The Advantages Of A UK Subsidiary

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The UK is one of the best places on Earth to have a business. This makes many overseas companies seek to enter the UK market.

If you'd like your business to expand to the UK, you should consider setting up a UK subsidiary for your company.

What Is A Subsidiary?

A UK subsidiary is an officially incorporated organisation, set in the UK and complying to the local company formation and registration rules and regulations. The capital can be owned either by its parent company or by multiple partners. Whatever the form of subsidiary you choose to form, you must acknowledge that it must conform to relevant UK laws, and not to the laws that apply in the jurisdiction of its parent company.

One of the key advantages of setting up a UK subsidiary is that this new entity remains independent from its parent company. Your UK subsidiary can carry out business on its own. This makes it more credible when it comes to taking loans or seeking for investments from banks and other financial institutions. Here is a representative of an overseas business visa.

Since the UK subsidiary is a stand-alone company, it is the sole liable for any debts and obligations it take on. This limited liability can help a great deal when seeking to enter a new country, for instance. This type of company provides excellent flexibility. Moreover, it is entitled to issue and transfer bonds and shares to investors, partners, employees and managers. It can even submit an application to get quoted on the UK stock exchange.

How Easy Is It To Set Up A UK Subsidiary?

The most common type of UK subsidiary is the private limited company, the LTD. If this is your choice, you'll need to go through the legal UK company registration process and to send your application to Companies House.

Any UK subsidiary must have at least one appointed director, as well as a registered office address. In addition, it should have two addresses for its director, one residential and one formal. As this new body will be a subsidiary, you must also appoint your parent company as shareholder in this new entity.

The process of setting up a UK subsidiary shouldn't take you more than a few hours. However, you'll need to provide the UK authorities with the required documents, one of which is the Articles of Association. This document should emphasize in a clear manner the structure on the newly formed entity and the relationship between the company and its shareholders.

Once you've completed the setting up process, your new subsidiary will have to submit statutory accounts to Companies House. It may also need to undergo a statutory audit, even though this depends on the profile and the size of the parent company. Next, the subsidiary must register for corporation tax and maybe for VAT. It is also possible that it must apply for UK payroll tax. Nevertheless, all these are very easy to set up, so there's nothing to worry about. You'll have your UK subsidiary ready to start doing business within a very short time and with a fairly low investment.