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- Setting Up An Offshore Company in the UK
Setting Up An Offshore Company in the UK
- Modified: 10 July 2025
- 9 min read
- Foreigner's Guide, Incorporation
Syahirah Aiman Abbas
Author
Syahirah Aiman Abbas is a writer and translator who loves languages. After learning Malay, English, Arabic, Indonesian and French, now she is on to Turkish!
Establishing an offshore company in the UK offers numerous advantages, from favourable tax regimes to robust legal frameworks and a prestigious international reputation. The UK’s stable economic environment and well-developed corporate infrastructure make it an attractive destination for entrepreneurs and investors seeking to expand their global footprint.
So, why set up an offshore corporation? There’s a range of benefits, and the incorporation process of setting up in an offshore region like the UK is pretty straightforward.
What Is an Offshore Company?
An offshore company is a company incorporated or registered away from the country of its investors and the region of its main operation and offices. Usually, it operates outside the country where it is formed. Knowing how to set up an offshore entity can help you get on your way to achieving your business goals or growing your assets.
Offshore jurisdictions offer a range of benefits to foreign owners looking to reduce their tax burden and enjoy less stringent regulations and policies.
The UK is a popular offshore company jurisdiction thanks to low setup costs, fast registration, and global credibility. In 2024, over 850,000 companies were formed, with 1 in 10 involving international stakeholders (gov.uk). It's a solid choice for holding assets, trading, or managing contracts.
Why Set Up an Offshore Company in the UK?
Setting up an offshore company in the UK can offer international businesses a credible address, access to a stable legal system, and proximity to global financial markets. Whether you're expanding operations or seeking a tax-efficient structure, the UK remains a popular jurisdiction for its transparency, investor confidence, and flexible company laws.
1 Tax treaty network
One of the reasons why the set up of an offshore entity is compelling for savvy business owners is the UK’s largest network of double tax treaties. With this tax treaty network of 100+ globally, UK companies can be a very efficient vehicle for minimising withholding taxes on dividends received. Better yet, the offshore company setup is pretty straightforward, so there’s a lot to gain and very little pain.
2 Low cost of maintenance of a UK company
The cost of maintenance of a UK company is among the lowest in developed jurisdictions such as Norway and New Zealand, with comparable reputation, international respectability and protection.
3 Share capital
If you’re considering setting up an offshore company and considering the cost requirements for getting started, you’ll be glad to know that there’s no minimum paid-up share capital requirement and no capital tax on authorised or issued shares.
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4 Audit of accounts
There are no audit requirements to set up an offshore structure if you meet the following criteria:
- Turnover below £1,000,000
- Net assets of less than £1,400,000 (unless of course, the offshore company you want to set up is part of a larger qualifying group).
5 Ease of establishment
What if you could set up an offshore company in the UK within just 24 hours? With off-the-shelf companies available, you can set up a tailor-made company based on your specific requirements and do exactly that.
6 International respectability and protection
UK companies are often used to acquire assets in certain foreign locations to minimise risks of property dispossession by foreign governments.
Setting up your company in the UK is simpler than you might think. Osome makes offshore company registration easy, guiding you through the process so you can tap into the UK’s business-friendly environment and start operating with confidence.
Characteristics of a UK Offshore Company
When setting up an offshore corporation and going through the incorporation process, the names of your company officers as well as director and shareholder information, will appear on public record. Once you’ve selected the type of company you want to set up offshore and chosen an approved name, it’s then on to the registration set up process and submission of relevant documentation. Let’s take a look at the features of a LTD offshore firm opened in the UK to unpack these characteristics:
Features of UK Offshore Company (Private Limited Company – Ltd):
| Minimum Number of Individual Directors | 1 |
| Local Registered Office Required | Yes |
| Local Registered Office Required | No |
| Local Company Director Required | No |
| Public Register of Beneficial Owners | Yes |
| Public Register of Directors | Yes |
| Taxation on Profits Derived Outside UK* | 19% |
| Annual Tax Return Required | Yes |
| Annual Submission of Accounts Required | Yes |
| Corporate Director Permitted (in addition to 1 individual director) | Yes |
| Annual General Meeting Required | Yes |
| Annual General Meeting Location | Anywhere |
| Minimum Paid Share Capital | Nil |
You need to pay the local taxes on profits made in other countries, too.
Choosing the Right Offshore Company Structure: IBC, LLC, or Pte. Ltd
Your company structure often comes down to your chosen jurisdiction and the business structure you expect based on your key operations and strategic business roadmap. Normally, there are three offshore company structures widely chosen by business players moving offshore. We’ve unpacked each in more detail, but below is a snapshot of what to consider when setting up offshore and jurisdiction recommendations for each company structure.
Private Limited Company (Pte. Ltd)
Best for: Businesses operating in established financial hubs with transparent governance.
Recommended offshore jurisdictions:
- Singapore
- Hong Kong
Key features:
- Privately held business entity
- Maximum of 50 shareholders
- Shares cannot be publicly traded
- Shareholders enjoy limited liability
- Can own assets, enter contracts, and take legal action in its own name
- Foreign-sourced income may be taxed at lower rates or be tax-exempt
- Stringent reporting and compliance obligations
International Business Company / Business Company (IBC/BC)
Best for: Entrepreneurs seeking flexibility, minimal taxation, and confidentiality.
Recommended jurisdictions:
- Belize
- British Virgin Islands (BVI)
- Seychelles
- Marshall Islands
- United Arab Emirates (UAE)
Key features:
- Only one director and one shareholder required (can be the same person)
- Fast and simple incorporation process
- Low or zero tax if no business is conducted locally
- High level of privacy
- Access to international banking
- Minimal reporting requirements
- Suitable for international trade, investment holding, or consulting
Limited Liability Company (LLC)
Best for: Flexible structures with personal asset protection and low compliance.
Recommended jurisdictions:
- Belize
- Nevis
- Cook Islands
- St. Vincent & the Grenadines
Key features:
- No shareholders or directors — only members (minimum of one)
- Combines elements of partnerships and corporations
- Limited liability protection for members
- No local tax on foreign-sourced income or assets
- Minimal reporting and compliance burden
- Suitable for asset protection and international operations
Choose the right company structure with confidence
Unsure which company structure is best for your business? Our team of experienced advisors in the UK is here to guide you through the decision-making process.
Deciding on an Appropriate Offshore Jurisdiction
The offshore structures across different jurisdictions may have a lot of similarities, but they’re not all set up and run the same. That’s why it’s essential to know how to set up an offshore company in a jurisdiction that makes the most sense.
There are a few considerations that will come in handy when deciding on the right place for your offshore business set up to kick off.
If you plan to visit regularly or have easy geographical access, you’ll want to factor in proximity when establishing an offshore company.
Wherever you decide to set up an offshore entity, make sure you stay up to date with the regularly-changing policies and industry regulations. This is why you want to make sure you set up in a jurisdiction that’s complementary to your chosen company structure and suits the nature of your business.
You also need to take the reputation of the jurisdiction into consideration, as it may affect the growth of your business and your future potential. Seek to establish an offshore business in a place that boasts a sound and stable reputation for business owners. Tax minimisation, favourable rates and low taxation on foreign-sourced income will also benefit your business.
Make sure to check whether or not your chosen place of incorporation is on the non-cooperative list by the EU Council. If you plan to trade or even expand to the EU this is an important element in your decision-making.
Liability to Income Tax, Capital Gains Tax, and VAT
Once you have set up your offshore company, the HM Revenue and Customs (HMRC) will issue you a Unique Taxpayer Reference number (UTR). Your UTR is sent to your registered address along with instructions on company registration, accounts filing, and corporate tax payments.
UK Tax and Capital Gains Tax (CGT) for offshore companies
When setting up offshore companies as a non-resident in the UK, you are generally not expected to pay CGT. The reach of CGT depends on the taxpayer’s residence, not on where an asset is situated. There’s usually no CGT arising from the disposal of UK assets for an offshore company (unless the gain is caught by the corporation tax charge).
Every rule has an exception. If your offshore entity trades or invests in UK property, it may be liable to pay corporation tax or income tax on income gained through UK real estate. Where corporation tax applies, capital gains are also brought within the charge.
Every rule has an exception. If your offshore entity trades or invests in UK property, it may be liable to pay corporation tax or income tax on income gained through UK real estate. Where corporation tax applies, capital gains are also brought within the charge.
| UK Corporation Tax | UK incorporation regulations require Private Limited Companies to pay 20 – 28% (determined after filing annual returns). |
| UK Income Tax | Company Directors are taxed on company profits. |
| Dividends Tax | No taxes are paid on the dividends of a holding company in the UK, and there is no double taxation on dividends distributed to EU member countries. |
| CGT | This is tax on the profits you make when selling or disposing of a business asset that’s increased in value. The tax applies only to the profit you gained, not the full amount received for the asset |
Example
Let’s say a property is owned by an offshore company, Jamo Pte. Ltd. Only the basic rate of UK income tax (20%), will apply regardless of income level. This can result in a substantial saving when compared with personal ownership under which the banded UK income tax rates (up to 50%) will apply. The basic rate tax would be deducted at the source by an agent or the tenant. It is possible for the owner to apply to HMRC for a clearance to allow them to receive the income in gross.
You bought a studio apartment for £150,000, which later sold for £200,000. This means you gained £50,000 worth of capital (£200,000 minus £150,000).
UK VAT – what is the VAT rate in the UK?
VAT, or Value Added Tax, is levied on selling goods and services in the UK. The Standard VAT rate in the UK is 20%. The VAT Reduced rate of 5% applies to some goods and services, such as children’s car seats and home energy.
If you have set up an offshore company that does not have an annual turnover of more than £90,000, then Registration of VAT is not required. A Company that does register can collect a number of benefits through registration, such as the ability to reclaim input tax and collect VAT from customers. Companies register through the HMRC website.
Some things are exempt from UK VAT, such as postage stamps, financial transactions, and property transactions. The VAT rate which businesses charge registration depends on their goods and services.
The essential VAT guide for SMEs in the UK
We covered all you need to know about VAT: VAT rates, registration for VAT, and the best VAT schemes for your business in the UK.
Advantages of Setting Up an Offshore Company
1 Privacy
There are many confidentiality and privacy benefits to setting up offshore companies, as you’re conducting your business operations and financial transactions in the name of a legal entity — in this case, your offshore corporation.
This is because the details of the individuals who are linked to companies set up offshore are not divulged by most financial centres (unless required as part of a criminal investigation).
2 Asset protection
Asset protection from future liabilities is made possible when assets are placed into overseas legal structures and offshore corporations. Tracking them down via an asset search is tricky when investments, trusts, and bank accounts are in possession of your offshore corporation. This screens your finances from public view, providing effective asset protection for the company you set up offshore.
3 Legal protection
Legal action pursuits typically involve an asset search to ensure that any negative judgements made against you can be covered financially. Establishing an offshore corporation and assigning asset ownership to the business means it’s associated with your name. By incorporating offshore, you can legally shield your assets from court rulings or legal opponents.
Ready To Take Your Business Offshore?
Knowing how to set up an offshore business can lead your business down a path to success. But consider every aspect of the process, from your company structure to understanding the local jurisdiction and your liability to taxation policies. If you’re considering registering an offshore corporation, we’ll gladly take the admin off your hands so you can get down to business.
Syahirah Aiman Abbas is a writer and translator who loves languages. After learning Malay, English, Arabic, Indonesian and French, now she is on to Turkish!
