Option 1: Close your UK company and set up a new one overseas
If you’re planning to move abroad, you cannot simply take your business with you. Once you have incorporated a company in the UK, that’s where it remains registered until you dissolve it.
If you want to move your company’s registration, you can close the UK business and incorporate a new company overseas. That will give you a fresh start in a new market with a different tax and regulatory system, and you won’t have to worry about UK reporting or tax compliance.
If your UK company can pay all its debts (it’s solvent), you can close it via Strike Off or a Members’ Voluntary Liquidation (MVL). Although Strike Off is cheaper initially, an MVL is more tax efficient if you have significant retained profits and physical assets to return to the shareholders.
On the other hand, if the company has debts it cannot pay (it’s insolvent), you can use a Creditors’ Voluntary Liquidation (CVL) to close the business. As long as you have met your duties as a company director, any debts the company cannot pay will be written off. You’ll then be free to incorporate a company in your new country of residence.
Read more: How do I know if my company is solvent or insolvent before closing?
The pros
- Easy access to international markets, potentially including the EU
- The opportunity to benefit from lower corporation and income tax rates
- No UK reporting obligations to meet
The cons
- You’ll lose your UK business, customer base and income
- Corporation and income tax rates, particularly in Europe, are often higher than in the UK
- Bringing an end to your UK obligations can be time-consuming and trigger tax liabilities
Option 2: Keep your UK company and set up an overseas subsidiary
One option that could potentially give you the best of both worlds is to keep trading your UK company and open up an overseas subsidiary. That will enable you to retain your UK customer base and income stream while also gaining access to new markets and new talent.
In this scenario, as the companies are considered part of the same group, you’ll be able to use the same name in both jurisdictions. Some countries also offer favourable tax regimes or incentives for foreign companies that establish subsidiaries, although you will need to consider the tax implications carefully.
The pros
- Maintaining your UK income and customer base
- There’s no requirement to close your UK business
- It can be an effective way to grow and expand your company
The cons
- There are more administrative and reporting requirements to meet
- Managing the UK business while overseas adds complexity
- Tax compliance can be difficult to navigate
Option 3: Continue operating your UK company from abroad
There’s nothing to prevent you from running your UK-registered company from your home overseas. That will enable you to continue operating an established business and benefit from a stable income stream in the new country.
Regardless of where you live, you will have to comply with UK company law, meet your filing obligations and maintain a registered office in the UK. You’ll also need to meet your legal duties as a company director.
Running a UK-based company from overseas can be challenging. Operating in different time zones and maintaining oversight of your staff and operations can be complex. Remote meetings can also be limiting, and you will need a UK-based team you can trust to help manage day-to-day operations.
The pros
- Maintaining an established UK business, income stream and client base
- Not having to close your UK business or set up a new company overseas
- The opportunity to find new customers and suppliers in the country you move to and enhance global trade
The cons
- Running a UK business from overseas can have significant tax implications for your business and personally
- Managing a business remotely is challenging
- Some clients and suppliers may be wary of working with an overseas-managed UK company
Don’t Fall Foul of Unqualified AdviceCan I close my UK company from abroad?
Whatever approach you choose, it is still possible to close a UK company from abroad if you reach a point where you no longer need it. However, to liquidate the company, you will need the help of company closure specialists that operate in the UK.
Your company closure options include:
Strike Off
Strike Off, also known as Company Dissolution, is the cheapest way to close a solvent UK company with no or few assets. You can apply for Strike Off by submitting form DS01 to Companies House and paying a nominal application fee.
Before applying, you must make employees redundant, pay any creditors, transfer any assets, submit final accounts to HMRC, deregister from VAT and close the company’s bank accounts. A company closure specialist can help you close down your operations, prepare and file the DS01 form and ensure legal compliance.
Members’ Voluntary Liquidation (MVL)
If your UK business is solvent and has significant retained profits or valuable assets, Members’ Voluntary Liquidation is likely to be the most tax-efficient way to close it.
In this case, you must appoint a licensed Insolvency Practitioner to administer the liquidation on your behalf. They will sell the business’s assets, pay any debts and distribute the remaining profits among the shareholders. All shareholder distributions are taxed as capital rather than income, and you may be eligible for Business Asset Disposal Relief to reduce the rate of Capital Gains Tax you pay.
Creditors’ Voluntary Liquidation (CVL)
If your UK company is struggling financially and can no longer pay its debts when they’re due, your best option will usually be to liquidate it so you can start afresh with a new business overseas.
A Creditors’ Voluntary Liquidation allows you to close an insolvent business in a legally responsible way that prioritises the needs of the creditors and reduces the risk of penalties. You must appoint an Insolvency Practitioner who will sell the company’s assets and repay the creditors in a strict order. Any debts they cannot repay in full will usually be written off.
Need advice?
If you want to close your UK company either before or after moving overseas, you must seek advice from an Insolvency Practitioner who is licensed to take appointments in the UK.
At Company Closure, we can discuss your circumstances, outline your options and guide you through the most appropriate closure process from start to finish. We can conduct all conversations and meetings virtually and send documents electronically, enabling you to close your business without setting foot in the UK. Get in touch today for a free consultation.
Need to speak to someone?
With multiple offices across the UK and a vastly experienced team of business closure experts, you are never far away from the advice you need. Our Licensed insolvency practitioners provide free consultations to all directors and shareholders, and can quickly ascertain which closure method is best for your business.
We are licensed by recognised professional bodies and have helped thousands of directors over many years. Contact us today for your free company closure consultation.
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