Registering a Branch in the UK.
Legal presence in the UK
Registering a branch in the UK is not a separate legal entity. It is governed by the law and regulations of where the parent company is located. The branch is registered at Companies House as an overseas entity.
Tax
A UK Branch may be able to offset some of its losses against profits from other territories (if applicable). Sometimes it is advantageous to start with one structure and then to transfer the UK business to the other structure.
For example, the starting up costs and initial trading losses of a branch may be deductible from taxable profits of the overseas company in its home country but this advantage will be lost when the UK branch becomes profitable in its own right.
Commercial viability
In terms of commercial viability as the branch is governed by non-UK law, it may be difficult to request for grants, loans and other such finances.
It is not unheard of for a UK company to decline doing business with a UK branch – simply because the UK branch has no legal presence as such in the UK.
A typical example is attempting to obtain a mobile phone contract for the UK team, but because it is an overseas company, the provider refuses to setup a new contract.
It may also be problematic for VAT Registration unless substantial evidence can be provided to support a genuine reason why the branch should be registered for VAT in the UK.
Filing of accounts to UK Companies House
A UK branch operation must disclose the accounts of the overseas parent company to Companies House in the UK.
Along with the balance sheet, the full profit and loss statements must also be published to Companies House. This means any interested party to the UK branch can have access to this data – including potential customers and employees.
If the accounts of the holding company are in a foreign language they must be translated. Those overseas companies who are not required to file in the home territory may find this particularly unwelcome.
Audit
A branch in the UK does not require an audit.
Registering a branch in the UK is not a separate legal entity. It is governed by the law and regulations of where the parent company is located. The branch is registered at Companies House as an overseas entity.
Tax
A UK Branch may be able to offset some of its losses against profits from other territories (if applicable). Sometimes it is advantageous to start with one structure and then to transfer the UK business to the other structure.
For example, the starting up costs and initial trading losses of a branch may be deductible from taxable profits of the overseas company in its home country but this advantage will be lost when the UK branch becomes profitable in its own right.
Commercial viability
In terms of commercial viability as the branch is governed by non-UK law, it may be difficult to request for grants, loans and other such finances.
It is not unheard of for a UK company to decline doing business with a UK branch – simply because the UK branch has no legal presence as such in the UK.
A typical example is attempting to obtain a mobile phone contract for the UK team, but because it is an overseas company, the provider refuses to setup a new contract.
It may also be problematic for VAT Registration unless substantial evidence can be provided to support a genuine reason why the branch should be registered for VAT in the UK.
Filing of accounts to UK Companies House
A UK branch operation must disclose the accounts of the overseas parent company to Companies House in the UK.
Along with the balance sheet, the full profit and loss statements must also be published to Companies House. This means any interested party to the UK branch can have access to this data – including potential customers and employees.
If the accounts of the holding company are in a foreign language they must be translated. Those overseas companies who are not required to file in the home territory may find this particularly unwelcome.
Audit
A branch in the UK does not require an audit.