Establishing a UK subsidiary involves more than simply registering a company. Incorporation at Companies House usually takes three to five working days, provided all required information is available. A UK registered office address must be maintained, and statutory company registers must be kept up to date. 

A company incorporated in the UK is generally treated as UK tax resident and liable for UK corporation tax on its worldwide profits, unless relief is available under a double tax treaty. Where management and control are exercised outside the UK, questions of dual residency often arise, so the residency position should be considered carefully at the outset.  

Businesses trading in the UK must also consider indirect taxes. VAT registration is mandatory once UK turnover exceeds £90,000, although voluntary registration is possible earlier. HMRC processing usually takes three to six weeks. Where staff are employed, the company must register as an employer with HMRC, which normally takes one to two weeks. Employers must operate PAYE, deduct income tax and National Insurance, and comply with pension auto-enrolment obligations. Companies in the construction sector must additionally register under the Construction Industry Scheme, which usually takes one to two weeks, and thereafter file monthly CIS returns. 

Where overseas staff are required in the UK, the company must hold a sponsor licence issued by the Home Office. Applications typically take eight to twelve weeks, although an expedited process is possible, and require adequate HR and record-keeping systems. Once the licence is granted, Certificates of Sponsorship can usually be issued within a few days to enable individual Skilled Worker visa applications. All UK employees must also receive a written statement of terms, usually in the form of an employment contract, on or before their first working day. 

The relationship between the UK subsidiary and its parent company should be properly documented. Intercompany agreements covering services, financing, or intellectual property help demonstrate compliance with UK transfer pricing rules and HMRC expectations. One of the more challenging practical steps is opening a UK corporate bank account. Banks typically require in-person identification of directors or shareholders, and applications can take six to twelve weeks or longer. In some cases, fintech providers can be used on an interim basis while the main account is established.