Tips and Requirements for Setting up a Company in the UK, Europe, and USA

With COVID restrictions in the rear-view mirror, many business-minded folks are looking to switch to entrepreneurship by establishing subsidiaries, branches, or independent companies. Countries such as the United States, the UK, and Europe enjoy a thriving business landscape that is a major attraction for new and seasoned entrepreneurs.

So, how do you start a subsidiary, branch, or stand-alone company in the UK, US, or Europe? Let’s find out.

Branch vs Subsidiaries

It’s crucial to understand the distinction between a branch and a subsidiary, whether you’re considering starting a new business or growing an existing one. Although the main firm owns both branches and subsidiaries, they differ significantly. A subsidiary business is a separate legal person. A branch is an addition to an established business. 

A firm owned or managed by a parent or holding corporation is referred to as a subsidiary. The parent firm often owns a majority of the subsidiary company. As a result, the parent company gains control over the Subsidiary. A subsidiary provides the parent company with more liability protection: 

A subsidiary provides the parent company with more liability protection: The legal identity of a subsidiary is distinct from that of the parent business, giving the parent firm’s owners more legal security. Before we move any further, the following is a quick breakdown of the major differences between a subsidiary and a branch.

Setting Up Subsidiaries, Branches or Stand-Alone Companies in the UK

 “The UK is open for business.” We’ve all seen the slogan. The UK is one of the most business-friendly countries in the world, and many foreign corporations have thought about entering the UK market. 

Setting Up a Subsidiary in the UK

The private limited company is the most common type of business structure for a UK subsidiary (LTD). There must be at least one listed director for a UK subsidiary. It entails applying to Companies House and going through the UK business registration procedure.

Your Standard Industrial Classification of Economic Activities has to be checked (SIC). Additionally, you will require the registered office address, share capital, and director information for your firm.

Additionally, a PSC registry with information on the Persons of Significant Control will need to be prepared. Along with the memorandum of association and certificate of incorporation, the articles of association are the most crucial documents you will need.

You must also register for Pay As You Earn (PAYE) and VAT. Additionally, you will require employer’s liability insurance with a minimum limit of 5,000,000 GBP. Only the Subsidiary’s own financial statements, not the parent company’s, must be filed with Companies House.

Setting up a Branch in the UK

You must complete government form OS IN01 (available from the Companies House) and submit it to Companies House within one month of your company’s official opening to register a UK branch. Currently, the registration cost is £20. 

The constitutional documents of your present firm, which must be validated and translated into English, are one of the many documents needed for registration. After registering, you must follow specific instructions from Companies House, which will likely require regular delivery of accounting records.

Setting up a Stand-Alone Business in the UK

You’ll need a few important documents to start a business if you’re considering doing so in the United Kingdom. These comprise a memoranda and purposes clause, company strategy, and articles of incorporation. Most firms register as a partnership, limited company, or single proprietor.

You can be required to pay business rates if you rent or purchase a property. Some small firms may not pay any business rates if they request a reduction. Once you’ve established your company, it’s critical to safeguard it in case something goes wrong.

Unless you have no workers, it is a legal necessity for all firms to obtain employer’s liability insurance. Special licenses, permits, and insurance are also required depending on the type of company you wish to start in the UK. 

Read more about starting a business in the UK 

Setting Up Subsidiaries, Branches, or Stand-Alone Companies in Europe

As a company doing business in Europe, you may take advantage of the EU Single Market and specific trade agreements with other European nations. This implies that there are no additional fees or quantitative limitations on the free movement of your goods within EU countries.

An entrepreneur can choose which of the several company kinds in the EU is best for them. When deciding whether to create a subsidiary or branch office in the EU, a foreign firm must consider the member states’ tax laws, the establishment’s goals, and the costs associated with doing business there.

Setting Up a Subsidiary in Europe

The Subsidiary gives a little more freedom in that it can transfer shares to other parties as part of a joint venture or restructuring. Subsidiaries are legally distinct from their overseas parent business, whereas offices, agencies, and branches do not have a legal personality. 

This makes doing business simpler because the Subsidiary is a separate legal company. However, in order to open a subsidiary in Europe, your head office and registered office both need to be in an EU member state.

Setting up a Branch in Europe

A branch office is a less significant division of the parent corporation. An overseas branch is viewed as a continuation of the parent company. Regarding VAT returns and other things, the branch office has the same responsibilities as the main firm.

You must register with the tax and VAT authorities, the social security office, and the businesses register and publish information on the parent company’s operations before you may operate a branch office in the EU.

There will be documents like the offshore parent company’s charter, the disclosure of the commercial activities of the parent firm, Personal information about the beneficiary, such as proof of residence, and identification or other papers attesting to each co-founder.

You will also need to create a bank account and register a new legal organisation in the host nation. Since Great Britain, one of the more well-known nations, departed the European Union in February 2020, 27 territories and countries are on the list of EU members.

For the traditional island territories, where relatively few banks now do business, Serbia stands out as a jurisdiction where you may open an offshore company’s representative office when you get a local bank account.

Setting up a Stand-Alone Business in Europe

The European Corporation, sometimes referred to as SE (Societas Europea), is a form of public limited liability firm that enables you to manage your company’s operations across many European nations under a single set of regulations. 

A minimum of EUR 120 000 in subscribed capital is required. You must be present in other EU nations (via subsidiaries or branches), or all businesses engaged must be subject to the legal systems of at least two distinct EU nations.

In principle, all EU nations must abide by the same EU regulations regarding European Companies. However, there could be different laws depending on the nation in which your European Company is registered.

So, what if you don’t already have a presence in any EU country? Many EU business consulting firms will register a corporation in the EU with their own business address for you. The paperwork will be handled, bank accounts will be set up, and office space will be available as needed. To finish the paperwork, you often need to travel there at least once.

Read more about benefits of starting a business in Europe

Setting Up Subsidiaries, Branches, or Stand-Alone Companies in the USA

The United States of America has 50 states, giving your business access to over 329 million potential consumers. Nuff said!

Setting Up a Subsidiary in the USA

The establishment of a US branch is not subject to any formal registration requirements. Before starting a business in the US, one must apply for an employer identification number (EIN) with the Internal Revenue Service (IRS). 

A corporation must obtain the directors’ permission for larger companies. As a result, a corporation must convene a board meeting and give advance notice to all the directors. To start a branch office, the board of directors must approve a resolution. A director also needs BOD approval to engage in all connected actions. The timeframe for the incorporation is three months, and you will have to pay a corporate tax rate of 21%. 

Setting up a Branch in the USA

Banks, financial operations, and insurance are just some industries that are looking to open branches in multiple cities and states. You are going to need to submit documents filed by the parent company. 

These documents will include a business plan, Articles of Association, and other specific paperwork depending on the industry you wish to operate in. You will also need to provide the name of the owner, the board of managers, and the address of your business. You will also need an Employer Identification Number (EIN) to prove that your company is registered for taxation. 

A limited liability company is a preferred choice for opening a branch in the US. The company’s documentation and all other forms are then solicited by the financial authorities of the state you wish to open the branch in. 

Setting up a Stand-Alone Business in the USA

Building a business from the ground up can be intimidating, but getting the right advice can help avoid major mistakes. You will first need to establish the type of company you want, such as a C Corporation or an S Corporation. 

You can start by filing the incorporation documents with the state filing office. Register the company and obtain your federal Employer Identification Number. It should also be noted that US Federal Law prohibits certain nationals from owning assets or companies in the US, such as Iranians or Cubans.

Generally speaking, foreign ownership of a U.S.-based corporation is not constrained. Forming a corporation in the US is the same for foreign nationals as for US residents. To own a business or LLC, you don’t need to be a US citizen or have a green card. For more in-depth information on how you can start a company, branch, or Subsidiary in the US, Europe, or the UK, visit Start Company Formations.