What happens to my limited company if I move abroad?

Can I move my limited company abroad or should I close it?

If your personal circumstances have changed or you’ve had enough of the UK’s indifferent weather, you might consider moving abroad. One thing that can hold you back from building a new life overseas is having a limited company in the UK. The good news if you’re in this situation is that you have plenty of options. 

If the company is no longer profitable or you’re ready for something new, you could choose to close it. On the other hand, if the company is still viable and you’d like to continue running it from overseas, you can. That way, you’ll be able to retain your staff and client base and move abroad with a stable income stream. 

Can I move my limited company to a new country?

You cannot simply move your UK limited company as it’s registered in the UK and has a UK address. If you want to run the business and serve customers overseas, you can close the UK business and register a company in your new country of residence. That could be an option if you no longer need the UK company or don’t want to pay tax in the UK. 

Assuming your UK company is solvent then, depending on the value of its assets, you can close it via Voluntary Dissolution or Members’ Voluntary Liquidation (MVL). If it’s insolvent, you can use a Creditors’ Voluntary Liquidation (CVL) to bring an end to its affairs.

Voluntary Dissolution

Also known as Company Strike Off, Voluntary Dissolution is the easiest and cheapest way to close a solvent UK company. First, you must pay any creditors, transfer assets away from the business, inform HMRC and submit final accounts to Companies House. You can then complete form DS01 to apply to strike the company off the official register.

Members’ Voluntary Liquidation (MVL)

If your business is solvent and has valuable assets, the most tax-efficient closure method is likely to be a Members’ Voluntary Liquidation. In this process, you appoint a liquidator to sell the business’s assets and distribute the proceeds among the shareholders. The distributions from an MVL are subject to Capital Gains Tax rather than Income Tax, and you may also benefit from Business Asset Disposal Relief.

Creditors’ Voluntary Liquidation (CVL)

If you want to close a company with debts it cannot afford to pay (it’s insolvent), you can use a Creditors’ Voluntary Liquidation (CVL). In this process, the business’s assets are sold for the benefit of its creditors and any debts it cannot pay are written off. The company is then removed from the register and you can start a new business abroad. 

What are my other options?

Set up an overseas branch of your UK business

You cannot move your UK company abroad, but you can set up a new branch of the business overseas and still retain your UK company. You can even use the same company name as both businesses are considered part of the same group.

As you’re setting up a second branch of a UK limited company, it’s considered an extension of UK trade. That means you will still have tax obligations in the UK and pay UK Corporation Tax on profits. Even if you live abroad permanently and are a non-UK resident, you will still pay tax on your income as you are employed by a company that’s based in the UK.  

You must also register with the relevant tax authority in your new country. However, you may be able to claim Double Taxation Relief to alleviate the double charge on the same source of income.  

Manage your UK company from overseas

You don’t need to set up an overseas branch of your business to continue trading your existing business in the UK. If you want to trade your UK company from overseas, you must be aware of the rules about your personal tax status and company earnings in the country you are basing yourself in. 

If you run a UK-registered contractor company that normally comes under IR35 regulations from abroad, the IR35 legislation will not apply. The rules around PAYE and National Insurance can also be complicated, so it’s worth seeking professional advice. If you relocate, you must inform HMRC and Companies House and change your registered address as a director. 

Can I move abroad and make my UK company dormant?

Another option if you no longer want to trade your UK company is to make it dormant. That will prevent anyone else from using the trading name and allow you to quickly revive the company if you decide to move back to the UK or set up a branch overseas. 

A dormant company is not active and does not perform business transactions but remains on the official register at Companies House. While it’s dormant, you must file a confirmation statement and dormant accounts every year. There’s no limit to how long you can keep the company dormant, it’s inexpensive and you can start trading again at any time.  

Need advice?

If you’re moving abroad and are unsure what to do with your UK limited company, we can provide objective guidance and support that’s tailored to your circumstances. Please contact our team for a free, same-day consultation or arrange a meeting at one of our 100+ offices throughout the UK.