Setting up a UK company as a Chinese business: steps, costs and timing (2026)
Short answer: most Chinese businesses set up a UK private limited company as a subsidiary. Registering it online costs £100 from 1 February 2026 and usually takes a day or two. Every director and person with significant control must verify their identity first. The slow parts after registration are the business bank account (often the longest step for non-resident owners) and registrations with HMRC for tax, VAT, customs (EORI) and payroll.
Subsidiary or UK branch?
| UK private limited company (subsidiary) | UK establishment of the Chinese company (branch) | |
|---|---|---|
| Legal status | A separate UK company owned by the Chinese parent | Part of the Chinese company, registered in the UK |
| Liability | Limited to the UK company | The Chinese company is directly liable |
| Registration | Incorporate at Companies House | Register with Companies House within one month of opening |
| Common use | Trading, hiring, contracting with UK customers, holding stock | Representative or project activity where the parent wants to contract directly |
The choice affects tax, accounts and risk, so make it with a UK accountant and solicitor.
What are the steps, in order?
- Prepare the details: company name, at least one director (an individual aged 16 or over), shareholders, the people with significant control, a business activity code, a UK registered office address that is an "appropriate address" (not a PO box), and a registered email address.
- Verify identities: every director and person with significant control must verify their identity with Companies House. See our guide for overseas directors.
- Incorporate: online through Companies House or a formation agent. The certificate of incorporation shows the company number.
- Open a business bank account: high-street banks usually want at least one UK-resident director. Non-resident owners often start with an electronic money provider such as Wise, Airwallex, Revolut Business or Tide, then move to a bank later.
- Register for corporation tax: within three months of starting to do business.
- Register for VAT: compulsory once UK taxable turnover passes £90,000 in 12 months; you can register earlier voluntarily, which is common for importers who want to reclaim import VAT.
- Get an EORI number: needed to import or export goods through customs in Great Britain.
- Set up payroll (PAYE): before the first payday for any employee or paid director.
- Pay the data protection fee: most businesses that handle personal data pay the Information Commissioner's Office; the micro-business tier is £52 a year.
What does it cost in government fees?
| Item | Fee |
|---|---|
| Incorporation online (from 1 February 2026) | £100 |
| Incorporation same-day | £156 |
| Annual confirmation statement online | £50 |
| Director identity verification through GOV.UK One Login | Free |
| VAT, EORI, corporation tax and PAYE registration | Free |
| ICO data protection fee (micro business) | £52 a year |
Professional fees (formation agent, registered office service, accountant, solicitor, bank) are extra and vary widely.
What taxes apply?
- Corporation tax: 25% main rate; 19% small profits rate for profits up to £50,000, with marginal relief up to £250,000.
- VAT: standard rate 20%. Import VAT can usually be accounted for on the VAT return under postponed VAT accounting.
- Payroll: income tax and National Insurance through PAYE.
What about staff from China?
Bringing staff from China usually needs a sponsor licence and Skilled Worker visas. Since 22 July 2025 most Skilled Worker roles must be at degree level, with a general salary threshold of £41,700. Immigration advice in the UK is regulated: take it from an OISC-registered adviser or an immigration solicitor.
Is government approval needed?
Setting up a new company does not need approval. Buying shares or voting rights in a UK business in one of the sensitive sectors (currently 17, for example energy, defence, communications, artificial intelligence and data infrastructure; the government has confirmed water, critical minerals and semiconductors will be added) can require mandatory notification under the National Security and Investment Act 2021. Asset purchases and other deals do not need mandatory notification but can be called in for review, and the government can block deals or attach conditions.
What has to be filed every year?
| Filing | When |
|---|---|
| Confirmation statement | At least once every 12 months |
| Annual accounts to Companies House | First accounts within 21 months of incorporation; then within 9 months of the year end |
| Corporation tax return (CT600) | Within 12 months of the year end; tax normally paid 9 months and 1 day after it |
| VAT returns | Usually quarterly, once registered |
Sources
- Rapid Formations: Companies House fees from 1 February 2026
- Wise: business accounts for non-residents
- DavidsonMorris: Skilled Worker visa changes 2025
- Lewis Silkin: ICO data protection fee from February 2025
- Clifford Chance: National Security and Investment Act annual report 2025-26
- Hill Dickinson: upcoming changes to the National Security and Investment Act
- GOV.UK: set up a limited company