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Doug Nebeker ("Doug")
Can I ask the UK regulars on the forum, how much does it cost to start a company in the UK? How long does it take? What are the formal requirements (eg number of directors)?
After the initial formation, how much does it cost to keep a company running each year in fees? What formalities are required each year, like company meetings, reports and accounting/taxation?
I am currently living in Mexico but the taxation here is roughly twice that of the UK, the red tape is crushing, and government employees make life difficult in order to extract bribes from you. By birth I have a British passport and would love to know if the UK is a better option for my next desktop software product.
Thanks for your help!
I can't recall exactly but it very cheap (a relative term I know).
It only took a couple of days before I had the company registration paperwork in my hand with which I could then open a company bank account. I was pleasantly surprised at the turn-around given I registered my company over a Christmas period.
As for formalities, you are required to complete an annual confirmation of company details (shareholders, addresses, directors etc.) That costs around £13 (online). You'll also want to add accountancy fees for filing tax returns on top of that. Annual "Company meetings" occur more on paper than they do in person.
Companies House manages company registrations in the UK:
I've also enquired into forming an overseas company and found that HMRC (tax dept.) looks past this (somewhat) for taxation purposes.
That is, even if you register a company in another country (with a lower tax regime), if the mind and control of the company (i.e. directors) reside in the UK, then you'll still fall within the UK tax net if you repatriate money.
So even if you intend to stay a Mexican resident, you'll want to find out how that residential status impacts your tax affairs.
All the best -
It is pretty simple and cheap to set up a limited company in the UK. IIRC I paid my accountant £200 to do it 10 years ago. You can pay less.
Running costs as also fairly low. Mostly just what you pay your accountant. Also you are supposed to have employer liability insurance (even if you are the only employee!).
In terms of admin:
-annual company return (saying who the shareholders are etc), takes about 10 minutes, small fee
-annual tax return, the big one, we have to prepare the books then the accountant does the return
-VAT, filed quarterly
-VAT moss (new), filed quarterly
-EC sales list (sales to businesses in other EU countries), filed monthly
-you need to write minutes each time you pay a dividend (takes 2 minutes using a template)
-national insurance, accountant takes care of this
-other stuff I have probably forgotten
Its not as bad as it sounds though.
There may be extra complications if you are running the business from outside the UK.
>government employees make life difficult in order to extract bribes from you.
That sounds horrible. Thankfully I have never had to deal with that in the UK. In fact most admin is online/automated, so I very rarely even have to interact with government officials.
It costs £15 and is done instantly in most cases. You need one person to be Director and a mailing address in the UK, for official documents, etc to be recieved.
A single owner-employee company may be exempt from Employer's Liability Insurance:
"companies employing only their owner where that employee also owns 50% or more of the issued share capital in the company."
I know it's off-topic but I'm curious: what type of tax is 2x in Mexico compared to UK? I would naively expect UK to be way higher. Wikipedia suggests that corporate tax is a little lower in Mexico, but not 1/2. Maybe you are talking about local taxes, property tax etc?
Thank you all so much for your replies. I really love this forum because there are people here with alot of experience, it is a valuable resource for bootstrappers and I hope it doesnt close.
Rather than posting off-topic to answer GregT, I will make a separate post in the future about starting up in Mexico as I have a great deal of hard won experience like which payment processor will deposit into latin american bank accounts and who is the main domain name registrar in Mexico. This may be of general interest because there are alot of "digital nomads" that hang out in Mexico, especially on the Pacific Coast. Information in English is generally scarce or wrong so it could be a good resource.
So once again thank you Marcus, Andy, Scorpio and DV for your time, I will be visiting the UK later in the year for family reasons and will visit an accountant while I am there.
Kinda off topic, but still on track. As far as I could understand, Estonia is opening the ports for entrepreneurs (and others) from all of the world:
Just saw that as an advertisement on Facebook the other day. You apply for e-residence, you have to go travel there once, to apply (which they say in the future could be done in a local embassy in your country) and then can register a company online and access all government services.
I am really not sure how this could at all work with the local regulations, but it is something new for me.
You cannot use the e-residence to legally stay in the country.
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