Setting Up a Company in the UK

Setting Up a Company in the UK: Costs and UK Tax Rates for 2025

England, one of the most important countries in world trade thanks to its political and economic power, is among the first choices of entrepreneurs from many countries in Europe and the world who want to start a new business. The fact that England has a stable economic power, provides permanent residence permits to citizens of different countries in return for regular investments, and the fact that the corporate tax is at a low level of 19% stand out as the biggest advantages for those who want to invest in England.

Starting a business in the UK is much easier than in many European countries. A new business start-up takes an average of 20 days worldwide and 12 days in Europe, but in the UK it takes an average of 5 days. According to data published by the World Bank, the UK ranks 8th out of 190 countries in the ease of doing business index.

Can Citizens of the Republic of Türkiye Establish a Company in the UK?

Citizens of the Republic of Türkiye have the right to establish a company in the UK.

What are the Requirements for Opening a Company in the UK?

The requirements for opening a company in the UK are listed below.

  • At least one real person (non-legal entity) must be appointed as a manager to the company.
  • All directors appointed to the company must be at least 16 years old.
  • The company must have a registered office in England or Wales.
  • The company name chosen must not be the same or too similar to the name of an existing registered company.
  • At least one share must be issued at the establishment of the company.

What are the UK Company Types?

The types of companies that can be established in the UK are listed below.

  • Sole trader
  • Partnership company
  • Limited company

Turkish citizens who aim to establish a company in the UK should determine the type of company according to the investment amount, company partnership structure and the company’s business plan. rsscanadaimmigration.com is a corporate agency that has been providing consultancy for company establishments in the UK since 2016 and following the entire process from visa procedures to bank account opening.

What is a UK Sole Trader?

A sole proprietorship is the most common type of company among new businesses in the UK, as it is easier to set up and manage than other types of companies. In a sole proprietorship, the person who opens the company manages the company themselves, and therefore owns all of the remaining income after paying the necessary taxes; however, if the company makes a loss, they must take full responsibility.

A person wishing to establish a sole proprietorship must register with the UK Revenue and Customs (HMRC) and pay tax to this authority on an annual basis. If the annual turnover of the company is less than £85,000, no VAT is required; however, companies with an annual turnover of more than £85,000 must register with the VAT system.

What is a UK Limited Company?

Those who want to establish a limited company in the UK have two options: public limited company (PLC) and private limited company (LTD).

To establish a UK public limited company, it is necessary to have a capital of at least £50,000, at least two partners, at least two directors, one of whom must be a natural person over the age of 16, and a company secretary. The biggest advantage of public limited companies over private limited companies is that the company is listed on the stock exchange and its shares can be sold on the stock exchange.

There is no minimum capital limit for establishing a private limited company in the UK and a director over the age of 16 and a shareholder are sufficient. The person who will be the director of the company must not have previously gone bankrupt. Private limited companies are more widely preferred in the UK because they have fewer conditions than public limited companies. It is possible for a company established as a public limited company to later become a private limited company by fulfilling the necessary conditions.

To establish a limited company in the UK, a company name that is not used by another company and a company address in the UK must be determined and all necessary documents must be completed and reported to Companies House.

What is a UK Partnership?

A partnership firm is a type of firm formed by two or more partners coming together to establish a firm. In a partnership firm, the income and loss of the firm are the responsibility of the partners, and all partners are required to pay taxes separately on their own shares. One of the partners of the firm is required to be responsible for keeping records of the firm’s business records and the partnership’s tax returns.

In order to set up a partnership company in the UK, it is first necessary to make a formal notification to HMRC. It is also possible for one of the partners in the partnership company to be a legal entity, for example, a partnership company can be formed in the UK by forming a partnership with a limited company.

What are the Stages of Establishing a Company in the UK?

In order to establish a company in the UK, a detailed business plan must first be prepared according to market research and budget estimates, and then the type of company must be determined. After determining the type of company, the name and address of the company must be selected. If the company to be established is a limited company, the selected name must be officially registered. In limited companies, it is also required to determine the manager at the first stage.

Below are the preliminary steps required to establish a limited company in the UK.

  • Determining a company name: The first step in establishing a limited company is to determine a suitable company name. The company name must not be used by any other company. Also, company names must not contain any prohibited words.
  • Determining a company address : Individuals wishing to establish a limited company must determine a company address in the UK. This address will appear on the public register and must be registered with Companies House. Companies House is the institution that must be applied to in order to establish a company in the UK.
  • Appointing a manager: For private limited companies, it is sufficient to have only one manager. There is no limit on the number of managers. Individuals over the age of 16 have the right to be managers in limited companies. The company manager must not have been previously banned from any company or have gone bankrupt.
  • Identifying shareholders: A minimum of 1 shareholder is required to form a limited company. The number of shareholders can be greater. Shareholding formalises the partnership structure of the business. Any individual who owns at least £0.01 of a share in a company can be considered a shareholder.

Once the basic steps have been completed, an application must be made to the UK Revenue and Customs (HMRC) to register the company with the tax system. Limited companies must be registered with the registry Companies House as well as HMRC. Certain information and documents must be submitted in order for Companies House to identify individuals as directors of a company. Individuals must first determine a SIC (Standard Industrial Classification Code) for the business they will set up and inform Companies House of the sector in which the business will be located. The most appropriate SIC code for the organisation must be selected from the SIC codes determined from Companies House.

To complete the company formation, the following documents must be submitted to Companies House:

  • Limited company name, location and type
  • Form 10 (a form containing the names, addresses and registered limited company address of the directors)
  • Form 12 (a document showing that the limited company complies with the terms and conditions of the Companies Act)
  • General agreement (a company agreement outlining the powers of directors, as well as shareholder rights etc.) The company establishment process will be completed once the above documents are delivered to Companies House in full and in the required form.

A limited company can be formed for individuals who meet the requirements, usually within 24 hours, once the directors, address and shareholders have been notified to Companies House with the required documentation.

Is it possible to set up an online company in the UK?

It is not possible for citizens of the Republic of Türkiye to establish a company online in the UK. Those who want to establish a company in the UK must go to the UK with an investment visa and complete the company establishment process.

How Long Does It Take to Open a Company in the UK?

Establishing a company in the UK is completed within an average of 24 working days, including visa procedures, according to the establishments established in the last 4 years under the consultancy of rsscanadaimmigration.com.

How Much Does It Cost to Form a UK Company?

The cost of establishing a company in the UK varies depending on the area of ​​business the company operates in, the region it is established in and its size, but the average cost of establishing a company is £5,000. The average cost of a newly established company in the UK in the first year is £22,000. In addition to the cost of establishing a company, accounting, human resources and legal expenses are the most expensive items spent in the first year.

In rsscanadaimmigration.com consultancy, other costs for company establishment are calculated in line with the service to be received.

What is the UK Tax System and Rates?

The tax system and amounts vary depending on the type of company in the UK. Below is information on the UK tax rate and UK tax system.

  • UK corporation tax: UK corporation tax is a type of tax applied to the amount of profit made by businesses during the financial year. Payments must be made 9 months and 1 day after the end of the business’s accounting period. The UK corporation tax rate is set at 19%. Payments are generally due on January 1 each year.
  • UK income tax: Income tax is a type of tax levied on individual income, such as wages. Income tax for a limited company director is paid via PAYE. PAYE is a UK (HM) Revenue & Customs Office (HMRC) system used to collect income tax and national insurance benefits from employment, meaning pay as you earn. For sole traders, income tax is paid based on the profits from the business included in the self-assessment tax return.
  • National insurance: National insurance helps to supplement the state pension and pay for public services. As with income tax, national insurance is charged through PAYE for limited company directors. Sole proprietors pay their payments directly to HMRC by 31 January.
  • UK VAT rate: Value added tax is a consumption tax added to the cost of goods and services. In the UK, companies only have to pay VAT in certain circumstances. A company must pay VAT if its annual turnover exceeds £85,000. The UK VAT rate is set at 20% as of 2011. Postage stamps, finance and property transactions are exempt from VAT. The VAT rate charged by a business varies depending on the goods and services it provides.

What are the advantages of establishing a company in the UK?

The most important advantage of establishing a company in the UK is that the UK is known as a stable economic area with a very good position in Europe. For this reason, investors have the advantage that their companies can operate better in international markets.

Turkish citizens who establish a company in the UK and earn sufficient income and pay tax may be eligible for permanent residence in the UK. The UK corporate tax rate of 19% is also among the advantages of establishing a company in the UK. The UK has mutual tax agreements with many countries such as the Netherlands, Poland, Canada and Germany, which provide advantages for investors. There is no minimum capital requirement to establish a limited company in the UK.

Is it possible to open a branch in the UK?

It is possible for a company established in residence to living in his country and to open a branch in the UK. An application must be made to Companies House to open a company branch in the UK. If a company established in any country opens a branch in the UK to conduct business on behalf of the company located, within 1 month of the date the branch was established;

  • BR1 Form,
  • The original contract of the parent company and its English translation by a sworn translator,
  • The company’s profit-loss-balance sheet data for the last year, and
  • Form 691 must be lodged with Companies House.

rsscanadaimmigration.com has provided consultancy services for the opening of branches in the UK for 27 joint stock companies and 12 limited companies operating.

Frequently Asked Questions

The most frequently asked questions about setting up a company in the UK are answered below.

What are the requirements for opening a bank account in the UK?

Citizens of different countries who want to open a bank account in the UK must apply to bank branches with the necessary documents. Banks such as HSBC, Barclays, Nationwide and Monzo stand out as the most preferred banks by foreigners who want to open a bank account in the UK.

To open a bank account, a passport, a biometric residence permit (BRP), a reference letter from the workplace and a residence document showing the address where the person is staying must be presented. After the necessary documents are prepared to open a bank account in the UK, it is possible to open a bank account in just a few hours by going to the bank branch.

Can I Open a Paypal Account in the UK?

Yes, a paypal account can be opened in the UK, having a valid address in the UK for transactions helps to prevent future grievances. The biggest grievances experienced after establishing a paypal account in the UK are money transfers and account suspensions.

rsscanadaimmigration.com provides consultancy and support services on virtual office solutions in the UK and opening a Paypal account in the UK.

How to Establish a Company in England with the Ankara Agreement?

With the UK’s withdrawal from the European Union, the terms of the Ankara Agreement have been repealed, so it is not possible to go to the UK and establish a company within the scope of the Ankara Agreement.

Can I Set Up a Cleaning Company in the UK?

Yes, it is possible to establish a cleaning company in the UK. Establishing a cleaning company in the UK is often preferred by Turkish citizens in terms of ease of business planning and fulfillment of employment requirements.

What are the types of visas available to start a business in the UK?

The types of visas that can be obtained to set up a business in the UK are listed below.

Is it possible to obtain residence in the UK by establishing a company?

It is possible to establish a company in the UK and obtain a residence permit. A 2-year residence permit can be obtained with a UK startup visa, a 3-year residence permit with an innovator visa, and a 5-year residence permit with a talent visa. Visa extensions can be made for talent and innovator visas, and at the end of a 5-year regular residence period, the right to apply for a permanent residence permit can be obtained.