International Incorporation

Incorporate Your Business In The United Kingdom

For a sole trader, it can be a big step to take to go from being self-employed to becoming the director of your own Limited Company.

While being a sole trader is still the most popular way to run a business in the UK, there are undeniable advantages of taking your business a step further and operating as a fully- fledged limited company.

What is a Sole trader?

Setting yourself up as a self-employed sole trader is a really simple process. Therefore so many thousands of new sole traders choose this route each year.

Why should I consider forming my own Limited Company?

Going through the company formations process to set up as a Limited Company does involve a little more work than simply registering as self-employed. There are also more financial and statutory administrative duties to perform with operating a limited company, but these extra tasks are well worth the effort to gain the many advantages of Limited Company status.

Let’s take a look at ten good reasons why you should consider forming your own company in the UK today rather than staying registered as self-employed.

1: Tax advantages

As a registered Limited Company you are likely to pay less personal tax than a self-employed sole trader.

Your limited company profits will be subject to corporation tax, which for the current 2018/19 tax year at the time of writing is set at 19%. There is also an aim to get this rate down to 17% for April 2020.

As a director of your own company, you can opt to take a small salary from the business and then take more income in the form of shareholder dividends. By doing this you can effectively reduce the amount of National Insurance Contributions (NICs) you will need to pay.

As limited company dividend payments are taxed separately, they are not subject to NIC payments. This means that you could end up taking home more of your earnings from your business.

2: Your company will be an entity in its own right

A registered limited company will have its own distinct entity that is entirely separate from you. This means that everything held in the company name from its own business bank account to loans, credit agreements and assets is completely separate from those of the company shareholders.

This means that your own personal assets will be protected should the business need to fold for whatever reason (other than when there are criminal activities involved such as fraud).

3: Limited Liability protection

A sole trader has no limited liability protection so they will be held personally responsible for paying back any debts run up in their business name. However, with a limited company, you get ‘limited liability’ protection.

With limited liability protection, any financial losses made by your business will be paid off by the company rather than you personally. This may involve selling off your company assets and recovering security deposits to pay off creditors, but your own personal money or assets will not be touched.

4: Professional image

There is no doubt that forming your own Limited Company will give your business a more professional image. This can help greatly to build customer trust and belief in your products or services.

There are many large companies that will refuse to do business with you as a sole trader but will be happy to work with you if you run a limited company.

5: Better business financing

Funding your business with necessary credit, financing and business loans becomes much easier as a limited company. You will find there are more options open for you to secure business finance and many lenders will grant you more favourable interest rates and repayment terms because of your limited company status.

6: Protected business name

As part of your company formations process, your business name will be registered with Companies House and placed onto the official register of companies.

What this means is that once your name is registered, it becomes protected by UK law and no-one else can use your business name to trade under. Not only that but no-one can trade under a name that is deemed to be too similar to your registered company name, especially if their business is almost identical to yours or operates in the same business sector. This is great because you will know that no-one can undermine your business by pretending to be you to temp away your customers or set up in direct competition with an intent to confuse customers and ride off the back of your hard work and success.

7: Business Costs

There is a common misconception that setting up your own limited company is a very costly process that involves hiring a solicitor and drawing up legal business documentation.

8: Shareholder options

As a sole trader, you can set up your own limited company with just yourself as the director and the company shareholder. Officially you only need to have one single shareholder to form a company, so just because you operate on your own doesn’t mean you cannot form your own company.

Further down the line, you may wish to look at issuing shares to inject some cash into the company. You can issue various classes of shares and each share class will have different rules and responsibilities. You can decide on what voting rights your shareholders have and how much control they have within your company by drawing up your own shareholder agreements.

9: Pension contributions

As a limited company, your business can fund your executive pension and claim it as a legitimate business expense. What this means is that you will be gaining a huge tax advantage that wouldn’t be open to you as a sole trader.

10: Legacy issues

Let’s say that you were to meet with an unfortunate accident that leads to your death or leaves you unable to work. As a sole trader, you can understand how devastating this would be.

Call us on +971506577025 (0506577025 / 0505527930) chat with us on whatsapp or drop in your details by simply mailing us at help@consultkumar.com one of our specialists will be sure to get in touch with you within one hour of you reaching out to us.

FAQs

ConsultKumar advises all its clients to reach out to us with your query as rules and regulations may have changed at the time of you reading this information.

Call us on 050 6577025 / 050 5527930 or email us help@consultkumar.com or you may chat with us on whatsapp. We will be sure to address your queries within 1 hour.

What is the cost of the business setup in a UAE Freezone?
The cost of the business setup varies from each Freezone authority.
The cost also depends on number of owner(s), the need for UAE resident visa for owner(s), the need for employee visa quota and application of labor permit. The kind of business activity you choose. There are several factors that go into total setup cost. We encourage you to reach out to our consultants via online form or direct call or drop in a whatsapp message. You will get an estimate within 1 hour.

Which are the most popular Freezones in the UAE?
Jebel Ali Free Zone (JAFZA), Dubai Airport Free Zone (DAFZA), Dubai Silicon Oasis (DSOA), Ajman Free Zone, Sharjah Media City, Kizad Abu Dhabi, Fujairah Creative City, Ras Al Khaimah Economic Zone & UAQ Free Zone.

How many activities can I perform under the single license in UAE Freezone?
In most Freezones you can have two activities under one license contact our staff, and they will guide for the best options that suit your needs.

Do I need a local agent or a local sponsor for my license in Freezone?
No, as a foreign owner you are 100% owner of your company

What are the different type of activities in UAE Freezone?
There are three types of activities in UAE Freezones known as the commercial, professional and industrial activities.

The activities that require capital like retail, real estate, wholesale, transportation and many others come under the commercial activities. Mining, water, electricity, gas and many other services fall under the industrial activities and social and personal services, health, education and consultants are regarded as the professional activities.

How long will it take to setup a Freezone company?
In the UAE, Freezone company incorporation can be completed within 4 hours to a maximum of 31 days. It all depends on the Freezone wherein you would like to incorporate your company.

What are the types of companies that I can setup in UAE Freezones?
Apart from the kind of business and the requirements, it is important that you be aware of the business companies that you can setup in the Freezone area. Here is the list of the type of companies that you can have in the UAE Freezones.

Private Freezone company owned by individual

Partnership company in a Freezone (more than 1 maximum 4)

Branch of an international company

Branch of the company already operating in Mainland

What type of business setup can you have in UAE Freezones?
In the UAE Freezones, you can start any business that you prefer. There is no need to have a local sponsor and you are 100% owner of your business. However, you can only operate in the geographical available for the Freezone.

Why should I start my business in Dubai or UAE?
UAE is a global business hub. With best connectivity with the world through its world class airport and port facility. Centrally located connecting key markets between Asia Europe and Africa. A stable and progressive government with rules that support ease of doing business, free access to global human resource, excellent banking system of over 40 national and international banks. There is no corporate or income tax, no tax on repatriation of your income of corporate profits.

UAE is a testament to the world how strong leadership, values and progressive thinking can turn around a young country into a dominant economic power.

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ConsultKumar advises all its clients to reach out to us with your query as rules and regulations may have changed at the time of you reading this information.

Call us on 050 6577025 / 050 5527930 or email us help@consultkumar.com or you may chat with us on whatsapp. We will be sure to address your queries within 1 hour.

What is the process of Trade Name Registration in the Mainland?
Consult Kumar will apply for the registration of your Trade Name in the related Department of Economics for the related emirates. The booking will take one day, and it is validated for six months even if you are prepared to start the process of establishing your company.

How many activities can I perform under the single license in the Mainland?
Under the single license, you can manage 10 activities of the same group. However, you must ensure that you engage yourself in the activities that have been labelled in the DED standards.

What are the different services provided by the local agent and local partner?
When you are providing the professional services, you will require the local agent. The Local partner has no interaction with your company or organization, he is only the ambassador of your company who will sign the local agent contract and there is no financial involvement.

On the other hand, the legal partner is required for the commercial activities. He has a share in your organization because he will sign the memorandum and will be responsible for the activities of your organization. Read more

Do I need a local agent or a local sponsor for my license in Mainland?
If you are planning to start a mainland company that you will have to use a UAE national as your local agent or local sponsor. Check our Sponsor services for more information.

Which department will issue the trade license in Mainland Dubai?
The Department of the Economic Development is responsible to issue the trade license of all the three categories. It will depend on the type of your business and the activities that you will be performing. To get the Dubai license for your business you have to ensure that you submit the required and legal documents.

What are the requirements for the trade license in Mainland?
To get the trade license, you have to submit the following information:

Enlist the category of your business
Enlist the type of activities that you will be performing
Enlist all the activities that fall under your business license and you might consider use them
Ensure that there are only 10 activities listed
The nationalities and number of business owners must be included with the legal undertakings
The conditions and requirements that falls under the license must be included
Trade Name of the business should be mentioned
For the initial approval you will have to submit the application to the department
Once you have the approval register your Trade Name immediately
Rent the business premises
The conditional documents to your business must be prepared. It includes certification from authorities, memorandum of association.

How can I renew my business license in Mainland?
If you want the renewal of your commercial license, you will have to submit the DED registered certificate with the approval that you had from the Ministry of Economy and National Media Company. To renew the trade license, you will have to submit the valid EJARI certificate and your lease contracts.

What are the types of licences that I should apply for to setup a business in UAE Mainland?
There are three different types of license that you will need according to your business activities:

A commercial license will be required if you are engaged in the trading business
Professional license if you will be providing the professional services
If you have a manufacturing or industrial business, then you must apply for the industrial license.

Do I need to rent an office in Dubai Mainland to start a business?
No, ConsultKumar can assist you in starting your business without the actual need to take up an office. Our virtual lease offers start from AED7,500.00. This will enable to you start your operations. Should you require Micro office such as Desk space for one, with meeting rooms facility, dedicated call lines and mail management with parking, please do get in touch with one of our business advisors or fill in the online form, call us or drop in a whatsapp text. We will respond to you within 1 hour.

What are the various categories of incorporation in UAE Mainland?
There are different types of business incorporation categories in UAE. They differ by the terms and conditions, the amount of paid up or share capital, number of shareholders required and the incorporation procedure, namely are:

General partnership company
Share partnership company
Limited liability company
Joint venture company
Private shareholding company
Public shareholding company

What happens if my Local Service agent or 51% UAE shareholder passes away?
In such unfortunate circumstance the will created by the deceased will come into effect and who inherits becomes the new nominee shareholder. He/she may or may not operate as the previous nominee shareholder.

With ConsultKumar all our structures are created in a manner that ensures continuous functioning of business without any hurdles during such transition period

Can I change my Local sponsor, are there any exit clause, will ConsultKumar assist in this process?
There is minimum 30day notice period to be provided prior to license expiry date. In the absence of such notice, the agreed fee of nominee shareholder will be applicable. You may change your Local service agent / sponsor at your willingness. We will assist you in this process.

UAE is a testament to the world how strong leadership, values and progressive thinking can turn around a young country into a dominant economic power.

‍

Consult Kumar advises all its clients to reach out to us with your query as rules and regulations may have changed at the time of you reading this information.

Call us on 050 6577025 / 050 5527930 or email us help@consultkumar.com or you may chat with us on whatsapp. We will be sure to address your queries within 1 hour.

What are the limitations of an Offshore Company Setup?
Offshore Company Formation in UAE has few limitations such as – No provision to issue residency visa, no trade within UAE, no leasing or renting a Local Premise in the UAE.

Can an Offshore Company Open a Bank Account in the UAE?
Yes, an Offshore Company can open a Bank Account in the UAE. The company owner will have to visit the UAE to do the paperwork with the bank. The bank will be assessing business activity, company profile, fund flow, etc. UAE has strict Know-your-Customer (KYC) Norms for Offshore Company Bank Accounts.

How much time will it take to Register an Offshore Company in the UAE?
Offshore Company can be incorporated in less than 2 Working Days. Offshore Company registration is relatively easy by applying through an online registration form along with the right documents. In normal circumstances, the company registration will happen even without the physical presence of the company owner.

Can Offshore Company buy Property in Dubai?
Yes, Offshore Company registered in RAKICC and Jebel Ali Free Zone (JAFZA) are eligible to purchase residential property in the Offshore Company’s name from designated freehold areas in Dubai. However, there are certain restrictions in terms of usage and disposal of the property. Offshore Company is not eligible by UAE Legal Laws to purchase any commercial property in the UAE.

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