The United Kingdom is the world’s sixth-largest and Europe’s second-largest economy. The UK is a leading exporter of financial services, with London as a major global financial center. The nation has a business culture that values professionalism, discipline, courtesy, and punctuality. Key growth sectors include financial services, digital technology, creative industries, and professional services focusing on innovation and productivity growth.
Unlock growth opportunities in the UK with Cerity Global as your trusted partner. We offer end-to-end support for establishing your legal entity, navigating the United Kingdom’s often complex regulatory landscape with clarity and efficiency.
From company registration to ongoing back-office support, including HR, payroll, benefits, accounting, tax and compliance, Cerity Global simplifies the process so you can focus on growing your business.
Need to hire quickly before your entity is set up? We offer interim EOR services in the UK, enabling you to onboard talent fast. Once your entity is established, we ensure a smooth transition of your employees from the EOR Structure to your own legal entity, without disrupting payroll or compliance.
Our experts stay ahead of regulatory changes to keep your operations aligned with the UK’s employment and tax laws, helping you scale confidently and compliantly.
The most popular form of entity setup for foreign investors. It offers limited liability protection for the shareholders. A private limited company is a separate legal entity from its owners and is managed by one director and owned by shareholders.
A public limited company is well suited for larger organizations seeking public investment. It requires at least two directors, a qualified company secretary, and at least one shareholder. It is similar to a private limited company, but it can offer its shares to the public for capital raising opportunities and wider ownership.
A branch office is an extension of a foreign company and is not considered a separate legal entity. It allows a foreign company to conduct its business. The parent company holds full liability, and accounts are filed annually.
There is currently no requirement for the directors of UK companies to verify their identities or their addresses, before setting up a company. There is also no requirement to have a UK based director, though having at least one UK resident director can simplify banking and operational requirements.
Similar to private limited companies, there is no mandatory requirement for UK resident directors, though practical considerations may make it advisable.
A branch office must appoint at least one authorized representative who can be contacted in the UK regarding the branch’s activities.
Bank account setup in the UK follows a specific process that must be coordinated with entity incorporation:
Bank Account Setup in the UK: What’s Possible and When
Before Incorporation:
After Incorporation:
Note:
The UK banks have rigorous compliance requirements and may require video calls or in-person meetings for account opening. The process typically takes 2-4 weeks once all documentation is provided.
Required documents include the certificate of incorporation, memorandum and articles of association, directors’ identification and proof of address, proof of business address, business plan or trading history.
Cerity Global supports companies in their global expansion plans and helps in legal entity setup, registration and ongoing support services. With us, you can quickly set up a legal entity, operate compliantly, and expand globally. The process typically takes a few days to a week, depending on the bank.
Employment in the UK is primarily governed by the following laws:
In the UK, employment contracts don’t need to be written, however, employers should enter into written agreements to provide clear details.
Some of the details typically mentioned in the written contract include:
The different types of employment relationships are:
Permanent Employment
Also known as indefinite employment, these contracts have no set end date and provide job security and full employment rights, Permanent employees are entitled to statutory benefits and protections under UK employment law.
Fixed-Term Contract
Fixed-term contracts last for a specific duration that are set in advance. These contracts come to an end when the specific task is completed, usually used for temporary projects, seasonal work.
Agency Worker
Employers can hire agency workers, also called temporary staff, via staffing agencies. The agencies must ensure that the workers get their rights under working time regulations. Businesses who go through agencies must provide them with all relevant information regarding terms and conditions of their business. After 12 weeks of continuous employment in the same job, the temporary staff get the same benefits as permanent employees.
Freelancer/Contractor
A freelancer/contractor are self-employed or sometimes even part of other companies and are not entitled to the same rights as workers, such as minimum wage.
In the UK, a probationary period typically lasts up to six months.
The regular working hours in the UK are eight hours a day, and the maximum average is 40 hours a week.
The UK has maintained its opt-out policy on working time, but employees may opt back in again at any time.
Overtime
Overtime in the UK must be mentioned in the employment agreement.
Even if mentioned in the agreement, by law, an employee cannot be forced to work more than 48 hours per week. One can agree to work beyond the permissible hours, but this agreement must be in writing and signed.
The notice period in the UK usually depends on the length of service:
Statutory redundancy pay is available for employees with 2+ years of service:
Maximum weekly pay for calculations is capped at £719 (2025 rate) and the maximum statutory redundancy pay is £21,570.
Foreign nationals can work in the UK through various visa routes following the points-based immigration system introduced post-Brexit.
Work Visa & Permit Options in UK
1. Skilled Worker Visa
The main route for skilled workers from outside the UK.
2. Global Talent Visa
For individuals recognized as leaders or potential leaders in academia, research, arts, culture, or digital technology.
3. Intra-Company Transfer Visa
For employees of multinational companies being transferred to a UK branch.
4. Scale-up Visa
For workers joining fast-growing UK companies.
5. Temporary Work Visas
Various temporary routes including:
Key Notes:
The UK points-based immigration system offers multiple routes for skilled workers, scale-ups, and global talent, with many leading to long-term residence.
Employees in the UK are legally entitled to 5.6 weeks (28 days) of paid vacation per year, which includes public/bank holidays.
Female employees are entitled to 52 weeks of maternity leave:
In the UK, fathers are eligible for one or two consecutive weeks of paid paternity leave after the birth of their child.
Employees in the UK have the right to work off due to illness; however, if they are ill for more than seven days, they need to produce a medical certificate.
The following statutory national holidays are observed in the UK:
Also known as bank holidays, England and Wales recognize eight public holidays:
Scotland recognizes nine bank holidays:
Northern Ireland recognizes ten bank holidays:
The most common length of the pay period is monthly. Payments are usually made by the 25th of each month or on the last working day.
Employers must automatically enroll eligible employees into a workplace pension scheme:
The UK operates a PAYE system where income tax and National Insurance contributions are deducted from employees’ wages:
The UK’s labor law does not mandate any bonus or 13th-month bonus, however they are at the discretion of the employers. If a bonus is mentioned in the employment agreement, the employer must provide it. The 13th-month bonus is usually in December during Christmas.
The following are the various types of social security in the UK:
The mandatory benefits in UK include:
Accounting standards must adhere to the UK GAAP (Generally Accepted Accounting Practice) and the International Financial Reporting Standards (IFRS).
All UK companies must prepare and file statutory financial statements with Companies House and submit a tax return to HMRC.
All UK companies must prepare statutory accounts and submit them to Companies House and HMRC by their respective deadlines; 9 and 12 months after year-end.
A statutory audit is required if a UK company exceeds two of the following three thresholds for two consecutive financial years:
Audit is also mandatory for public companies (PLCs), subsidiaries of listed companies (unless exempted), financial institutions and insurance companies, companies regulated by the FCA or PRA, charities exceeding specific income and asset limits
Audits must be performed by auditors registered with a recognized supervisory body such as ICAEW or ACCA.
The UK corporation tax system has different rates:
The VAT rate in the UK is 20%.
However, there’s a reduced rate of 5% on certain goods (e.g., domestic fuel), and 0% on certain goods (e.g., most food, books)
Typically, the tax returns must be filed 12 months after the end of the accounting period.
VAT returns: Quarterly (monthly for large businesses)
PAYE: Monthly or quarterly, depending on the scheme
In the event of late filing, interest at 7.75% per annum is levied from the date of non-payment.
The UK follows OECD Transfer Pricing Guidelines:
UK has implemented CbC reporting requirements:
Transfer pricing documentation requirements:
Master File
Local File
Deadline: Master and Local Files must be prepared by the Company Tax Return deadline (12 months after accounting period end) and submitted only upon HMRC’s request.
UK General Data Protection Act (UK GDPR) is the UK’s implementation of the European Union’s General Data Protection Regulation (EU GDPR), which ensures individuals’ privacy and data protection rights.
The UK’s AML framework is governed by the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017:
Obligated entities: Financial services, legal services, accountancy, estate agency, high value dealing, and cryptoasset business.
Key requirements:
Penalties: Unlimited fines and imprisonment up to 14 years for serious breaches.
People with Significant Control (PSC): Companies must maintain a register of individuals with significant control.
Reasons you should setup legal entity in the UK:
Cerity Global ensures your business expansion in the UK is fast, compliant, and future-ready, so you can focus on growth while we manage the back-office tasks.
Economic figures are subject to change based on quarterly reports and market conditions.
Cerity Global combines deep local knowledge with proven expertise to make your UK business establishment effortless and compliant. Whether you’re looking for legal entity setup and registration or ongoing support, we’re your trusted partner for sustainable global expansion in the UK.
Disclaimer – The information provided is for informational purposes only and does not constitute legal, business, or tax advice. Entity setup requirements, tax rates, and economic data are subject to change and may vary by location.
To discuss your needs and how we can help you achieve a compliant and efficient expansion.