UK Subsidiary vs Branch: How Overseas Companies Enter the UK Market

An overseas company does not automatically need a UK subsidiary simply because it has UK customers.

Depending on what the business intends to do in Britain, it may be able to:

trade directly into the UK from abroad;

register a UK establishment, commonly referred to as a branch;

or

create a separate UK limited company owned by the overseas parent.

The right structure depends on what the UK operation will actually do.

Will it employ people? Sign local contracts? Hold stock? Import goods? Operate premises? Apply for UK banking? Supply government or corporate buyers? Build a long-term UK business?

Those questions can affect liability, Companies House filings, tax, VAT, payroll, banking, governance and future investment.

For an established overseas business, the first question should therefore not be:

“How quickly can we incorporate a UK company?”

It should be:

“What UK operating structure does the business actually need?”

This guide explains the main options and the practical issues an overseas company should consider before establishing a UK operation.

If you are an individual founder rather than an existing overseas company, start instead with our UK Company Formation for Non-Residents guide⁠.

Quick Answer: Does an Overseas Company Need a UK Subsidiary?

Not necessarily.

A foreign company may be able to sell to UK customers directly without creating a UK company.

A UK establishment or branch may be relevant where the overseas company establishes a physical UK place of business but wants the UK activity to remain legally part of the foreign parent.

A UK subsidiary may be more appropriate where the parent wants a separate UK legal entity for local contracts, employees, distribution, banking, investment or long-term operations.

UK government market-entry guidance distinguishes a branch from a subsidiary principally because a branch remains part of the overseas company, whereas a subsidiary is a separate legal entity.

Important: Companies House registration, UK tax residence, permanent establishment, VAT, employment and regulatory obligations are separate questions. The answer under one regime does not automatically determine the others.

Seven Oak Prestige — UK Market Entry Decision Framework

Option 1: Direct Cross-Border Trading

Usually considered when:
The overseas company wants to sell goods or services to UK customers without establishing a permanent UK operating base.

Separate UK legal entity:
No.

UK subsidiary required:
Not automatically.

Companies House registration:
An overseas company does not automatically have to register simply because it conducts business with UK customers. Companies House states that registration of a UK establishment generally becomes relevant where the overseas company has a degree of physical presence in the UK, such as a place of business or branch.

Important:
No Companies House registration does not automatically mean there are no UK tax, VAT, employment or regulatory obligations.

Option 2: UK Establishment or Branch

Usually considered when:
The foreign business establishes a UK place of business but wants that operation to remain part of the overseas parent company.

Separate UK legal entity:
No.

Liability:
The parent company remains responsible for the branch’s debts and obligations.

Companies House registration:
Required where the overseas company establishes a qualifying UK presence.

Current Companies House registration fee:
£124.

Parent-company disclosure:
Corporate documents and, depending on the parent’s home-country accounting requirements, accounts can need to be filed with Companies House.

Option 3: UK Subsidiary

Usually considered when:
The overseas company wants to create a distinct UK operating company.

Separate UK legal entity:
Yes.

Ownership:
The foreign parent may own the UK subsidiary.

Liability:
The parent and subsidiary generally have separate liabilities because they are separate legal entities. However, that separation is not absolute and can be affected by guarantees, contractual commitments, group conduct and other legal circumstances.

Current online Companies House incorporation fee:
£100.

Typical incorporation time:
Companies House currently states that an online company is usually registered within 24 hours.

1. When Does a UK Subsidiary Make Sense?

A subsidiary becomes particularly relevant where an overseas business is moving from occasional UK sales to a genuine UK operating platform.

Examples include plans to:

• employ people in the UK;
• sign significant UK customer contracts;
• establish local distribution;
• hold stock or operate warehousing;
• work with UK suppliers;
• participate in procurement or tender opportunities;
• create a distinct UK brand or operation;
• obtain investment specifically for the UK business;
• build a business that could later be sold independently;
• establish long-term UK commercial infrastructure.

A subsidiary can also make the relationship clearer for UK customers, suppliers and financial providers because the counterparty is a UK company rather than the foreign parent.

UK government guidance notes that UK businesses and lenders are familiar with subsidiary structures.

However, the fact that a subsidiary can be formed does not mean that it is automatically the best route.

The structure should follow the commercial plan.

2. When Might a UK Branch Be More Appropriate?

A UK establishment may be worth considering where:

• the UK operation is intended to remain legally part of the overseas company;
• the parent is comfortable accepting direct liability for UK operations;
• the UK presence is relatively limited;
• significant contracts will remain with the parent;
• the group has a tax or accounting reason for keeping the operation within the parent;
• the UK operation is part of an initial market-entry phase.

A branch should not be viewed merely as a cheaper version of a subsidiary.

Registration can require certified constitutional documents and potentially accounts from the overseas company.

Companies House currently requires an overseas company opening a UK establishment to register within one month of opening it and charges £124.

Depending on the parent’s accounting obligations under its home-country law, ongoing UK filing obligations may also include parent-company accounting documents.

For some international groups, the additional parent-company disclosure alone becomes an important factor in the branch-versus-subsidiary decision.

3. UK Subsidiary vs Branch: The Questions That Usually Decide It

Who should carry the UK operating risk?

A subsidiary creates a separate legal entity.

A branch does not.

If the overseas parent wants a distinct legal vehicle for UK contracts and operations, a subsidiary can therefore be more appropriate.

This does not mean the parent can never become liable. Parent guarantees, financing arrangements, contractual commitments and group conduct can still create exposure.

Who should UK customers contract with?

If contracts will continue to be signed by the overseas parent, a branch or direct trading model may be sufficient.

If the group wants customers to contract directly with a UK company, a subsidiary may provide a clearer structure.

Will the operation employ people?

A subsidiary frequently provides a straightforward local employer structure.

A branch can also employ staff, but payroll, employment, immigration and tax implications still need to be analysed.

Will the UK business need investment or financing?

A separate subsidiary can make it easier to identify the UK operation independently for:

• investment;
• financing;
• joint ventures;
• group restructuring;
• a future disposal.

How much parent-company information will become publicly available?

A registered UK establishment can create filing obligations relating to the overseas parent itself.

A subsidiary instead has its own UK Companies House record and filing obligations.

Is the UK expansion temporary or long-term?

A limited market test does not always justify creating a new subsidiary.

A long-term UK operating platform is more likely to justify one.

Unsure Which UK Structure Fits Your Overseas Company?

Before incorporating, Seven Oak Prestige can help organise the parent-company information, proposed UK activities and practical setup questions that need to be considered.

The objective is to establish the right structure—not simply the fastest company.

4. Can a Foreign Company Own 100% of a UK Limited Company?

A common group structure is:

Overseas Parent Company

↓

100% ownership

↓

UK Limited Company

This creates a wholly owned UK subsidiary.

However, corporate ownership creates additional questions around the UK company’s ownership and control disclosures.

It is not always correct simply to record:

“The overseas parent is the PSC.”

Companies House distinguishes between individual people with significant control and legal entities that may qualify as registrable relevant legal entities.

A proper ownership review should therefore consider:

Step 1 — Ultimate ownership
Who ultimately owns the foreign parent?

Step 2 — Voting rights
Who controls voting rights through the ownership chain?

Step 3 — Board appointment rights
Who can appoint or remove the majority of directors?

Step 4 — Significant influence or control
Are there additional contractual or governance rights that create control?

Step 5 — Corporate entities
Does a company in the ownership chain qualify to be recorded as a relevant legal entity?

Companies House states that a PSC will generally include an individual holding more than 25% of shares or voting rights, the right to appoint or remove a majority of directors, or other significant influence or control. More complex corporate structures require the wider PSC rules to be applied.

Complex international ownership structures should be reviewed rather than simplified mechanically.

5. Documents the Overseas Parent Should Prepare

Requirements depend on the structure, jurisdiction and onboarding process, but an overseas parent should normally expect to organise information such as:

Parent Company

• legal company name;
• jurisdiction of incorporation;
• registration number;
• registered office;
• Certificate of Incorporation or equivalent;
• constitutional documents;
• directors;
• authorised representatives;
• current corporate records where relevant.

Ownership

• shareholder structure;
• ultimate beneficial owners;
• ownership percentages;
• voting rights;
• group structure chart where useful;
• intermediate holding companies.

Individuals

For relevant directors, shareholders and controllers:

• valid identification;
• residential address;
• proof of address where required;
• Companies House identity-verification information where applicable.

UK Operation

• proposed business activity;
• products or services;
• target customers;
• expected turnover;
• countries of operation;
• UK contracts;
• expected staff;
• premises or warehousing requirements;
• banking requirements;
• expected transaction profile;
• planned funding.

Documents that are not in English may require appropriate translation.

Branch registration specifically requires certified constitutional documents and can require translated and accounting documents depending on the overseas company’s circumstances.

6. Do UK Subsidiary Directors Need to Live in the UK?

No.

Companies House states that directors do not have to live in the UK.

The company itself must, however, have an appropriate UK Registered Office.

This should not be confused with other questions.

A UK-resident director is not required merely because an overseas company wants to incorporate a normal private UK company.

But director residence can still matter when considering:

• banking;
• tax;
• management and control;
• operational substance;
• licensing;
• local decision-making.

Appointing a UK-resident director purely to create the appearance of UK substance is not a substitute for genuine commercial governance.

For the wider responsibilities of UK directors, see our UK Company Director Duties for Non-Residents guide⁠.

7. Companies House Identity Verification

Identity verification should be planned early in a UK market-entry project.

Companies House’s current incorporation service states that a person registering a company may need the personal code received after identity verification.

PSC identity-verification obligations also now form part of the Companies House framework.

Do not leave this until the intended incorporation day.

For overseas directors and owners, see:

Companies House Identity Verification for Non-Residents: Complete Guide⁠

and:

Companies House Identity Verification Deadline⁠

8. Registered Office, Service Address and Operational Premises

Every UK limited company needs an appropriate UK Registered Office.

But an overseas parent should distinguish carefully between:

Registered Office
The company’s statutory address.

Director Service Address
The public correspondence address for a director.

Trading or Operational Address
Where the business actually operates.

Warehouse or Fulfilment Location
Where stock may physically be stored.

These addresses can serve different purposes.

A professional Registered Office does not automatically establish that a company has substantive UK operations.

Banks, regulators, customers, procurement platforms and licensing bodies may separately ask where business activities actually take place.

For the distinction, read:

Registered Office vs Director Service Address for UK Companies⁠

If the parent does not have its own UK premises:

UK Company Formation Without a UK Address⁠

9. Substance, Governance and Commercial Reality

Incorporation creates a company.

It does not, by itself, create operational substance.

An overseas group should be able to explain:

• who manages the UK subsidiary;
• where key decisions are taken;
• who negotiates contracts;
• who signs contracts;
• where employees work;
• where customers are served;
• where revenue-generating functions occur;
• what the UK company actually contributes to the group;
• how the parent and subsidiary interact.

A Registered Office alone should not be presented as evidence that the business is genuinely operating from the UK.

For sophisticated groups, governance should also address:

• board approvals;
• conflicts of interest;
• director duties;
• authority limits;
• record keeping;
• related-party transactions;
• parent-company instructions.

UK subsidiary directors remain directors of the UK company and retain their statutory responsibilities even where the parent owns 100% of the shares.

10. Funding the UK Subsidiary

A foreign parent should decide how the UK operation will be funded.

Money transferred into the subsidiary should not simply be labelled later.

Common routes can include:

Share Capital

Funding contributed in return for shares.

Additional Equity

Further equity funding where appropriate.

Intercompany Loan

Funding that the subsidiary is expected to repay under documented terms.

Expense Reimbursement

Payment of genuine expenses incurred on behalf of another group company.

Trading Payments

Payments relating to genuine goods or services supplied between group entities.

The correct treatment can have accounting, tax and transfer-pricing consequences.

Established groups should document how funding enters the UK company and why.

11. Banking for a Foreign-Owned UK Subsidiary

A UK Certificate of Incorporation does not guarantee a bank account.

A bank, EMI or payment provider may review:

• parent-company jurisdiction;
• ultimate owners;
• directors;
• business activity;
• customers;
• suppliers;
• transaction jurisdictions;
• expected turnover;
• transaction sizes;
• currencies;
• source of funds;
• group structure;
• website;
• contracts;
• invoices;
• UK operational activity.

A clear subsidiary structure can make the commercial purpose easier to explain, but each provider maintains its own eligibility and risk appetite.

For the broader landscape, use our existing guide:

UK Business Banking for Non-Residents: Banks, Fintechs & Eligibility 2026

If an application has already been declined, use:

UK Business Bank Account Rejected? What Non-Resident Founders Should Do Next⁠

A subsidiary should never be created solely because someone expects a particular bank, fintech or payment processor to approve it.

12. Corporation Tax

A UK subsidiary is a separate UK company and normally has its own UK Corporation Tax obligations.

For the Corporation Tax year beginning 1 April 2026, HMRC lists:

Small profits rate: 19% for qualifying profits up to £50,000.

Main rate: 25% for profits above £250,000.

Marginal Relief: potentially available between the relevant thresholds.

These are profit thresholds, not turnover thresholds.

For corporate groups, another important issue is associated companies. The relevant thresholds can be reduced where companies are associated, meaning an international group should not model the UK subsidiary entirely in isolation.

Tax consequences can also arise from:

• group funding;
• intercompany charges;
• intellectual property;
• management services;
• transfer pricing;
• withholding taxes;
• permanent establishment issues;
• treaties.

Specialist cross-border tax advice may therefore be appropriate.

13. VAT

A UK subsidiary does not automatically need VAT registration simply because it has been incorporated.

For an established UK business, the current domestic VAT registration threshold is £90,000 of taxable turnover.

However, the threshold is only one part of the analysis.

VAT can depend on:

• what is supplied;
• where it is supplied;
• customer type;
• imports;
• stock location;
• overseas transactions;
• exempt supplies;
• reverse-charge rules;
• whether the business is established in the UK for VAT purposes.

HMRC specifically applies different rules to non-established taxable persons, so an overseas business should not assume the ordinary threshold always answers the VAT question.

VAT should therefore be reviewed against the actual operating model.

14. EORI and Customs

A UK subsidiary involved in moving goods internationally may need an EORI number.

This can be relevant to:

• manufacturers;
• wholesalers;
• distributors;
• aerospace and industrial suppliers;
• e-commerce businesses;
• importers;
• exporters.

HMRC states that a business may need an EORI when moving goods between Great Britain and another country and that Northern Ireland can involve separate EORI considerations.

The customs role also matters.

The business should establish:

• who is importer of record;
• who submits customs declarations;
• where goods enter;
• where goods are stored;
• whether an intermediary is used;
• who holds the customs responsibility.

A service company does not require an EORI merely because it owns a UK Ltd.

15. UK Employees, PAYE and Workplace Obligations

If the subsidiary intends to employ people in the UK, incorporation is only the beginning.

The project may also involve:

• PAYE registration;
• National Insurance;
• payroll reporting;
• employment contracts;
• workplace pensions;
• holiday and sick-pay obligations;
• employer’s liability insurance;
• right-to-work checks;
• immigration or sponsorship requirements where relevant.

UK employers must check that employees have the right to work before employing them.

Eligible employees can also trigger workplace-pension auto-enrolment duties.

The analysis can differ where personnel are:

• contractors;
• seconded from the parent;
• employed through an Employer of Record;
• temporarily working in Britain;
• transferring from overseas.

Employment structure should therefore be planned rather than added as an afterthought.

16. A UK Company Does Not Provide Immigration Permission

A foreign shareholder can own a UK company.

A foreign director can direct a UK company.

Neither fact automatically gives that person permission to live or work in the UK.

Company law and immigration law are separate.

If overseas founders, directors or employees will physically work in Britain, their immigration and right-to-work position should be reviewed separately.

For founders considering the distinction, see:

Does Owning a UK Company Give You a UK Visa?⁠

17. Intercompany Agreements and Transfer Pricing

Once a subsidiary trades with its parent or other group companies, those relationships should be documented appropriately.

Management Services

Typical documentation:
Written service agreement, description of services, pricing methodology and invoices.

Product Supply

Typical documentation:
Supply agreement, pricing basis, delivery terms and commercial invoices.

Intellectual Property Licence

Typical documentation:
Licence agreement, ownership evidence and royalty methodology.

Intercompany Loan

Typical documentation:
Loan agreement, interest terms and repayment provisions.

Staff Secondment

Typical documentation:
Secondment agreement, employment responsibilities and cost-allocation methodology.

Incorporating two companies within the same group does not mean transactions between them can simply be priced or described arbitrarily.

Material cross-border arrangements can require specialist transfer-pricing and tax advice.

18. Accounting, Accounts and Annual Compliance

A UK subsidiary acquires its own ongoing compliance responsibilities.

Depending on its circumstances, these can include:

• annual accounts;
• Confirmation Statement;
• Corporation Tax administration;
• Company Tax Return;
• VAT returns where registered;
• PAYE reporting where applicable;
• maintenance of statutory records;
• Companies House updates;
• accounting records;
• potentially audit requirements.

The subsidiary’s obligations should also fit into the wider group reporting process.

If the UK subsidiary will be managed from overseas, it is also worth deciding early whether the company needs ongoing professional accounting support or whether some obligations can reasonably be handled internally. See Does a Non-Resident-Owned UK Company Need an Accountant?⁠

For the main recurring UK deadlines, use our:

UK Company Compliance Calendar for Non-Resident Directors⁠

For HMRC administration, also see:

HMRC Business Tax Account for a Non-Resident-Owned UK Company⁠

19. Should the UK Subsidiary Use the Same Financial Year-End as the Parent?

Often, aligning the UK subsidiary’s reporting period with the overseas parent can simplify:

• consolidation;
• management reporting;
• group audit;
• intercompany reconciliation;
• budgeting;
• financial planning.

It is not mandatory in every situation.

But it is worth making the decision deliberately during setup instead of discovering later that the subsidiary and parent have inconvenient reporting periods.

20. Regulatory Screening Before Launch

Registering a UK company does not authorise it to conduct regulated activity.

Depending on the sector, separate permissions, registrations or licences may be necessary.

Examples can include businesses operating in:

• financial services;
• payments;
• cryptoassets;
• insurance;
• healthcare;
• pharmaceuticals;
• recruitment;
• education;
• transport;
• environmental services;
• waste;
• food;
• telecoms;
• property activities;
• defence;
• controlled imports or exports.

Regulatory screening should therefore take place before commercial launch, not after incorporation.

21. Data Protection and Customer Information

Where the subsidiary handles customer, employee or business-contact data, the group should also review UK data-protection responsibilities.

This can be particularly relevant to:

• SaaS companies;
• technology companies;
• e-commerce businesses;
• marketing agencies;
• healthcare businesses;
• online platforms.

Issues can include:

• UK GDPR;
• privacy notices;
• controller and processor responsibilities;
• processor agreements;
• international data transfers;
• marketing consent;
• cookies and online tracking.

Data-protection requirements depend on the actual processing activities and should be assessed separately.

22. A Practical UK Subsidiary Setup Sequence

For an established overseas company, Seven Oak Prestige would organise the project around the following sequence.

Stage 1 — Define the UK Operating Model

Clarify whether the business should consider:

• direct cross-border trading;
• a UK establishment;
• or a separate subsidiary.

Do this before incorporation.

Stage 2 — Review the Overseas Parent

Confirm:

• legal status;
• jurisdiction;
• registration;
• directors;
• ownership;
• ultimate controllers;
• group structure.

Stage 3 — Design the UK Company

Determine:

• company name;
• shareholder structure;
• shares;
• directors;
• PSC/RLE treatment;
• Registered Office;
• service addresses;
• business activities;
• SIC codes;
• accounting reference date.

Stage 4 — Complete KYC and Identity Requirements

Prepare the relevant corporate and personal documents and deal with Companies House identity-verification requirements.

Stage 5 — Incorporate the UK Subsidiary

Submit the company with the agreed structure.

Companies House currently charges £100 for the standard online incorporation service and states that applications are usually processed within 24 hours.

Stage 6 — Establish Group Funding and Governance

Document how the parent will fund the UK subsidiary.

Clarify:

• capital;
• loans;
• director authority;
• bank mandates;
• intercompany relationships;
• board approval processes.

Stage 7 — Banking and Commercial Readiness

Prepare for:

• business banking;
• payment providers;
• customer onboarding;
• supplier onboarding;
• contracts;
• invoices;
• operational documentation.

Stage 8 — Review Tax and Registrations

Assess, where relevant:

• Corporation Tax;
• VAT;
• PAYE;
• EORI;
• customs;
• sector-specific registrations.

Stage 9 — Prepare for Operations

Address:

• accounting;
• payroll;
• staff;
• insurance;
• data protection;
• regulatory requirements;
• contracts;
• premises;
• ongoing compliance.

23. How Long Does a UK Subsidiary Take to Set Up?

The legal company can be incorporated quickly.

Companies House currently says online companies are usually registered within 24 hours.

But that is not the same as being operational.

A serious UK market-entry timetable may also depend on:

• parent-company KYC;
• identity verification;
• banking;
• VAT;
• PAYE;
• customs registrations;
• licensing;
• employment;
• contracts;
• premises;
• stock;
• data protection;
• specialist tax or legal work.

The better question is therefore:

“When can our UK operation function properly?”

—not simply:

“When will we receive a Certificate of Incorporation?”

24. Common UK Market-Entry Mistakes

Incorporating Before Choosing the Structure

Do not choose the legal entity first and work backwards.

Start with the operating model.

Assuming UK Customers Automatically Require a UK Company

Many overseas companies can trade with UK customers without immediately establishing a UK subsidiary.

Confusing a Registered Office With Genuine UK Operations

A statutory address is not automatically a trading location, office, warehouse or evidence of economic substance.

Incorrectly Mapping Corporate Ownership

A foreign corporate shareholder does not remove the need to analyse ultimate control and UK PSC requirements.

Thinking About Banking Only After Formation

Banking readiness should be considered while designing the structure.

Sending Parent Money Into the Subsidiary Without Defining It

Know whether funding is capital, a loan, reimbursement or payment for a genuine transaction.

Ignoring Intercompany Agreements

The UK subsidiary and foreign parent are separate entities.

Their material transactions should be supported appropriately.

Assuming VAT Is Simply a £90,000 Question

Cross-border transactions, imports and establishment status can change the analysis.

Ignoring Regulation Until After Incorporation

Companies House incorporation does not provide sector authorisation.

Treating the UK Company as an Immigration Route

Ownership and directorship do not themselves provide permission to work or reside in Britain.

25. Seven Oak Prestige — Overseas Company UK Market-Entry Checklist

Before instructing incorporation, an overseas company should be able to answer the following.

Commercial Purpose

Why does the group need a UK operation?

What will the UK business actually do?

Who will its customers be?

Will contracts be signed by the parent or the UK company?

Ownership and Governance

Who will own the UK company?

Who ultimately controls the group?

Who will become UK directors?

Who can approve major decisions?

Operations

Will the business employ people in the UK?

Will it have premises?

Will it hold stock?

Will it import or export goods?

Will it participate in procurement or regulated activities?

Finance

How will the parent fund the subsidiary?

Will intercompany transactions take place?

Does the business require UK banking?

What turnover and transaction profile is expected?

Tax and Compliance

Does VAT require review?

Does PAYE apply?

Is an EORI required?

Are specialist tax or transfer-pricing questions present?

Should the UK financial year align with the parent?

If several of these questions remain unanswered, incorporation may be premature.

26. How Seven Oak Prestige Supports Overseas Companies Entering the UK

Seven Oak Prestige supports established international businesses with the practical corporate and compliance-preparation work involved in establishing a UK operation.

Depending on the project, support may include:

• UK subsidiary formation;
• parent-company onboarding;
• corporate ownership review;
• share-structure preparation;
• SIC-code and activity review;
• Registered Office;
• Director Service Address;
• Companies House processes;
• identity-verification support;
• banking-readiness preparation;
• VAT and EORI coordination;
• initial compliance planning;
• post-incorporation administration;
• coordination with accounting, legal, tax or regulatory specialists where required.

For an established overseas business, we approach the project as UK market entry—not simply company registration.

Where specialist legal, tax, immigration, employment, regulatory or transfer-pricing advice is required, appropriately qualified professional advice should be obtained.

Planning a UK Subsidiary, Branch or Wider UK Market Entry?

If your business is already established overseas, send Seven Oak Prestige:

Parent-company country: Where is the existing company registered?

Business activity: What does the parent company currently do?

UK plan: What will the proposed UK operation do?

UK presence: Will you require staff, premises, stock, distribution or local contracts?

Banking: Will the UK operation require banking or payment infrastructure?

Timeline: When do you intend to begin UK operations?

We can help identify the corporate setup, documentation and practical compliance questions that should be addressed before incorporation begins.

Discuss My UK Market Entry

Frequently Asked Questions

Can a foreign company own 100% of a UK Limited Company?

A foreign corporate parent can own a UK company. The UK company’s ownership and PSC position must still be analysed and reported correctly.

Is a UK branch the same as a UK subsidiary?

No.

A branch or UK establishment remains part of the overseas company.

A subsidiary is a separate UK legal entity.

Does every overseas company selling to UK customers need a UK company?

No.

Companies House states that carrying on UK business does not automatically require registration of a UK establishment. Physical UK presence is an important part of the Companies House test.

However, Corporation Tax, permanent-establishment, VAT and other obligations use separate rules.

Does a UK subsidiary require a UK-resident director?

No. Companies House states that directors do not have to live in the UK, although the company must have a UK Registered Office.

How much does it cost to incorporate a UK subsidiary?

The standard Companies House online incorporation fee is currently £100.

Professional services, addresses, identity verification, accounting, banking preparation, VAT, legal work and other operational costs are separate.

How quickly can a UK subsidiary be incorporated?

Companies House currently states that an online company is usually registered within 24 hours.

Becoming operational can take longer because banking, tax, staffing, VAT, regulatory and commercial setup follow separate timelines.

Does the subsidiary automatically need VAT?

No.

For established businesses, the standard domestic VAT registration threshold is currently £90,000 of taxable turnover, but cross-border and non-established-business rules can create different outcomes.

Can a UK subsidiary open a UK business bank account?

It can apply.

Approval is not guaranteed.

Providers can assess the subsidiary, overseas parent, beneficial owners, directors, jurisdictions, business model, expected transactions and supporting evidence.

Does a UK subsidiary pay Corporation Tax?

A UK subsidiary generally has UK Corporation Tax obligations.

For the 2026 Corporation Tax year, HMRC currently lists a 19% small-profits rate and a 25% main rate, with Marginal Relief between the relevant thresholds. Associated-company rules can affect those thresholds.

Does forming a UK subsidiary give overseas directors a UK visa?

No.

Company ownership and directorship are separate from immigration permission.

Should the UK subsidiary use the same accounting year as the parent?

It is not compulsory in every case, but alignment can simplify group reporting, consolidation and intercompany accounting.

About the Author

Isaac Jackson

Founder & Managing Director — Seven Oak Prestige Ltd

Isaac Jackson supports international founders and overseas businesses with UK company establishment, Companies House processes, statutory-address arrangements, compliance preparation and banking readiness.

His work focuses particularly on the practical issues that arise when companies and founders manage UK structures from outside the United Kingdom.

Editorial Methodology

Last reviewed: 15 September 2026

This guide was prepared using current Companies House, HMRC and UK government guidance relating to:

• overseas companies operating in the UK;
• UK establishments;
• UK subsidiaries;
• Companies House incorporation;
• identity verification;
• PSC requirements;
• Corporation Tax;
• VAT;
• EORI;
• employment and right-to-work obligations.

It is designed for established overseas companies evaluating UK market entry and is separate from Seven Oak Prestige’s general non-resident company-formation guidance and country-specific subsidiary content.

Important Disclaimer

This guide provides general information about UK corporate establishment and practical market-entry considerations.

It does not constitute personalised legal, tax, immigration, employment, customs, regulatory or transfer-pricing advice.

The appropriate structure depends on the overseas parent, ownership, activities, jurisdictions and proposed UK operations. Specialist professional advice should be obtained where required.

Related Guides

UK Company Formation for Non-Residents: Complete Guide⁠

For individual overseas founders rather than an established foreign parent company.

UK Subsidiary for an Indian Company⁠

For companies specifically expanding from India into the UK.

Companies House Identity Verification for Non-Residents⁠

For overseas directors and owners dealing with Companies House identity verification.

Registered Office vs Director Service Address⁠

Understand the difference between the company’s statutory address and directors’ public service addresses.

UK Company Formation Without Your Own UK Address⁠

For overseas businesses without existing UK premises.

UK Company Director Duties for Non-Residents⁠

For directors managing the UK subsidiary from overseas.

UK Business Bank Account Rejected? What Non-Resident Founders Should Do Next⁠

For foreign-owned companies that have already encountered banking difficulties.

UK Company Compliance Calendar for Non-Resident Directors⁠

For the ongoing Companies House and HMRC obligations after incorporation.

HMRC Business Tax Account for Non-Resident-Owned UK Companies⁠

For managing UK tax administration after setup.