UK Company Formation

This content was prepared and reviewed by the World Company Setup UK formation consultancy team based on current Companies House and HMRC regulations.

• Setting Up a Company in the UK: Key Advantages
• Opening an Online Bank Account in the UK
• Who Can Register a UK Company?
• Company Types: Ltd, LLP, Sole Trader, PLC
• Choosing and Checking a Company Name
• Step-by-Step Companies House Process
• Mandatory Identity Verification and ACSP
• Required Documents
• Tax Rates in the UK
• Profit Distribution and Dividend Tax
• Registered Office and Ongoing Obligations
• Filing and Tax Calendar
• Cost of Setting Up a Company
• UK vs Estonia, Dubai and the USA
• Does It Grant Residency or a Visa?
• E-Commerce and Amazon Sellers
• Common Mistakes and How to Avoid Them

Setting Up a Company in the UK: Key Advantages

Providing a registered business address is very important for those wishing to set up a company in the UK. This address is required for all written communications and is a legal obligation. Especially for non-UK residents or foreigners, it is necessary to have a legal address. Those wishingto set up a company in the UK often partner with a company formation service provider to facilitate this process. These services include the assistance of a registered lawyer.

The UK is the fifth largest economy in the world and one of the leading international financial centers. It has a stable economy, strong currency and an investment climate that encourages entrepreneurship. With its proximity to the EU and US markets, it is one of the locations where many investors want to establish companies and open branches.
 

We work to grow your company, create strong business connections and increase your brand value. We serve clients who want to take part in the UK market.

Opening an Online Bank Account in the UK

After setting up a company in the UK, opening a personal or business bank account is an important step. Through these accounts, you can receive and send different types of payments from all over the world. Online platforms such as Wise can be preferred toopen a bank account in the UK. Wise allows you to send and receive money quickly and at low costs. You can also use the services offered by standard banks such as Stripe without any problems.

Who Can Register a UK Company?

You do not need to be a British citizen or live in the United Kingdom to register a private limited company. Companies House applies no nationality test at incorporation, and your country of residence does not block the filing. A founder based abroad can be the sole director and sole shareholder of their own Ltd.

Core requirements for non-resident founders

• At least one natural person as director: The director must be 16 or over and must not be disqualified. A company cannot be formed with corporate directors alone.
• At least one shareholder: The same person can hold both roles, and £1 of nominal share capital is legally sufficient.
• A registered office inside the UK: An address where statutory mail can physically be delivered.
• Identity verification: Directors and people with significant control must complete Companies House identity verification.
• Company secretary: Optional for a private limited company; there is no obligation to appoint one.

Who cannot be appointed as a director?

Disqualified directors, undischarged bankrupts and anyone under 16 cannot be appointed. Listing such a person on the application results in rejection, so it is worth confirming eligibility before filing.

Company Types: Ltd, LLP, Sole Trader, PLC

Before setting up a company in the UK, you need to decide which company structure suits your needs. The four most common structures are:

• Private Limited Company (Ltd): The most popular structure for foreign entrepreneurs and e-commerce businesses. Owners' liability is limited to their invested capital, the company has its own legal identity, and registration with Companies House is mandatory.
• Limited Liability Partnership (LLP): A flexible partnership structure for two or more partners with limited liability. It is often chosen by professional service firms such as consultancies, law firms and accountancy practices.
• Sole Trader: The simplest, single-person structure with no separate legal identity. It is quick to set up, but the owner is personally liable for all debts and obligations, which is generally not recommended for foreign entrepreneurs trading internationally.
• Public Limited Company (PLC): Suitable for large-scale companies that can go public and sell shares on the stock exchange. It requires a minimum share capital and heavier reporting obligations.

For most entrepreneurs and e-commerce/Amazon sellers looking to set up a company in the UK, a Private Limited Company (Ltd) is the most suitable option, thanks to limited liability, low incorporation costs, and credibility with international customers and payment providers such as Stripe and Wise.

How to Choose and Check a UK Company Name

Name selection is the single most common reason applications are rejected. Companies House will not accept a name that is considered "same as" an existing registration; punctuation, words such as "the" and plural endings are not treated as meaningful differences.

UK company name rules

• The name of a limited company must end with Limited or Ltd.
• It cannot be identical or too similar to a name already on the register.
• Sensitive and regulated words such as "Royal", "British", "Bank" or "Insurance" require supporting evidence or permission.
• A name that conflicts with a registered trade mark can trigger an objection and a forced change after incorporation.
• Some activities additionally require a sector licence in the United Kingdom, independently of the name.

How to run a Companies House company search

The free "Find and update company information" service shows whether a name is available and, for existing companies, the current status (active, dormant, liquidation), incorporation date, registered office, directors, PSC record and filing history. Preparing at least three alternative names before filing avoids delays if the first choice is refused. Changing a name later is possible; the online change of name fee is £20.

How to Set Up a Company in the UK? Step-by-Step Companies House Process

1. Choose a company name and SIC code: At least 3 alternative names with the suffix "LIMITED"/"LTD" are proposed, and a SIC (Standard Industrial Classification) code describing your business activity is selected.
2. Appoint directors and identify PSCs: At least one director must be appointed, and People with Significant Control (PSC) over the company must be identified.
3. Registered office and registered email: A valid registered office address in the UK (a PO Box is not accepted) and, since March 2024, a mandatory registered email address must be provided.
4. Prepare the Memorandum & Articles of Association: The company's incorporation documents and articles are drafted.
5. Register electronically with Companies House: Documents and information are submitted digitally to Companies House; approval is usually granted within 24-72 hours.
6. Receive your company number: Once approved, the company receives a unique Companies House number and certificate of incorporation.
7. Register with HMRC and obtain a UTR: The company is automatically notified to HMRC and receives a Unique Taxpayer Reference (UTR) for Corporation Tax.
8. Open a business bank account: A company bank account is opened via platforms such as Wise or Stripe, or through traditional banks.

All these steps can be completed entirely online, without travelling to the UK. Professional consultancy support ensures documents are prepared correctly and the process runs smoothly.

Mandatory Identity Verification and ACSP (2025-2026 Update)

Under the Economic Crime and Corporate Transparency Act (ECCT Act), Companies House has introduced mandatory identity verification. Since 18 November 2025, identity verification has been required for newly appointed directors, PSCs (People with Significant Control) and LLP members. Existing directors and PSCs have a transition period until 18 November 2026 to complete verification.

Identity verification can be completed in two ways:

• Direct verification via GOV.UK One Login: The individual verifies their own identity through the GOV.UK system.
• Verification through an Authorised Corporate Service Provider (ACSP): A practical solution for those without a passport, those residing outside the UK, or those who prefer to delegate the process to a professional. Your formation agent, acting as an ACSP, can carry out this verification on your behalf.

This regulation aims to reduce fraudulent or fictitious company formations and improve the reliability of the Companies House register. For foreign investors, it simply adds one clear extra step; with the right consultancy support, identity verification can be completed quickly and smoothly.

Documents Required to Open a Company in the UK

Passports: Passports of each shareholder, beneficial owner and director are required.

Proof of Residential Address: Documents proving the residential address of each director and shareholder are required. These documents must be submitted in English or with certified translations.

Company Name Proposals: A minimum of 3 alternative proposed company names with the suffix “LIMITED” or “LTD” are required. These names must be approved by Companies House.

It is important to prepare these documents and fulfil the requirements for company formation in the UK. You can also benefit from a professional consultancy service to make this process easier and smoother.

Tax Rates in the UK (2026 Update)

• Personal Allowance: Income up to £12,570 is not subject to income tax.
• Corporation Tax: Small companies with annual profits below £50,000 pay 19%. Companies with profits above £250,000 pay 25%, with a tapered Marginal Relief applying between these two thresholds.
• Value Added Tax (VAT): Businesses with an annual turnover exceeding £90,000 must register for VAT (this threshold was raised from £85,000 in April 2024). The standard rate is 20%.
• National Insurance Contributions: Cover employees' and employers' social security contributions.

Capital Gains Tax is charged on an individual's profits from the sale of assets. Since April 2024, the annual tax-free allowance for individuals has been reduced to £3,000 (previously £6,000). Gains above this allowance are taxed according to the individual's income tax band. The UK tax system includes various types of tax on personal income, company profits and assets. Taxes such as VAT, income tax, corporation tax and national insurance are liabilities faced by businesses and individuals operating in the UK.

The VAT Rule for Non-Established Businesses (NETP)

The £90,000 threshold does not always apply to a UK company run from abroad. HMRC treats a business with no fixed establishment in the United Kingdom that supplies goods or services to the UK as a Non-Established Taxable Person (NETP). For an NETP there is no registration threshold: VAT registration is required from the first taxable supply. Sellers holding stock in a UK warehouse, including Amazon FBA sellers, fall into this category.

To confirm which rule creates your obligation, see our guide on how to obtain a VAT registration number.

Profit Distribution and Dividend Tax (2026/27)

A limited company first pays Corporation Tax on its profit. When the post-tax profit is distributed to shareholders as dividends, the recipient pays income tax as well. Failing to model both layers together is the most common planning mistake among overseas founders.

For shareholders who are not UK tax residents, treatment depends on the rules of their country of residence and on the applicable double taxation agreement. A cross-border review before declaring a dividend usually pays for itself.

Registered Office and Ongoing Compliance Obligations

Every UK company must have a registered office that meets the "appropriate address" requirement; it cannot be a PO Box and must be a physical location where official correspondence can be delivered. Since March 2024, companies have also been required to provide a registered email address to Companies House.

After incorporation, certain ongoing obligations must also be met:

• Confirmation Statement: A mandatory annual filing confirming that the company's director, shareholder and address details are up to date, submitted to Companies House at least once a year.
• Annual Accounts: Accounts showing the company's financial position must be filed with both HMRC and Companies House.
• Dormant Company Notification: Companies that are not trading (dormant) still have a simplified but mandatory filing requirement.

Failing to meet these obligations on time can result in financial penalties and, ultimately, the company being struck off the Companies House register.

Filing and Tax Calendar for UK Companies

Incorporation is a one-off event; the real risk sits in the ongoing calendar. The table below summarises the annual cycle of a private limited company.

Late accounts trigger an automatic penalty: £150 up to one month late, £375 for one to three months, £750 for three to six months and £1,500 beyond six months. The penalty doubles if accounts are filed late in two successive financial years.

Cost of Setting Up a Company in the UK (2026)

The cost of setting up a company in the UK consists of the incorporation fee, registered office service, accounting, and optional consultancy items:

• Companies House incorporation fee: £100 for digital (online) incorporation effective from 1 February 2026; same day incorporation is £156 and a paper filing is £124.
• Registered office/address service: Provided for a reasonable annual fee, depending on the provider.
• Accounting and annual filing services: Regular accounting support is needed to prepare the Confirmation Statement and annual accounts.
• Confirmation statement fee: £50 online, payable with the first statement in each 12 month period. This is an annual running cost rather than a formation cost.
• Minimum share capital: A Ltd company can legally be set up with a nominal share capital of just £1.
• Bank account setup cost: A one-off £45 fee for a Wise business account; fees at traditional banks may vary.

You can also review our detailed breakdown of company formation costs in the United Kingdom.

Total cost varies depending on the chosen service provider and any additional services (legal advice, tax consultancy, virtual office, etc.). Contact our consultancy team for a clear, itemised quote.

UK, Estonia, Dubai or the USA? A Practical Comparison

"Registering a company abroad" is not a single decision. Your target market, payment stack and customer base determine the right jurisdiction. The table below summarises the four locations our clients compare most often.

Current tax rates, capital requirements and annual obligations for each jurisdiction are set out on the linked service pages. Before deciding, weigh your target market, your settlement currency and where your customers are located.

Does Setting Up a Company in the UK Grant Residency or a Work Permit?

This is one of the most commonly confused topics: setting up a company in the UK does not automatically grant residency or a work permit. Company formation is a purely administrative process that can be completed entirely online, without travelling to the UK. Owning a company is a separate matter from having the right to live or work in the UK.

Entrepreneurs who wish to actually reside or work in the UK need a separate visa application (for example, business-focused visa categories such as the Innovator Founder visa). Simply having formed a company is not, on its own, sufficient for such visa applications; separate assessment criteria apply.

In short, you can set up a UK Ltd company, manage it remotely, receive payments via Wise or Stripe, and run an e-commerce business, all without being physically present in the UK or holding UK residency.

Setting Up a UK Company for E-Commerce and Amazon Sellers

The UK is a strategic location for e-commerce entrepreneurs selling via Amazon.co.uk and Amazon.eu. A UK Ltd company offers advantages such as proximity to Amazon FBA warehouses, a local brand image trusted by UK consumers, the option to obtain a UK DUNS number for supplier verification, and seamless integration with payment systems like Stripe and Wise.

Key points for non-resident entrepreneurs to consider include:

• VAT registration: Sellers storing goods in the UK via Amazon, or whose turnover exceeds £90,000, are required to register for VAT.
• Customs and imports: Since the UK left the EU, customs declarations and related duties must be considered for imports into the UK.
• Multi-currency payments: Wise and Stripe make it easy to receive payments in currencies such as GBP, EUR and USD, and to transfer funds abroad at low cost.

With the right company structure and tax planning, a UK-based e-commerce business can be a strong launchpad for entrepreneurs looking to expand into the European market.

Seven Common Mistakes When Setting Up a UK Company

These are the issues we correct most often during onboarding. Knowing them in advance saves both money and time.

1. Using a PO Box as the registered office: Companies House only accepts an address where statutory mail can physically be delivered. An invalid address can ultimately lead to the company being struck off.
2. Ignoring the registered email address: Mandatory since March 2024, it is the primary channel Companies House uses. Supplying an unmonitored inbox means missing critical notices.
3. Delaying identity verification: If directors and PSCs do not supply their Companies House personal code in time, filings are rejected and enforcement action can follow.
4. Missing filing deadlines: Late accounts carry an automatic penalty, and it doubles after two consecutive late years.
5. Assuming VAT depends only on turnover: Non-established businesses have no threshold and must register from the first supply.
6. Mixing personal and business banking: A limited company is a separate legal person; blended accounts distort the books and create problems with HMRC.
7. Confusing incorporation with immigration: Owning a UK company does not grant the right to live or work in the United Kingdom; a separate visa application is required.

A company that is not trading still has filing duties. Dormant status simplifies the paperwork but does not remove it.