A branch can be thought of as an extension of the parent company’s operations. The branch is dependant on the parent company. As with any business structure, there are both advantages and disadvantages.
- You can convert a branch into a limited company if required at a later stage
- An unsuccessful branch may be closed without formal notice
- Your company remains liable for all of the branch’s operations
- The branch’s activities will be subject to UK Corporation Tax (currently 20%)
- Unfortunately, most UK companies are less than enthusiastic about entering into contracts with companies that are based overseas, as they may be subject to foreign law
An important note on tax
Tax law varies from country to country. It is vital that a company takes local advice on its home country’s tax position with regard to foreign business and the above issues. At the same time, you must fully understand your company’s UK tax position.
Find out more about setting up a UK branch or a UK subsidiary, get in touch with one of our expert consultants.