Subsidiary vs. Branch
A comprehensive solution to help you set up in the UK when entering the market from overseas.
Incorporating a company in the UK means that your company will legally exist in the UK, with a valid company number and a date of incorporation. The great thing for you and your business, is that when working with Goodwille, we can help you through the whole process from application to incorporation, and support you with the ongoing compliance once the entity is established. To open a UK company you do not need to be a UK resident, or have a UK based Director, but you will need a UK registered office. Goodwille can provide a business address either in the UK’s capital, London, or in the heart of the Midlands, Warwick.
Selecting whether to register as a branch or subsidiary is entirely dependent on your company, your location, the type of operation you carry out, and the activities you need to take place in the UK. Partnering with Goodwille will give you the opportunity to make the right choice for your business whilst also maintaining your operations both abroad and in the UK legally.
When deciding on how to run the UK based operation of your company it’s important not to confuse subsidiaries with branches. A subsidiary is an entirely separate company whereas the branch is essentially an offshoot of the same company in a different location.
UK Establishment (UK Branch)
A UK establishment – or branch – is not a separate entity from the head office company. When expanding to the UK from overseas, it is important to remember that the company will be headquartered in its head office and the branch will still be legally part of the overseas company. The overseas company and all of its directors will be responsible for the branch.
- Register with companies house
- Register with HMRC for corporation tax (only applicable if you reach the VAT threshold, or they have UK employees for PAYE).
- Filing financial statements at Companies House
How is it different for online businesses?
For online businesses, as they do not have a physical location, although the business is a part of the overseas company, UK law states that if a company has servers located within the UK, then a permanent established is identified in UK law. Therefore, any business that meets this criterion, it will need to register as per the above.
Subsidiary (Limited Company)
A UK Subsidiary, on the other hand, is a separate legal entity whereby the company is subject to paying UK corporation tax on worldwide profits. They will be required, by law, to file annual financial statements with Companies House for public inspection. In addition to this, copies will need to be filed with HMRC. A subsidiary of a company is formed by registering with the country in which the company operates. So, if your business is based in Sweden but you want to open a UK operation, you could open a subsidiary within the UK by registering at Companies House.
Re-registering occurs when a company changes status, such as from private limited to public companies, limited to unlimited, for example.
Meet A Corporate
Vidou supports clients with both day-to-day administrative tasks, such as the drafting of corporate documentation and ensuring statutory deadlines are met, as well as more complex matters such as VAT and other registrations, corporate insurance requirements, health & safety advice and other regulatory compliance matters. Being a central point of contact for all her clients, she further supports them by providing any additional assistance or advice as may be required.