In this article, let us understand the essence of director and whether a UK company needs a UK director?

Can a UK Company Have a Non-resident Director?

Absolutely. As a non-resident director of a UK-based company, any income arising from such a position should be taxable in the UK and subject to UK wage tax withholding.

Is It Possible for Non-residents to Serve as Company Directors?

The incorporation of a company with only one non-citizen director is not possible. Unless they hold a non-resident director title on the board, non-citizens must ensure that at least one other resident director has the same title.

Non-UK Residents Are Allowed to Be Shareholders

Suppose a company is not incorporated in the United Kingdom. In that case, it is formed in the same way as an organisation based in the UK. Foreigners who are directors, shareholders, or directors are not subject to UK corporate law. You are not required to live in the United Kingdom either.

Can a Foreigner Own a UK Company?

 Certainly, business is open to anyone, regardless of nationality. It is sufficient if you do not have residency status and live anywhere in the country.

Who Can and Can’t Be a Director?

Anyone can be a director if they are at least 16 years old and have not been disqualified (by a court order or by their company’s own memorandum and articles). It does not matter where the director-to-be lives (or where they were born). 

Setting up a Company in the UK

The process of setting up a company is relatively straightforward, and there are a number of resources available to help you through the process. This blog post will outline the steps you need to take to set up a company in the UK.

1. Choose your business structure: There are a few different options for business structures in the UK. You can choose to set up as a sole trader, partnership, or limited company. Each option has different implications for taxation, liability, and administrative requirements. Consider your business needs and choose the most sensible structure for you.

2. Register with companies house: Once you have chosen your business structure, you will need to register with companies house. This is the government body responsible for keeping records of all companies in the UK. You will need to provide basic information about your company, including its name, registered address, and contact details.

3. Appoint directors: If you are setting up a limited company, you will need to appoint at least one director. Directors are responsible for running the company and ensuring it complies with UK law. You will need to provide basic information about your directors, including their names and addresses.

How to Appoint a Company Director

As part of the company formation process, the appointment of directors will be included if your company has not yet been incorporated. You can form your company through the company’s house or through Vakilsearch. Get in touch with Vakilsearch for any queries related to the same.

• We offer a company formation package for non-residents.

However, suppose the company is already up and running. In that case, you can appoint the director using the AP01 appointment of director paper form, or you can use the company’s house web filing to make the appointment online.

Business Bank Accounts

Trading with UK-based companies does not require them to have a UK bank account. But for smooth company registration in UK and transactions with British clients and customers – and easier access to finance – a UK bank account is highly recommended. If you use a non-UK bank account to trade in the UK, you will generally have to pay various transaction fees and conversion costs.

A registered office address is usually not enough for overseas directors to open a UK bank account. To open a UK business bank account at least one of the directors must be located in the UK, but each bank may have its own policies, so be sure to check.

The Director Addresses

You must provide companies house with two addresses when appointing a director:

• The correspondence address (also known as the director’s service address)
• Specifically for the director, this is the address where government mail will be sent
• This does not need to be in the UK, unlike the registered office.

While a service address can be a residential address, it is not ideal. It is placed on the public register, opening it to uninvited visitors and unsolicited mail. You can avoid this by using an alternative address that you have permission to use as the service address.

Director Home Address 

(Also known as the usual residential address)

It must be the actual residence of the director who is being appointed. It will not be placed on the public register unless it also serves as the registered office and/or the service address.

What Is Other Information Needed to Appoint a Company Director?

You also need to provide the following information in addition to the addresses mentioned above:

• Please include both your title and full name
• Nationality
• Date of birth
• Occupation

Once the appointment has been confirmed, the information will be posted on the public register.

Tax

Even if they only visit the UK for a short period of time, directors of non-UK based companies may still have to pay income tax in the UK. It may be in addition to the income tax in their country of residence, depending on the double taxation rules. A tax accountant can provide expert advice and guidance on managing your tax affairs.

Frequently Asked Questions

Can a UK company have a non-resident director?

Yes, A non-resident director of a UK company holds an office, and any income received for this role in the UK should be regarded as earnings and subject to UK wage tax withholding (PAYE).

Can I set up a UK company as a non-resident?

Yes, you can connect with our experts for more information on the same.

How do you appoint a director in a private limited company in the UK?

Following the company's formation, the appointment of directors must adhere to a formal procedure. This entails directors signing a letter of consent to confirm their willingness to serve and obtaining majority approval from members via an ordinary resolution for appointing a new director.

Who can be a director of a company in the UK?

A director must be at least 16 years old and eligible to serve as a director. While directors are not required to reside in the UK, companies must maintain a UK registered office address. Information about directors, including their names and personal details, is accessible to the public via Companies House.

What is the requirement for a resident director in the UK?

Any individual aged 16 or above, who hasn't been disqualified by a court order or their company's regulations, can serve as a director, regardless of their residency or birthplace.

What is the penalty for not having a resident director?

In many countries, the penalty for not having a resident director can vary but typically includes fines, legal actions, or the inability to conduct business activities. This requirement is often enforced to ensure companies maintain a local presence and adhere to governance standards, failure to comply may lead to business disruption or dissolution.