Forming a Company in the UK: Complete Guide

Published on October 3, 2025 and written by Cyril Jarnias

The United Kingdom has long been a preferred destination for entrepreneurs worldwide looking to establish their businesses. With its favorable tax system, simplified procedures, and dynamic business ecosystem, the country offers an ideal environment for launching and growing a venture. In this article, we will explore in detail all aspects of starting a business in the UK.

The UK: A Land of Opportunity for Entrepreneurs

Incorporating a company in the UK offers numerous advantages that make it a top choice for entrepreneurs:

A pro-business environment: The UK is renowned for its entrepreneurial culture and openness to foreign investment. The government implements business-friendly policies and encourages innovation.

Attractive taxation: With a corporate tax rate of 19% (in 2023), the UK offers one of the most competitive tax regimes among major economies. Additionally, numerous tax incentives are available for businesses, particularly for R&D.

Simplified procedures: Starting a business in the UK is quick and inexpensive. The process can be completed entirely online in just a few days.

Access to skilled talent: The country boasts a highly skilled workforce and a world-renowned university system.

A leading financial hub: London is one of the world’s main financial centers, offering privileged access to capital and investors.

A significant market: With over 66 million inhabitants, the UK represents a substantial domestic market. Furthermore, despite Brexit, the country remains a gateway to Europe.

Most Common Legal Structures for Business

The UK offers several legal forms for starting a business. Here are the main ones:

Limited Company (Ltd)

This is the equivalent of the French SARL and the most common form for SMEs. Its main characteristics are:

– Limited liability for shareholders – Minimum share capital of £1 – At least 1 director and 1 shareholder – Profit taxation at the corporate tax rate

Limited Liability Partnership (LLP)

This hybrid structure between a company and a partnership is popular for professional services. Its specific features:

– Limited liability for partners – At least 2 partners – No corporate tax, profits are taxed directly to the partners – Management flexibility

Public Limited Company (PLC)

Equivalent to the French SA, this structure is suitable for large companies wishing to raise funds on the stock market. It requires:

– Minimum capital of £50,000 – At least 2 directors and 2 shareholders – More extensive reporting obligations

Sole Trader

This is the sole proprietorship status, suitable for small activities. Simple to set up, it does not, however, offer separation between personal and business assets.

Favorable Tax Regime for Businesses

The British tax system is renowned as one of the most competitive among major economies. Here are the main elements to know:

Corporate tax: The standard rate is 19% in 2023. It will increase to 25% in 2024 for profits over £250,000, with a reduced rate of 19% for profits under £50,000.

VAT: The standard rate is 20%. Registration is mandatory from £85,000 in turnover.

Social contributions: Employer contributions (National Insurance) amount to 13.8% above a certain threshold.

Tax incentives: Numerous tax benefits exist, including: – R&D tax credit up to 33% of eligible expenses – Patent Box reducing taxation on patent income to 10% – Investment deductions

Dividends: Dividends benefit from a favorable tax regime with an exemption up to £2,000 and reduced rates beyond that.

Tax treaties: The UK has an extensive network of tax treaties to avoid double taxation.

Incorporating Your Company in 5 Steps: A How-To Guide

Incorporating a company in the UK is a quick and simple process that can be completed entirely online. Here are the main steps to follow:

1. Choose a name Check name availability on the Companies House website. It must be unique and comply with certain rules.

2. Define the structure Choose the appropriate legal form (Ltd, LLP, etc.) and determine the partners/shareholders.

3. Prepare the documents Draft the articles of association and the registration form (IN01).

4. Register with Companies House Submit your application online on the Companies House website. Fees are £12 for standard registration (24h) or £100 for express registration (3h).

5. Register with HMRC Once the company is incorporated, register with the tax authority (HMRC) for corporate tax, VAT, and social contributions.

The complete process typically takes 1 to 3 business days. Once registered, your company will receive its registration number and certificate of incorporation.

The UK vs. Other Offshore Jurisdictions: Comparative Advantages

Although the UK is not strictly speaking a tax haven, it offers many advantages compared to other popular offshore jurisdictions:

Reputation and credibility: Unlike some tax havens, the UK enjoys an excellent international reputation. A British company inspires confidence in partners and clients.

Legal stability: The British legal system is recognized for its stability and reliability, offering better protection than offshore.

Market access: The UK provides access to a vast domestic market and remains a gateway to Europe despite Brexit.

Attractive but not aggressive taxation: The British tax regime is competitive while remaining compliant with international standards, avoiding risks associated with blacklisted jurisdictions.

Ease of management: Creating and managing a company in the UK is simpler and less expensive than in many tax havens.

Business ecosystem: The country offers a developed business environment (talent, funding, etc.) not found offshore.

Social Obligations: What You Need to Know

Social obligations in the UK are generally less burdensome than in France, but it is important to know them well:

National Insurance (NI): This is the equivalent of social contributions. The employer must pay 13.8% of the salary above a certain threshold (£9,100 per year in 2023).

PAYE (Pay As You Earn): This is the pay-as-you-earn income tax system. The employer must calculate and deduct tax from salaries.

Pension auto-enrolment: Companies must set up a supplementary pension system for their employees, with a minimum employer contribution.

Minimum wage: The National Living Wage is £10.42 per hour for those over 23 (in 2023).

Paid leave: The legal minimum is 28 days per year for full-time employees, including public holidays.

Mandatory insurance: The employer must take out employer’s liability insurance.

Opening a Business Bank Account: Key Steps

Opening a business bank account in the UK can be complex for a foreign company, but it is an important step. Here is the procedure to follow:

1. Choose a bank The main British banks are HSBC, Barclays, Lloyds, and NatWest. Some online banks like Revolut Business or Wise can be interesting alternatives.

2. Prepare the documents You will generally need: – Company certificate of incorporation – Articles of association – Identity and address proofs for directors and shareholders – Business plan and financial forecasts – Proof of company address in the UK

3. Schedule an appointment Contact the chosen bank to schedule an appointment, often in person for traditional banks.

4. Pass the checks The bank will conduct thorough checks (KYC, AML) before approving the account opening.

5. Activate the account Once approved, you can activate the account and start using it.

The process can take several weeks, or even months for foreign companies. It is recommended to start early.

Most Promising Business Sectors

The UK offers opportunities in many sectors. Here are some of the most promising:

Technology and digital: The country is a major hub for tech startups, particularly in fintech, AI, and cybersecurity.

Financial services: Despite Brexit, London remains a leading financial center, offering numerous opportunities.

Creative industries: The UK excels in media, design, fashion, and video games.

Life sciences: The country is at the forefront of biotechnology and medical research.

Renewable energy: The government is heavily investing in the energy transition, creating opportunities in this sector.

E-commerce and retail: The British market is one of the most mature in Europe for online commerce.

Education: The edtech sector is booming, driven by the reputation of British universities.

Recruiting in the UK: Keys to Building Your Team

Recruitment in the UK has certain specificities that are important to know:

Employment contracts: There are different types of contracts (permanent, fixed-term, part-time, zero-hour). Make sure to choose the one most suited to your needs.

Probation period: It is generally 3 to 6 months, but can be longer for senior positions.

Recruitment process: It is often faster than in France. Multiple interviews are common, sometimes with practical tests.

Recruitment channels: Use specialized job boards (Indeed, Reed), LinkedIn, and recruitment agencies which are very active in the UK.

Work visa: Since Brexit, EU nationals must obtain a visa to work in the UK. The points-based system favors skilled workers.

Corporate culture: British professional culture values autonomy and initiative. Adapt your management accordingly.

Training: Investing in continuous training for your employees is strongly encouraged and can benefit from tax advantages.

Conclusion: The UK, a Strategic Choice for Business

Incorporating a company in the UK offers many advantages for entrepreneurs: a pro-business environment, attractive taxation, simplified procedures, and access to a vast market. Despite uncertainties related to Brexit, the country remains a top destination for launching and developing an international business.

The key to success lies in good preparation and a thorough understanding of the British system. Do not hesitate to seek assistance from professionals to optimize your establishment and make the most of the opportunities offered by the UK.