England: Overseas interests establishing a business in the UK

October 2022

The global economy is facing many challenges at present leading to unpredictable marketplaces for any company establishing a business overseas. The UK is certainly no exception to these challenges but one present advantage for foreign investors is the fall in the value of sterling against foreign currencies. The UK also remains an easy, efficient and inexpensive system in which to register and run a new UK subsidiary company and there are other alternatives if an overseas company prefers to wait and see if its UK business opportunities will prove sufficiently profitable.

Options include:

  • appointing an agent, franchisee, or distributor.
  • entering into a partnership agreement.
  • setting up a joint venture with a local partner; or
  • registering an “establishment” in the UK.

Of the above options only the last one (an “establishment”) requires any formal registration and applies where the overseas company does not have a UK registered company but does have either:

  • physical premises in the UK from which it operates a business; or
  • a specific address in the UK from where it has frequent commercial activity;

in which case the overseas company will have to either do a branch registration if there are people effectively in the UK that run the company’s operations in the UK (basically autonomous commercial activity) or a place of business registration (where such autonomy does not exist).

Both registrations must be done within one month of establishing in the UK and have practical/legal/taxation consequences albeit less so than with a separate UK registered company. It is worth noting that the UK registered “establishment” is not a separate legal entity but rather the same legal entity as the overseas company it is derived from (compared to a UK subsidiary company whose shareholders have the benefit of limited legal liability).

Although not yet available to overseas companies, the UK intends to make it possible for companies to move their domicile to and relocate to the UK, by enabling the” re-domiciliation” of companies. This would substantially reduce complexity compared to other routes of relocating to and incorporating in the UK.

If you would like to learn more about the above or company law generally, please contact: Nicola Vincent at nicolavincent@meadowsryan.com or on +44 (0)7918670150.

For more information on the above or in other matters, please contact Piers Meadows (PiersMeadows@meadowsryan.com).

This article is based on publicly available information and given for informational purposes only. It is not intended as legal advice or as a comprehensive analysis of the matters referred to herein.