Starting a business in the UK as an international founder

Setting up a business in the UK can be a very attractive proposition for an international founder. It gives you access to a large market, a well-established commercial environment and the opportunity to work with customers and partners in a range of jurisdictions. However, incorporating a company is only the first step in setting up a successful business. The legal structure, the ownership structure, the tax position, the immigration status and the commercial contracts all have to be in place and work together.

For the overseas entrepreneur, the first question is usually: "Can I set up a UK company from abroad?" In most cases, the answer is yes. You can set up a UK company, own shares in it and be its director without living in the UK. However, incorporating a company does not in itself give you the right to live or work in the UK. Immigration permission, tax residence and the place where the business is actually run are separate questions, and each must be considered on its own.

Choosing the right business structure

A private company limited by shares is the most common form of company for a business that will seek outside investment, employ people or operate separately from its owners. It has a separate legal personality, can own assets and enter into contracts, and ordinarily limits a shareholder's liability to the amount, if any, unpaid on their shares. That protection is not absolute. Personal guarantees, director misconduct and certain statutory liabilities can all expose individuals to personal liability.

Other structures may be more appropriate for different objectives. A sole trader structure can be administratively very simple, but it does not create a separate legal person. A partnership or LLP may be the right structure for a professional practice or joint venture, depending on the commercial arrangements and the liability profile. An ordinary partnership in England and Wales has no separate legal personality, whereas an LLP does. The structure you choose should reflect the ownership, the investment plans, the governance arrangements, the tax position and the likelihood of bringing in further partners or investors.

International founders should also consider whether a UK subsidiary, a UK branch of an overseas company or a new UK holding company is the most appropriate option. Each has different implications for liability, reporting, tax and the relationship between the UK operation and the overseas business. An overseas company that sets up a UK branch must register it with Companies House.

Incorporation and Companies House requirements

A UK company must be registered with Companies House. Incorporation requires a company name, a registered office address, a registered email address, details of the directors, a statement of capital and the initial shareholdings, details of the people with significant control (PSCs), a statement that the company is being formed for a lawful purpose, and articles of association (or adoption of the model articles). The articles set out the rules for the company's internal management. They should not be treated as a mere formality, particularly where there are several founders or investors.

Identity verification has been mandatory at Companies House since 18 November 2025. Directors and PSCs who are individuals must verify their identity, either directly through GOV.UK One Login or through a Companies House authorised agent. They then receive a personal code, which they must give to Companies House for each company role they hold. Verifying and filing are separate steps and do not have to happen at the same time. A person normally verifies once and uses the same code whenever a filing requires it.

The timing depends on the role. A new director's code must be given as part of the incorporation or appointment filing, so the director needs to verify first. A new PSC can give their code when first added to the register or within 14 days of being added. Directors and PSCs who already held their roles on 18 November 2025 were given a 12-month transition period, running until November 2026. Under the transitional rules, an existing director gives their code with the company's next confirmation statement. An existing PSC must give their code within a 14-day period. If they are also a director of the company, that period starts the day after the confirmation statement date. If they are not, it starts on the first day of their month of birth. These dates can be checked on the Companies House register. Once the transition period ends, every individual director and PSC should be verified. Anyone who has not verified should do so without delay, as acting as a director without verifying is an offence. Founders should decide who will be responsible for each of these steps before the company starts filing.

A registered office must be an appropriate address in the relevant part of the UK. It does not have to be the address where the business actually operates, but it is the formal address for all statutory communications. Overseas founders need to make sure that post is monitored and that any statutory notices are dealt with promptly.

Ownership, governance and founder arrangements

Where two or more people are starting a business, it is vital to agree at the outset how the business will be owned and how decisions will be made. A shareholders' agreement can cover matters such as voting, board appointments, share transfers, future investment, dividends, deadlock and exit arrangements. It can also deal with what happens if a founder stops working in the business, is no longer able to contribute or wishes to sell their interest.

The articles and any shareholders' agreement should be consistent with each other. A mismatch can cause serious problems, particularly where the articles are amended and the shareholders' agreement is not, or where important commercial expectations have never been put in writing. International founders will also want to consider which law governs their agreements and where any disputes are to be resolved.

Tax, management and substance

A company incorporated in the UK is generally UK resident for Corporation Tax purposes, even if it is managed from abroad. That does not mean the business is subject only to UK tax. Overseas management and business activities may create additional tax obligations or a taxable presence in another country. The position will depend on where the company is managed, where its activities are carried out, where the owners are resident and where the staff are located.

For example, a founder based in Spain who makes the key management decisions for a UK company from Spain needs to consider both the UK company's obligations and its Spanish tax position. Under Spanish law, a company whose effective management is in Spain is treated as resident in Spain, even if it was incorporated elsewhere. Where a company is resident in both countries, the UK-Spain double tax treaty treats it as resident only where its place of effective management is situated, and UK law will then treat it as not UK resident for Corporation Tax purposes. A UK company run from Spain could therefore become taxable in Spain rather than the UK. Employees, premises or a dependent agent in another jurisdiction can also create a taxable presence there. Treaties can also provide relief from double taxation, but they do not remove the need for a careful analysis of the facts.

A company should also think about Corporation Tax registration, accounting records, annual accounts, confirmation statements, VAT registration (where required), payroll and any sector-specific requirements. The directors are ultimately responsible for making sure that all the necessary filings are made, even if accountants or company service providers handle the administration.

Immigration and the right to work

A UK company can be owned by someone who does not have the right to work in the UK. The distinction between owning a company, being a director and actually working in the UK is important. If a founder intends to move to the UK and work in the business, they will need to identify an appropriate immigration route. The company cannot simply sponsor its owner on a work route without meeting the relevant eligibility, sponsorship and genuine vacancy criteria. A founder of an innovative business may instead consider the Innovator Founder route, which requires endorsement by an approved body and a day-to-day role in the business.

Recruiting staff from overseas may also require a sponsor licence and ongoing compliance with right-to-work and record-keeping requirements. The immigration strategy should be part of the business plan, not an afterthought.

Contracts, premises and regulatory requirements

A new business will almost certainly need contracts with its suppliers, customers, distributors, employees, consultants, landlords and investors. These contracts will need to cover payment, delivery, service levels, intellectual property, confidentiality, data protection, liability, termination and dispute resolution. Where the parties are based in different jurisdictions, the contracts need particular attention, including on governing law, jurisdiction and enforcement.

Depending on its activities, the business may also need sector-specific licences, insurance, data protection procedures, employment policies and consumer terms. Any business that collects personal data will need to assess its obligations under the UK GDPR, and many will also need to pay the data protection fee to the Information Commissioner's Office. Businesses in regulated sectors may have additional requirements.

Build the structure around the commercial plan

The best way to set up a UK company is to work backwards from the commercial objective. Who is going to own the business? Where will decisions be made? How will it be funded? Where will the customers and the staff be? Will the founder be moving to the UK? The answers to these questions will have a major bearing on the structure you choose and the documents you need at launch.

Scornik Gerstein LLP advises entrepreneurs and businesses on company formation, commercial contracts, corporate structuring and cross-border issues. For entrepreneurs operating between the UK and another jurisdiction, co-ordinated advice is particularly valuable, as it can identify issues that might otherwise be overlooked if company formation, immigration and tax are considered in isolation.

If you are planning to start a business in the UK, our corporate and commercial team can help you choose the right structure and prepare the documents you need. For visas and sponsor licences, see our immigration and nationality services. Contact us to discuss your plans.

Frequently asked questions

Can a non-resident open a UK limited company?

Yes. There is no UK residence or nationality requirement to be a shareholder or a director of a private limited company. You do need a UK registered office address and at least one director who is a natural person (an individual, not a company) aged 16 or over. Directors and people with significant control who are individuals must also verify their identity with Companies House.

What does it cost to register a company in the UK?

The Companies House online incorporation fee is £100. Ongoing costs include the annual confirmation statement fee (currently £50 online), accounting and filing costs, and professional fees for the articles, the shareholders' agreement and tax registration.

Does having a UK company give you the right to work in the UK?

No. Owning a company or being a director does not give you immigration permission. A founder who wishes to move to the UK and work in the business will need a suitable visa route. A company that wishes to sponsor its own owner must meet all the sponsorship and genuine vacancy requirements.

Where will a UK company owned from abroad pay tax?

A UK-incorporated company is generally UK resident for Corporation Tax purposes. However, if it is managed from another country, it may also be treated as resident there. If a double tax treaty then gives residence to that country, the company will not be UK resident for Corporation Tax purposes. Its overseas activities may also create additional tax obligations or a taxable presence abroad. Double tax treaties, such as the UK-Spain double tax treaty, decide which country has residence in these cases, but the facts of each case must be analysed carefully.