Registration of a Branch Office in the United Kingdom
Registering a branch office in the United Kingdom is an important and advantageous step for foreign companies looking to expand their operations into one of the most developed and attractive markets in the world.
The United Kingdom offers a favorable business environment, a stable legal system, and access to a large number of consumers and business partners. By opening a branch, companies can better serve their clients, enhance their competitiveness, and strengthen their positions in the international market.
Legal Status of a Branch
A branch is not a separate legal entity but a part of the parent company, which is registered outside the United Kingdom. It acts on behalf of the parent company, which is responsible for its operations. This means the parent company exercises full control over the branch, establishing its policies, procedures, and business directions.
It is important to distinguish between a branch and a subsidiary, as a subsidiary is a separate legal entity with its own legal structure, can enter into contracts in its name, and bears its own legal responsibility. Thus, opening a branch allows a company to expand its presence in foreign markets without creating a new legal entity, which can be beneficial in terms of management and cost:
- opening a branch does not require the establishment of a minimum share capital;
- the financial results of the branch are included in the parent company's reports;
- the parent company has direct control over the branch, allowing for better management of operations and the implementation of corporate policies.
Registration of a Branch in Companies House
To register a branch in the United Kingdom, it must be registered with Companies House. The following documents need to be submitted during registration:
- completed BR1 form;
- a copy of the parent company's constitutional documents translated into English;
- information about the directors and secretaries of the parent company;
- the branch's legal address in the United Kingdom;
- a copy of the parent company's public financial statements.
The branch name must comply with Companies House requirements. It should not duplicate existing company names in the United Kingdom and must meet ethical and legal standards.
Depending on the branch's type of activity, additional licenses or permits may be required. For example, if the branch provides financial services, it must obtain permission from the Financial Conduct Authority (FCA).
Obligations for a Branch in the United Kingdom
The branch must register for tax purposes with HM Revenue and Customs (HMRC). The main taxes that may apply to the branch include:
- Corporation Tax;
- VAT (if the branch's turnover exceeds the established threshold).
On the "Consultant" legal marketplace, you can order an online tax consultation to fully understand your financial obligations in the United Kingdom and avoid problems and penalties.
The branch must maintain separate accounting records of its activities in the United Kingdom and submit reports to Companies House and HMRC. This includes annual financial statements and tax returns.
The branch is required to comply with all local laws and regulatory requirements, including labor laws, health and safety regulations, data protection, and environmental laws.
The branch may hire employees in the United Kingdom, adhering to local labor laws. This includes signing employment contracts, complying with the National Minimum Wage, working hours, vacations, and working conditions.
Advantages of Opening a Branch in the United Kingdom
- The procedure for registering a branch in the United Kingdom is relatively simple and fast, allowing companies to start their operations quickly;
- The existence of double taxation avoidance agreements can reduce the tax burden for foreign companies;
- No minimum share capital is required to open a branch in the United Kingdom;
- Clearly defined shareholder rights;
- Court decisions made in the United Kingdom are widely recognized, which is an important advantage for resolving international commercial disputes.
The advantages of opening a branch in the United Kingdom make this country one of the best options for foreign companies seeking to expand their business internationally. The country provides a reliable and transparent legal system that protects the interests of companies and promotes their development.
Why Should You Consult a Lawyer When Opening a Branch in the United Kingdom?
Specialists in international business law are well-versed in UK legislation and regulatory norms, which helps avoid legal mistakes and ensure full compliance of the branch's activities with local laws.
They assist in correctly preparing all necessary documents, registering the branch with the appropriate authorities, and providing consultations on tax obligations and other legal aspects.
Additionally, lawyers can represent the company's interests in negotiations, resolve potential legal disputes, and ensure the protection of intellectual property. Therefore, consulting a lawyer helps entrepreneurs minimize risks, save time and resources, and successfully start their business in the United Kingdom.
