10 Items For Consideration Before Setting Up A UK Subsidiary

We explore 10 items that should be considered as part of setting up a UK subsidiary from our experience of overseas companies expanding into the UK.  

Having decided upon setting up a UK subsidiary, there are some practical functions that should be considered prior to the actual registration of the subsidiary. The list below is a typical overview of the aspects which should have consideration   

Before setting up a UK subsidiary, the following items should be considered: 

1. Legal Structure: This is typically a wholly owned subsidiary of an overseas parent entity. It is possible to have a partially owned UK subsidiary with another individual or company. This is typical when entering a new market and the UK subsidiary is majority owned by an overseas parent entity, with a smaller shareholding of the UK subsidiary owned by another company, or individual – a country manager, or channel partner. We explore the potential advantages and disadvantages of Setting up a UK subsidiary here.  

2. Company Name: Choose a unique company name that is not already in use by another business and register it with Companies House. This link will allow you to check whether the name is available for registration.  

3. Registered Office Address: Select a registered office address for your UK subsidiary, which can be a physical location or a virtual address service. Our service offering typically provides Company Secretary and Registered Office as a combined complementary offering.  

4. Directors and Shareholder: Appoint directors and shareholders for your UK subsidiary, who will have legal responsibilities for the company’s operations. We always recommend to use an accountants or other address to hide the addresses of directors as a matter of public record. 

5. Taxation: Consider the UK tax laws that apply to your business and plan for compliance with the appropriate taxes, such as UK corporation (income) tax and UK VAT. You should also ensure you are aware of any employment taxes that will be applicable, such as Employers National Insurance, or Class 1A National Insurance on any Benefits in Kind (BIKS) for taxable benefits or expenses that were not payrolled.  

6. Banking: Open a business bank account for your UK subsidiary, which will require proof of identity and residency for the directors. Our checklist on Opening a UK Bank Account can be found here.  

7. Employment of Employees: Determine the status of any employees you plan to transfer or hire in the UK, including immigration requirements and employment laws. You might need to obtain a UK Sponsor Licence for the subsidiary either to intra-company transfer individuals from the parent company, or sponsor skilled migrants to live and work in the UK for the subsidiary.  

8. Intellectual Property: Protect any intellectual property rights you may have, such as trademarks or patents, by registering them in the UK. 

9. Contracts and Agreements: Review and update any contracts and agreements that may be impacted by the setup of your UK subsidiary. This should include local English terminology, together with applicable references to English law. Some of these legal agreements we can review in-house. For other more complex agreements we have an extensive referral network, including internationally through our membership of IR Global. Our Paul Beare is a recognised Gold Member with the network. More on the network here.  

10. Local Regulations: Familiarise yourself with the local regulations and laws in the UK that apply to your business such as the items you need to be aware of, and have checked in order to employee employees. This post covers Employing for the first time.  

The list may seem daunting with some many functions to consider while setting up a UK subsidiary. Help is available from a number of trusted and well recognised firms like ours with a proven track record of assisting overseas companies setup and expand in the UK and Europe. For further support and guidance on setting up a UK subsidiary, please get in touch.