Should I open a UK Ltd as EU resident?

[curious7]

I was planning to move to London and open a ltd company in the UK but the pandemic happened. Now I don't know when I'm going to be able to do that (considering we're in the middle of the pandemic) or if it's a good idea anymore. Brexit, IR35, London being expensive and Covid in the UK.. the insecurity adds up. I'm reading that many people are moving out of (or have already left) London due to the pandemic.

I'm from a EU country that doesn't have a good ecosystem for entrepreneurship and I want to leave the country for personal reasons as well. My idea was to be in London for at least 6 months per year (for taxation reasons). After December 2020 it will also become harder to open an Ltd as a EU resident because of Brexit.

From what I've read (and I've read quite a lot) it is going to be a problem if where you reside is different from where the company is located. So I'm trying to see where to move that is helpful to the business but also somewhere I like living.

Any advice?

[GhostofTarbera]

Depends what’s your new exciting business you are bringing to London ? Why is it London centric? As Blackpool for example is much cheaper




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[Paddy]

Move to London is one thing, open a ltd company in the UK is another separate issue.

Where have you been reading that many people are moving out of (or have already left) London due to the pandemic? That does not make sense as London is not the worst place?

Which EU country are you from?

Opening up a Ltd Co will not be more difficult after 2020 however, working in the UK will be more difficult.

Depending on which country you reside, you will be taxed on world wide income, therefore six months is meaningless. Its not tax free.

You don't have to be resident in the UK to open a limited company, you can do it online via an agent for less than 50e. You can use a ghost office address for a small fee. You can keep the company dormant until you need it.

"Any advice?", You need to give more info if you want further help.

[dsc]

Also consider that after Brexit some companies outside of the UK might not want to deal with a UK Ltd, at least for some time until the dust settles and everyone knows all the rules.

You need to explain what you need the UK ltd for.

[curious7]

Depends what’s your new exciting business you are bringing to London ? Why is it London centric? As Blackpool for example is much cheaper

I'd like to live in London but my clients are from all over the world.

[curious7]

Also consider that after Brexit some companies outside of the UK might not want to deal with a UK Ltd, at least for some time until the dust settles and everyone knows all the rules.

You need to explain what you need the UK ltd for.

I'd like to move to either London or Berlin and the UK ltd seems much more flexible, easy to administer and with less bureaucratic hurdles. On the other hand there's Brexit and the other points I explain in the original post.

There's so many UK companies that I don't think this will be a major problem.. I'm in software.

[curious7]

Depending on which country you reside, you will be taxed on world wide income, therefore six months is meaningless. Its not tax free.

I'm in Greece. Any EU country can claim that the company is local if you're staying in that country for longer than 183 days. I did not mention anything about avoiding taxes.
I'm just saying that if I move to the UK and open an UK ltd, I have to be there at least for 6 months so that I get taxed there (corporate tax and personal income tax).

[curious7]

Opening up a Ltd Co will not be more difficult after 2020 however, working in the UK will be more difficult.

Even if you're self-employed? If yes, could you elaborate on what would change?

[BlasterBates]

You'll be taxed whereever you work, so if your intention is to pay UK tax you need to be actually working there. If you work in another country then you need to tax yourself there. If you divide your time you need to pay tax proportionately in both countries.

So to summarise you will be taxed in both countries but you will be resident in one of those countries. In the country where you are resident you also declare the income that is taxed in the other country i.e. in the country you are resident as you are taxed on your worldwide income; however tax paid in the other country will be deducted from any tax bill.

Whether you spend more than 6 months in the UK or not won't change the fact that income will be taxed in the other country if you spend time working there.

The only time residency becomes an important factor is when you have significant income from investments which are only taxable in the country in which you are resident.

[dsc]

Also make sure to read up on double taxation, I think there's some changes coming next year which mean that depending on where you work and where you live, you might get taxed in both countries (for example if the tax free allowance in your work country is above the tax free allowance in the country where you live).