address in the UK and an LLP Agreement. An LLP operates like a company in terms of management, but its taxation is similar to traditional partnerships. Unlike other types of companies, an LLP has its own legal personality and the partners cannot be held personally liable for the company's debts.

In terms of taxation, LLPs are exempt from Corporation Tax. Instead, each partner pays their own income tax. LLPs have legal obligations including keeping regular accounting records, reporting annual accounts and submitting an Annual Confirmation Statement.

• Is Capital Required to Set Up a Limited Liability Partnership (LLP) in the UK?

There is no minimum capital requirement for setting up an LLP. However, partners can contribute as much initial capital as they deem appropriate for the sustainability of the business. Each partner’s liability to the company is limited to the amount of capital they contribute and the terms set out in the partnership agreement.

The main costs you will encounter when setting up an LLP are:

• Company registration fee
• Partnership agreement preparation cost
• Legal and financial consultancy expenses
• Operational expenses (office rent, technological infrastructure, etc.)



With its flexible management structure and legal framework that protects the personal assets of the partners, LLP is an ideal option especially for professional services companies. However, before opting for this structure, you should thoroughly analyze its suitability for your business model by evaluating factors such as tax liabilities and regular reporting requirements.

• Branch or Representative Office

A branch or representative office is a structure established by a parent company established outside the UK to conduct its activities in the country. This model is especially preferred when international companies want to establish a presence in the UK and test the market. The most important difference between a branch and a representative office is that a branch can conduct direct commercial activities, while a representative office is limited to activities such as marketing and research.

There are three basic requirements for opening a branch or representative office in the UK: registration with Companies House, showing a legal address in the UK, and providing the financial and operational information of the parent company. Branches operate as an extension of the parent company and the parent company is responsible for all liabilities. Representative offices, on the other hand, cannot conduct direct commercial activities and can only undertake supporting tasks such as marketing and business development.

In terms of taxation, branches are liable to pay Corporation Tax on the income they earn in the UK. Representative offices, on the other hand, are generally not taxed because they do not conduct commercial activities. Branches are also required to regularly submit the parent company’s financial records to Companies House and keep accounting records.

• Is Capital Required to Open a Branch or Representative Office in the UK?

There is no legal minimum capital requirement to open a branch or representative office in the UK. However, it is essential that the parent company provides sufficient financial support for the business to operate properly. Branches that will operate commercially in particular need to plan a budget that can cover operating expenses, operational costs and tax liabilities.

The basic costs to be encountered when opening a branch or representative office are as follows:

• Official registration fees and legal application costs
• Office rental and operating expenses
• Professional consulting services (law and accounting)
• Compulsory insurance and license fees



While this structure makes it easier for international companies to enter the UK market, it does carry risks as the parent company assumes all responsibilities. Depending on your business’s goals and operating plans, you may want to consider setting up an independent Limited Company (Ltd) or Limited Liability Partnership (LLP) instead of opening a branch.

2. Company Name Selection and Registration

Your company name must be unique and not used by another company. When determining your company name, you should take care to ensure that your brand is original and meets legal requirements. A well-chosen brand name will help your company stand out in the industry and help you create a strong corporate identity in the long term. You can check the name availability and complete the registration process via Companies House. Don't forget to add legal suffixes such as "Ltd." or "PLC" to the end of your company name.

3. Preparation of the Company's Articles of Association and Articles of Association

There are two basic documents required for every limited company: the Memorandum of Association and the Articles of Association. These documents are the basic building blocks of the company. The Memorandum of Association contains the purpose of establishing the company and its basic information, while the Articles of Association govern the internal workings of the company, its management structure, the rights of shareholders and the powers of directors in detail. These two documents are legal documents that must be submitted to Companies House when applying for company registration.

4. Determination of Shareholders and Directors

Every company must have at least one director and one shareholder. The director runs the day-to-day operations of the company and is responsible for its legal obligations. Shareholders are people who invest capital in the company and receive a share of the profits.

Under UK law, a person can be both a director and a shareholder. This is particularly true for Private Limited Companies (Ltd) and most small businesses are structured as companies that are both managed and owned by a single person. However, there are special rules for different types of companies, such as Public Limited Companies (PLCs) and Limited Liability Partnerships (LLPs).

• Private Limited Company (Ltd): A single person can manage the company independently as both a manager and a single shareholder.
• Public Limited Company (PLC): A minimum of two managers and two shareholders are required. A single person can be both a manager and a shareholder, but they do not have the authority to manage the company alone.
• Limited Liability Partnership (LLP): In this structure, the term partner (member) is used instead of a manager. LLP partners are both the owners and managers of the company.
• Sole Trader (Sole Proprietorship): Since the business owner and the business have the same legal personality, there is no distinction between shareholders and managers.

Depending on the type of company selected, the roles of shareholders and directors may differ. In a Private Limited Company (Ltd) structure, it is common for the same person to be both a director and a shareholder. In large-scale or public companies, the management structure is subject to more comprehensive regulations and more than one director is usually required.

5. Valid Registration Address and Contact Information

To establish a company in the UK, you need an official registration address. This address is used for your communication with institutions such as Companies House and HMRC (UK Revenue and Customs). Although the company owners or directors do not have to live in the UK, the company must have a registered address within the UK.

Entrepreneurs can choose virtual office services to meet this requirement. In addition to providing your company with an official address, these services also provide mail forwarding services. It is an ideal solution especially for business owners who are not physically present in the UK. It is also advantageous for companies looking to have a prestigious address in London or other major cities.

While using a virtual office is a legal option, there are some important points. If the address is not used as a physical workplace, there may be additional obligations or restrictions. Therefore, it is important to choose an address that complies with the rules set by Companies House.

When determining your registration address, you must first check your company name via the Company Name Availability Checker, and then complete all registration procedures via the official website of Companies House.

By following these steps, you can establish your company in accordance with legal requirements in the UK and start your activities.

6. Application to Companies House

You can apply to Companies House online or by post to formally set up your company. Online applications are usually processed within 24 hours, while applications by post can take up to a few weeks. The registration fee for online applications is £12. You can apply via the Companies House official registration page: Companies House Online Application Page

7. Tax Registration and Other Obligations

A company must first register with the UK Revenue and Customs (HMRC) and pay corporation tax. If your annual turnover exceeds £90,000, you must register for VAT. In addition, if you employ staff in your company, you must also register for PAYE (Employee Tax System).

8. Starting of Business Activities

Once the legal registration of the company is complete, it is time to open a bank account, organize accounting processes and start commercial activities. It is important to work with an accountant who is experienced in financial management and legal compliance for the healthy growth of your business.

The process of establishing a company in the UK can proceed smoothly and quickly with detailed planning. By following the appropriate steps for the type of company you choose, you can establish your business on solid legal foundations.

To summarize;

•   The UK offers significant advantages to entrepreneurs with its strategic location and business-friendly environment.
•   While the company formation process is quick and easy, applicants must be over 18 years of age and provide the necessary documentation.
•   There is no citizenship or residence requirement to establish a company in the UK, but the official address of the company must be within the borders of the UK.

  Your Trusted Partner in Your Journey to Establish a Company in the UK: İfastürk

If you want to manage the company establishment process in the UK professionally and need a reliable partner on this journey, İfastürk is with you! Our expert team will help you complete your company establishment processes in the fastest and most trouble-free way with years of experience and comprehensive knowledge.

We as Ifasturk:

• ✔️ Consultancy in choosing the type of company
• ✔️ Management of official documents and application processes
• ✔️ Completion of tax registration procedures
• ✔️ Support in bank account opening processes
• ✔️ Guidance on compliance with legal requirements

we offer our services.

If you want to make your dream of establishing a company in the UK come true, contact us now. We will be happy to be your reliable guide on the road to success in international trade with our customized solutions.

Contact us for detailed information and consultancy.

Mesut SENEL | Ifasturk CEO

Certified Public Accountant