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- Setting Up An Offshore Company in the UK
Setting Up An Offshore Company in the UK
- Modified: 30 October 2025
- 9 min read
- Foreigner's Guide, Incorporation
Syahirah Aiman Abbas
Author
Syahirah Aiman Abbas is a writer and translator with a passion for languages. She speaks Malay, English, Arabic, Indonesian, and French, and is learning Turkish. Syahirah applies her multilingual abilities and creativity to produce engaging and diverse content for UK readers.
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.
Key Takeaways
- Setting up a UK-based offshore company provides access to a trusted legal system, strong international credibility, and extensive double tax treaty benefits.
- Company incorporation requires minimal capital and offers relatively low maintenance costs, particularly for entities qualifying for audit exemptions.
- Compliance with Companies House registration, annual filing obligations, and transparency requirements is essential to maintain good standing.
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.
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.
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.
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 according to GOV.UK. It's a solid choice for holding assets, trading, or managing contracts.
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.
The UK’s appeal as an offshore base lies in its rare balance of credibility and convenience — with over 100 tax treaties, minimal share capital requirements (often just £ 1 per share), and low maintenance costs, it offers global entrepreneurs an efficient platform for cross-border operations.
Accounting Manager
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 the 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 process and submission of relevant documentation. Let’s take a look at the features of an LTD offshore firm opened in the UK to unpack these characteristics:
| 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 |
Be aware that you’re required to pay local taxes on any profits earned in other countries.
Choosing the Right Offshore Company Structure
When setting up an offshore business in the UK as a non-resident, choosing the right legal structure is essential. Two of the most common options are the Limited Liability Partnership (LLP) and the Limited Liability Company (Ltd). Each offers distinct advantages in terms of liability, taxation, and reporting requirements, making it important to select the one that best aligns with the business goals and operational model.
| Feature | Limited Liability Partnership (LLP) | Limited Liability Company (Ltd) |
| Ownership and management | Requires at least two members who can be either individuals or corporate entities. Members share management responsibilities. | Needs at least one director and one shareholder; a single person can hold both roles. |
| Residency rules | All partners can reside outside the UK. | Directors and shareholders can be non-residents, offering flexibility for international founders. |
| Tax treatment | Functions as a pass-through entity: profits are taxed in the hands of partners, not at the entity level. | The company is taxed on worldwide profits, irrespective of where owners live. |
| Public disclosure | Must report Persons with Significant Control (PSCs) to Companies House, but some confidentiality is possible through corporate partners. | Details of directors and PSCs are publicly available, ensuring full transparency. |
| Financial reporting | Dormant or simplified accounts can be submitted if the company is inactive in the UK and partners are non-residents. | Annual accounts and a confirmation statement must be filed with Companies House, even if minimal activity occurs. |
In general, LLPs are well-suited for professional services and partnerships where profit is distributed directly to members, offering flexibility and potential tax advantages for non-residents. Ltd companies are ideal for trading or investment activities, providing limited liability protection, greater credibility with clients and investors, and access to the full UK corporate framework. Choosing the right structure depends on the business model, tax considerations, and long-term growth plans.
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.
UK Tax Obligations for Offshore Companies
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.
Income and Capital Gains Tax
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.
| 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).
Value Added Tax (VAT)
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.
How Osome Helps With Offshore Company Formation and Compliance
Setting up and running an offshore company in the UK requires careful attention to legal, financial, and administrative requirements. Osome simplifies the entire process, from company formation and registration with Companies House to ongoing compliance and accounting support.
Services include providing nominee directors and company secretaries, managing bookkeeping and tax filings, and ensuring all statutory obligations are met on time. With Osome’s expertise, businesses can focus on growth and operations while staying fully compliant and well-organised in the UK.
Summary
Setting up an offshore company in the UK provides a credible legal structure, limited liability protection, and access to international business opportunities. Choosing the right structure, whether a Limited Liability Company (Ltd) or a Limited Liability Partnership (LLP), affects taxation, reporting obligations, and operational flexibility. Compliance with Companies House registration, annual filings, and HMRC requirements is essential for maintaining good standing. Partnering with experts like Osome simplifies company formation, ensures ongoing compliance, and allows business owners to focus on growth and strategic operations.
Syahirah Aiman Abbas is a writer and translator with a passion for languages. She speaks Malay, English, Arabic, Indonesian, and French, and is learning Turkish. Syahirah applies her multilingual abilities and creativity to produce engaging and diverse content for UK readers.
