Companies may own one or more other companies which are its subsidiaries. The relationship between parent and subsidiary depends on majority control of the voting rights of shares or the ability to control the board of directors. A UK holding company is a company established for the sole or majority purpose of holding shares in the Groups subsidiary companies incorporated in countries in which the Group is engaged in business activities. The holding company will receive the dividends paid by those subsidiaries and use them to declare a dividend to the ultimate parent. GR MORGAN FORMATIONS can assist you in forming your UK holding Companies. Below is our comprehensive package:
Some European jurisdictions provide very good tax incentive for incorporating in their country. The United Kingdom is a commonly used jurisdiction for the incorporation of a holding company. Some of the features which make it attractive are:
Conditions for Incorporation of a Holding Company in the UK
In any country in which a holding company can be incorporated, there are various conditions which must be met, some of the main requirements are:
It must be noted that according to legislation:
Legal Form: A UK holding company can be incorporated either as a private limited company (Ltd) or a public limited company (Plc).
Share Capital: The minimum share capital for incorporation of a UK company is 50.000 for a public limited company(PLC) of which at least 25% must be paid up, but no minimum is applied to a private limited company.(Limited Company)
Taxation: A UK company is fully subject to tax at the corresponding corporation tax rate. No capital duty is levied when capital is contributed at the formation of a resident company and on any increase in its capital. Corporation tax is charged on worldwide profits of companies resident in the UK and is calculated based on financial statements prepared according to generally accepted accounting principles. Expenses incurred by the company must be only for the purposes of the trade.
Foregin Dividend Exemption: Dividend received from a country with a tax treaty ,containing a non discriminatory clause ,with the UK will be exempted from Uk corporation tax.
Share Disposal in Subsidiaries: A Uk Holding will allow exemption to capital gains if the following conditions are met:
Selling shares of the UK Holding
There is no withholding tax on the distribution of dividend from a Uk holding.
The tax laws in the U.K. make the country an attractive location for holding companies.
If you are a non uk resident and you wish to use the UK as a base for trading internationally , then you can use a Uk agency company in order to give your international trading a more prestigious image and give your clients more confidence to do business with you.
For further information please do not hesitate to contact us.