Opening a subsidiary in UK can be the most suitable option to expand the activities of a larger company in the United Kingdom.
Unlike the branch, the subsidiary will be separate from its parent company, albeit remaining controlled by it.
A subsidiary in the UK is incorporated as a standalone company, however, the parent company retains more than 50% of interest in the subsidiary (stock and majority voting rights).
Registering a subsidiary company in UK is not the same as registering a branch of an overseas company, due to the fact that the subsidiary will represent a physical presence through which the overseas entity will carry out its business.
Registration with the Companies House will take place as prescribed by law, for the chosen business form.
Opening a subsidiary in the UK is easier with our help. Read the short guide below and then contact our lawyer in London, UK for more information about our company registration services.
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The characteristics of the UK subsidiary
The UK subsidiary is merely an extension of an overseas company. It is subject to the UK corporate rules and regulations, at the same time serving the interests of a larger corporation abroad, given the fact that it is controlled by it.
Our lawyer in London highlights the following traits:
- Distinctiveness: the subsidiary is a separate legal entity from its parent company, the overseas company;
- Control: the overseas company controls its subsidiaries (in the UK and other locations) through majority shareholding;
- Liability: the parent company abroad is not fully liable for the debts and obligations of its subsidiary; at most, only to the extent of its ownership;
- Incorporation: registering a subsidiary company in UK is done with the Companies House, in accordance with the rules for the chosen business form.
The decision to set up a subsidiary is one that is taken in accordance with the goals of the foreign company in terms of its expansion targets.
Subsidiary registration process
Opening a subsidiary in the UK is a multi-step process that starts with choosing a suitable business form.
An overseas company can set up a subsidiary in the form of a private company or a public limited company, depending on whether or not it will offer its shares for sale.
The key steps are the following:
- Choose a suitable business name: the name needs to be unique and available for use; it cannot contain certain words or expressions;
- Set the registered address: the subsidiary will have a physical, registered address in the United Kingdom;
- Gather the documents: the filled-in application, the Memorandum of association, the Articles of association and additional information in some cases;
- Make the application: the documents are submitted to the Companies House for formal registration.
Our team will assist you throughout the process needed for registering a subsidiary company in UK.
Subsidiary taxation in the UK
The subsidiary is treated as a tax resident. This is an important consideration when opening a subsidiary in the UK.
Our tax lawyer in UK lists the main taxes applicable to UK corporations:
- Corporate income tax rate: 19%;
- Dividend tax: 0% withholding tax on dividends paid by UK companies under domestic law;
- Value added tax: 20% standard rate, 12.5% and 5% reduced rates and 0% for some types of goods and services;
- Social security contributions: 13.8% on all income in excess of GBP 170 per week.
We can give you more details about the taxation of the subsidiary upon request.
Contact us if you are interested in registering a subsidiary company in UK.
Our team can help you incorporate, as well as handle other commercial matters.
We offer services in Central London, Canary Wharf, as well as many other areas throughout Greater London.