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UK Establishment Registration

For an Overseas Company Trading in the UK

A company incorporated outside the UK may trade in the UK either through a UK subsidiary company or through a a UK establishment.  To register as a UK establishment you must establish a physical presence  in the UK through which the company conducts its business such that persons resident here can deal with the organisation directly. 

Registration is not required if there is no physical presence in the UK.  For example, an independent agent who conducts business on behalf of the company is not a UKestablishment of an overseas company; neither is an occasional location such as a hotel where a director may conduct business during periodic visits to this country.  Other types of commercial enterprises (for instance partnerships, limited partnerships, unincorporated bodies or government agencies) cannot register in the UK as an overseas company.

Please note you do not need a physical presence in the UK if you wish to incorporate a subsidiary company as opposed registering a UK establishment.

The decision whether to register a UK establishment (branch)  or to incorporate a UK subsidiary must be taken separately in each case, but is normally based on the following considerations:

  • Commercial. A subsidiary is often preferable because some UK companies would prefer to do business only with other companies incorporated in the UK. Grants, loans and other finance may also be easier for a UK company to arrange.
  • Taxation. The relevant considerations are normally the tax system in which the overseas company does business, the terms of any double tax convention with the UK and the expected trading results in the UK. Sometimes it is more advantageous to start with one structure and then to transfer the UK business to the other structure. For example, the starting up costs and initial trading losses of a branch office may be deductible from taxable profits of the overseas company in its home country but this advantage will be lost when the UK branch becomes profitable in its own right.
  • Legal. A UK subsidiary may afford some protection to its parent from trading and other losses or liabilities of the UK operation, since the parent will benefit from its limited liability. However, this will not always be a protection, eg the parent will be fully liable where it has guaranteed the liabilities of the subsidiary.
  • Audit. A UK incorporated company has (except for certain very small companies) to have a statutory audit of its accounts, whereas an overseas company may be based in a country where this is not necessary.
  • Publicity of Accounts. A UK company has to file annual accounts which are available for public inspection. A branch has to file the accounts of the overseas company. If the accounts are in a language other than English a translation certified in the prescribed manner must be annexed. The disadvantage of revealing the overseas company’s accounts can be removed by interposing a non-UK company between the overseas company and the branch, so that the branch becomes a branch of the subsidiary of the overseas company.

A branch or subsidiary that has a name containing certain words (eg international, royal) can be required by the Secretary of State to change its name or give reasons justifying its use of the name. (Care should also be taken not to infringe a registered trademark.)

Our fees for registration of a UK establishment £150 plus vat of £30.00 plus Companies House fee of £20 making a total of £200.00

 

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