Overseas Businesses: Key Considerations When Establishing A Presence In The UK

An overseas business looking to establish itself in the UK will need a local adviser "on the ground" to make sure that it fulfils all of its statutory obligations as well as to identify planning opportunities, maximise commercial impact and minimise risk. What are the main tax and legal considerations in establishing a UK base of an overseas business?

Choice of UK business entity: Representative office. Restricted to preparatory and marketing activities on behalf of Head Office. Typically no UK tax presence if implemented correctly. The first step for many overseas businesses coming into the UK. UK Branch of overseas company. A UK trading arm of an overseas entity, typically with a tax presence in the UK limited to the profits earned by the branch or "permanent establishment". Often advantageous in the early days as less costly and opening years' losses may be relievable against taxable profits in the country of residence. Tax reliefs are typically available in the UK on the subsequent conversion of a trading branch to a UK subsidiary. UK subsidiary of overseas parent. A separate legal entity incorporated in the UK as a limited company. Subject to UK tax on worldwide profits but with the benefit of a separate legal personality with limited liability. UK Partnership structure. Less common but becoming more popular and may be appropriate for joint ventures. Structural tax...