🇬🇧 United Kingdom

The UK isn’t a tax haven and doesn’t pretend to be. Corporation tax reaches 25%, and HMRC is one of the most capable tax authorities in the world – polite letters, long memory. Yet the UK keeps turning up in international setups, for two boring reasons: a UK Ltd is registered in a day and trusted everywhere, and the LLP is tax-transparent. For people who move there, 2025 brought the biggest change in two centuries. Non-dom is dead, long live the four-year FIG regime.

Is it for you?#

The UK is a credibility machine, not a tax machine. Clients, marketplaces, payment providers and banks understand a UK Ltd instantly, without the three-week compliance questionnaire that companies from smaller jurisdictions get. That’s worth money. It just doesn’t come with a low rate.

You win if:

• You need trust fast. A UK Ltd with a clear business model gets payment processing, marketplace accounts and enterprise clients with fewer questions than almost any other company. Nobody at Stripe needs a map.
• You live in a low- or no-tax country and use an LLP. A transparent LLP with non-resident members and non-UK business can mean no UK tax – and little or no tax at home, if home is somewhere like the UAE.
• You’re moving to the UK after 10+ years abroad and have meaningful foreign investment income. The four-year FIG regime exempts it completely. Four years, then the meter starts.

You lose if:

• You want low corporate tax. 19% to 25%, about 22% at €100,000 profit. That’s a mid-table European rate with better marketing. Bulgaria, Cyprus or Dubai are cheaper.
• You want residence through your company. Owning a UK company gives you no visa, and the investor visa is gone. Companies House will register you in a day; the Home Office won’t.
• You live in a high-tax country and hope an LLP fixes that. It won’t. Transparency sends the bill straight home, addressed to you.
• You value privacy. Directors, owners (PSCs) and accounts sit on a free public register that anyone with a browser and a grudge can search.

The company#

Entity types that matter#

• Private limited company (Ltd). The workhorse: one director (anywhere in the world), one shareholder, £1 share capital is common.
• Limited liability partnership (LLP). Limited liability like a company, taxed like a partnership. Needs at least two designated members – often the founder and a second company they own.
• Branch of a foreign company. Rarely useful for small businesses.

How a Ltd is taxed#

Associated companies share the thresholds, so splitting one business into five companies doesn’t multiply the 19% band. HMRC thought of that before you did. The good part: dividends leave the UK without withholding tax – to anyone, anywhere, no reclaim forms.

Worked example: €100,000 (≈ £86,000) profit#

Since April 2026 UK dividend tax is 10.75% (basic), 35.75% (higher) and 39.35% (additional), after a £500 allowance. Try your own scenario in the tax calculator.

The LLP: transparent by design#

The LLP pays no corporation tax. Each member is taxed on their share of the profit, wherever that member lives. A non-resident member is taxed in the UK only on UK-source profit. If the LLP has no UK establishment and earns from clients and activities outside the UK, those shares are generally outside UK tax. It still files accounts with Companies House and a partnership return with HMRC.

Three warnings, because “transparent” sells better than it works:

• Your home country decides. Most countries tax your share every year, paid out or not.
• Classification varies. Some tax authorities treat a foreign LLP as an opaque company, with very different results.
• UK source is easy to create. A UK office, staff or dependent agent can pull profits into the UK tax net.

Setup and timeline#

1. Verify your identity. Since 18 November 2025 every new director, LLP member and PSC must verify their identity with Companies House – online via GOV.UK or through an authorised agent.
2. Choose a registered office in the UK (a service address is fine).
3. Incorporate online. £100 digital fee since February 2026; usually done within 24 hours.
4. Register for corporation tax, VAT (from £90,000 taxable turnover) and payroll as needed.

Running costs#

Cheap, by European standards. A simple Ltd costs roughly £1,500–2,500 a year: accountant for accounts and the tax return, registered office service and the £50 confirmation statement fee. The planned 2027 accounts reforms (software-only filing, full profit and loss for small companies) were paused in January 2026 and are under review – a rare case of a government reading the room.

Banking#

This is the UK’s strong suit, and the main reason people still form Ltds. EMIs and business apps (Wise, Revolut, Airwallex, Tide) routinely open accounts for UK companies, many with non-resident directors. High-street banks usually want a UK-resident director or a visit to a branch that may or may not still exist. LLPs get more questions about members and money flows. See the offshore banking guide.

Substance#

Legally, a director anywhere and a registered office service are enough. For tax, that’s the start of the conversation, not the end. Where the company is managed decides: a Ltd run from Munich is likely German tax resident too, and the treaty tie-breaker then usually sends it to Germany. Read place of management before you rely on a UK company from abroad.

Living there#

Residency routes#

A UK company is not a residence route. Since Brexit that’s true for EU citizens too (unless they have settled status). You need a visa, and the Home Office runs its own queue.

The government’s “earned settlement” reform would raise the standard wait for settlement to 10 years; founder and talent routes are set to keep their three-year track. Settlement fees rose to £3,226 in April 2026.

The 4-year FIG regime#

Since 6 April 2025 domicile no longer matters. Two centuries of “where does your father consider home” reasoning, gone. Instead:

• If you’ve been non-UK resident for at least the previous 10 tax years, you can claim the foreign income and gains (FIG) regime for your first four tax years of UK residence.
• Claimed foreign income and gains are exempt and can be brought into the UK freely.
• The price: you lose the personal allowance and the capital gains annual exemption for each year you claim.
• From year five you’re taxed on worldwide income at up to 45% (39.35% on dividends).

Former non-doms can bring old foreign income into the UK at 12% (2025/26 and 2026/27) or 15% (2027/28) under the Temporary Repatriation Facility. Inheritance tax is now residence-based too: after 10 of 20 years of UK residence, your worldwide estate is in scope.

The fine print founders miss: the FIG regime covers foreign income. A company you run from London is UK resident, so its dividends are UK income. Moving your Cyprus company’s management into your Hackney flat doesn’t make it foreign – it makes it British.

Days and residency#

The Statutory Residence Test decides, and it’s more flowchart than law. As a newcomer you’re never resident under 46 days, and 183 days always make you resident. In between, UK ties count – with family, a home available and substantial UK work you’re resident from 91 days, with two of those from 121. See tax residency explained.

Healthcare, cost of living and daily life#

Visa holders pay the Immigration Health Surcharge and then use the NHS like residents; many founders add private cover because the waiting lists are a national pastime. London is among Europe’s priciest cities – Numbeo puts it at 86.1 before rent – and only moderately safe (safety index 44.9), with phone theft the classic nuisance – keep your phone away from the kerb. In exchange: unbeatable connections, deep capital markets and a professional services industry for everything, billed by the six-minute unit.

The catches#

Step by step#

FAQ#

Sources#

• GOV.UK – Corporation Tax rates and reliefs
• GOV.UK – tax on dividends
• GOV.UK – check if you can claim the 4-year FIG regime
• HMRC – Statutory Residence Test (RDR3)
• Companies House – identity verification
• Companies House – fee changes 2026
• Limited Liability Partnerships Act 2000
• HMRC – Partnership Manual
• GOV.UK – Innovator Founder visa
• PwC Worldwide Tax Summaries – United Kingdom