Registering a Private limited company in UK

[Pincher]

Dear all,

My wife is about to start up a new online business, and since it is meant to be easier, and cheaper, to start a business in the UK than it is here in Spain, we would like to register it in the UK. We have done some googling and it seems relatively straightforward, though it is not always clear if there may be any hurdles down the line given that we don't currently reside in the UK. I do still have UK family and bank accounts, which may make some things easier. We have also seen that for a fee some websites offer to do it "all" for you, but I am not sure if this is necessary, and/or good value, or better to just get the experience doing it ourselves - however we do want everything legit, and don't want to fall foul of HMRC somewhere down the line for not presenting the correct documentation.

So I was just wondering if anyone has any experience on this front they are willing to share (by PM if preferred) and it would be particularly interesting if the business was set up by non-residents.

Thanks in advance,

Steve

[unc.si.]

You want a private Ltd Co, not a PLC (I know, same initials, but a plc refers to a public limited company, private ltd co's are referred to as Ltd). PLC's have to have more share capital (used to be £50k, not sure whether still the same now) and have more stringent rules, mainly because it's possible to apply for plc's to be listed on an exchange, which is not an option for Ltd co.

Registering is easy and cheap. Some rules over names (nothing obscene and you can't have something thats so similar to another company that there's a risk of 'passing off') but not many. Costs about £15 and you can do it online through the official Company House website. You do need a UK address for the registered office but directors and shareholders can be overseas residents.

The issues you'll face will be tax related. You will need to register with HMRC within a few months of setting the company up. You'll get taxed by HMRC on worldwide profits. Just be careful where the trade is deemed to be - may get taxed in Spain as well and have to rely on tax treaties. I'm really no expert on this though at all so you'd need to take advice. Setting up the Company is easy, but you'd need tax advice on the business.

[Pincher]

Hi Si,

Thanks a lot for your response, and pointing out my novice error - you are correct that it will be a private-limited-company, rather than public - perhaps one day if we are lucky.

Since the business is online, the trade will eventually be aimed at being a Europe-wide market-place, with a strong-focus on Spain and UK for obvious reasons, but we will be starting very small. Our objective is to set up the business as cheaply as possible, so we can see if it works or not. Here in Spain it is a long withdrawn process to even set up a business, and after that costs a few hundred bucks per month even if you are running at a loss.

Sounds like we can go ahead and try to set it up ourselves, following the official guidelines, and then get in contact with HMRC when the time comes and ask them for guidance. I am sure there must be someone on here who has gone through the same process though, and may be able to warn of any pitfalls we may step into. Since what we are doing is legit, I guess it is largely the same as setting up a business as a resident, however my friends who have businesses that I know of are all sole-traders, so a different situation.

Thanks again, Steve

[unc.si.]

Hi Steve,

like I say, you need to take advice from someone who understands tax, but it feels like this is not quite right. If you're managing the business from Spain (and especially if you're shipping goods to/from Spain or providing a service in / from Spain), it feels like you would need to register as a business in Spain and with the Spanish tax authorities. Might actually be cleaner and easier in the long run to just set up a Spanish Company, even though it might be a pain to start off with.

We've got a Company in Spain so I can find out the easiest way of setting up a business there is you want (mind you, its not in Catalunya, and you probably know that bit anywhere, seeing as you live there!)

Does it need to be a Limited Company? Can you just set up as a sole trader, which presumably will be less hassle?

[Pincher]

The facts are that it is a huge hassle here - my wife is from here, and does know what is required - it is very expensive - even to be a sole-trader - when you are just setting up - it really isn't an entrepreneurial society, yet, even in Catalunya which can probably be regarded as the most forward-thinking part of the country. As it will be an online business the target is as wide as possible - just any websites that we develop are likely to be in Spanish/English initially, and hence likely to have more visitors (if any) from Spain/UK. But we wouldn't have any problems doing business in N. and S. America either. I will try to double-check that we wouldn't be bending any rules too far.

You may be right that perhaps in the long-run we may need to have a Spanish entity - but we could just as well be living in the UK by that point, or somewhere else, anyway. But in the meantime we definitely want to do the set-up in the UK - we are not sure it will ever take off, and if it doesn't, it will be much less costly to fail under UK terms, we believe.

You are 100% correct about the tax aspect, and this is something we will have to get advice on at some point to make sure we do it all correctly - but this is not why we are considering the UK - it is just for the ease of getting something started. Thanks a lot for the offer of getting me more info. regarding setting up a business here, but no need to worry about that - my wife has been part of a family business here in the past, so she has a fairly good idea of the process.

Thanks for your help.

[Mystery]

I wonder if you'd be better off going for a Jersey/Guernsey/BVI company actually taking HMRC out of the equation altogether. You'd then only worry about them in the event that things take off and you start making profits in the company which you draw on. Tax is absolutely the most important consideration though so agreed that proper advice is key.

[blahblah]

It might be worth changing the title of the thread too?

[unc.si.]

It might be worth changing the title of the thread too?

Thread title seems fairly descriptive of what Pincher's asking to me

[blahblah]

I would think Spain and internet were the key aspects?