[ESTABLISHING A BUSINESS ENTITY IN ENGLAND] 170
why they did not apply before the deadline. Any EEA and Swiss nationals who do not have status under the EU Settlement Scheme who are arriving in the UK for the first time from 1 January 2021 onwards whether for business, work, study or to live, will be required to obtain an appropriate visa prior to travel. There are also restrictions on citizens of other countries living and working in the UK, and specific advice should be sought prior to travel. There are visa categories available for those wishing to establish a business in the UK (and be involved in the running of that business) and specific advice should be sought in advance before embarking on this venture. All businesses in the UK wishing to hire foreign migrants (who do not already hold appropriate visa status), will be required to obtain a Sponsor Licence in order to sponsor migrants to work for them in the UK. From 1 January 2021, EEA migrants who were not residing in the UK on or before 31 December 2020 will need to obtain a Skilled Worker visa before being able to enter and work in the UK. 9. Restrictions on remitting funds out of the jurisdiction
country of residence but will not be taxable in the UK. Branches A UK branch of an overseas company will pay UK corporation tax on its profits. Since a branch is not normally treated as a separate legal entity from the foreign corporation, the branch will not pay a “dividend” to the parent and no further tax will arise on repatriation of any profits to head office. The overseas company may be entitled to relief in its own jurisdiction for tax paid in the UK. 9.2 Transfer pricing Anti-avoidance legislation exists to prevent arrangements under which the UK operation charges artificially low prices to, or is charged artificially high prices by, foreign affiliates. The transfer pricing regime is in line with OECD guidelines. It will apply where the actual provisions in a transaction differ from the provisions which would have been made at arm’s length between independent enterprises as a result of which a potential advantage in relation to UK taxation is conferred. Transactions for this purpose are widely defined and include interest payments. This could lead to interest payments of thinly capitalised subsidiaries being disallowed as deductions in calculating taxable profits of the subsidiary. Companies are generally required to keep detailed records of information relating to transfer pricing although some smaller companies are relieved of this obligation. Our firm Fladgate LLP, located in central London, is a law firm renowned for understanding and anticipating our clients’ risks and opportunities. We pride ourselves on being our clients’ true partners in business, with an unrivalled understanding of the worlds in which they operate. With enterprising and commercial legal thinking at its core, the firm specialises in providing a wide variety of highly personalised legal services for a portfolio of prestigious clients in the UK and across Europe, India, Israel, the Middle East, Asia Pacific, South Africa, and North America.
9.1 Distribution of profits Companies/Subsidiaries
A UK may only pay dividends if it has a surplus on its profit and loss account in its balance sheet. This differs from other jurisdictions where a company is permitted to pay a dividend if it will still be solvent after the payment of that dividend. There is no withholding tax on payments of dividends by a UK company (unless the company is a real estate investment trust ( REIT )). Dividends received by non-residents will be taxable in accordance with the rules in their
ILN Corporate Group – Establishing a Business Entity Series
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