Can you run a UK limited company while living abroad?
Yes. There is no requirement to be UK resident, or even to have ever set foot in the UK, to be a director or shareholder of a UK limited company. You can own all the shares, act as sole director, and run the day-to-day business entirely from another country. Companies House and HMRC accept overseas directors as a matter of routine.
What changes when you live abroad is not your legal ability to run the company, but the tax consequences that follow. Three questions decide how complicated your position becomes: where the company is treated as tax resident, whether your activity abroad creates a taxable presence in that country, and how you can extract profit without being taxed twice. A UK company run by a director sitting in Dubai, Lisbon or Sydney can be perfectly straightforward or genuinely tangled, and the difference usually comes down to how those three questions are answered.
A common misconception is that moving abroad makes the company an offshore entity that escapes UK tax. It does not. The UK company remains a UK taxpayer by default, and your new country of residence may add its own claim on top. The practical goal is to understand both systems and structure your affairs so the two do not collide.
Where is your company tax resident? (central management and control)
A company incorporated in the UK is automatically UK tax resident, full stop. That is the starting point under the incorporation rule, and it does not change simply because the director lives overseas. The complication is that the same company can also become tax resident in a second country, because most countries (and UK case law) test residence by where a company is actually managed and controlled, not just where it is registered.
The UK case law test is central management and control (CMC). It comes from the long-standing De Beers principle that a company resides where its real business is carried on, and the real business is carried on where central management and control actually abides. CMC is the highest level of strategic decision-making: where the key decisions about the direction of the company are genuinely made, not where day-to-day operational work happens. For an owner-managed contractor company, that high-level control normally sits with you, the director.
So if you are the sole director and you make all the strategic decisions from your home abroad, the country you live in may well regard the company as managed and controlled there, and therefore tax resident there under its own rules. The UK still treats it as UK resident by incorporation. You now have a company that is potentially resident in two places at once, which is where dual residence and tax treaties come in.
Dual residence and creating a permanent establishment overseas
Dual residence is resolved by the tax treaty between the UK and your country of residence, through what is known as the tie-breaker. Historically the tie-breaker looked to the company's place of effective management. For treaties affected by the OECD Multilateral Instrument (in force for UK corporation tax since 1 April 2019), the tie-breaker now requires the two countries' competent authorities to agree a single jurisdiction of residence by mutual agreement, having regard to place of effective management, place of incorporation and other relevant factors. Two important consequences follow: the outcome is no longer automatic, and treaty benefits can be withheld until the authorities reach agreement. Dual residence is therefore something to design out of, not to rely on resolving cleanly after the fact.
A separate and often larger risk is permanent establishment (PE). Even if the company stays UK resident, your activity abroad can create a PE in the country you live in: a fixed place of business (for example, a home office from which you run the company) or a dependent agent who habitually concludes contracts there. A PE gives the local country the right to tax the profits attributable to it under its domestic law and the treaty. This risk is now under a sharper spotlight. The OECD's 2025 update to its Model Tax Convention (released on 19 November 2025) set out a framework for home-office PEs that includes a 50% working-time benchmark: broadly, where someone spends 50% or more of their working time for the company at a home or other location in another country, that location is much more likely to count as a fixed place of business. For a one-person UK company whose only director works full-time from an overseas home, that threshold is routinely crossed, which makes the home-office PE argument a live one rather than a theoretical one.
In plain terms: running a UK company from your kitchen table abroad can expose its profits to local corporate tax, on top of UK corporation tax. Whether it does depends on the facts, the specific treaty, and how the country you live in applies the rules. This is the single most important issue to get advice on before you move, because it is far easier to plan around than to fix retrospectively.
Does your UK company still pay UK corporation tax?
Yes. A UK-incorporated company pays UK corporation tax on its profits whether or not the director lives in the UK, unless a tax treaty reallocates the taxing rights to another country (which, as above, is not automatic). The default position you should plan around is that the UK company continues to file a CT600 and pay UK corporation tax in the normal way.
For the financial year beginning 1 April 2026 (FY2026), the rates are unchanged from recent years:
- Small profits rate of 19% on taxable profits up to £50,000.
- Main rate of 25% on taxable profits over £250,000.
- Marginal relief between £50,000 and £250,000, which tapers the effective rate up from 19% towards 25% using the standard fraction of 3/200.
The £50,000 and £250,000 limits are divided by the number of associated companies. If you control more than one company, each company gets a smaller slice of the bands, which can push profits into the 25% rate sooner. This matters if you have set up, or are thinking about, a company in your new country alongside the UK one.
Where a treaty does reallocate taxing rights, or a PE arises abroad, you may end up paying corporate tax in two systems and claiming relief for one against the other. That is workable, but it is not the simple offshore outcome people sometimes expect. The realistic planning assumption is: the UK company keeps paying UK corporation tax, and you manage any overseas layer on top of it.
Taking money out as a non-resident director
As a non-resident director-shareholder, you take money out of a UK company the same two ways anyone does: salary and dividends. What differs is the tax treatment, which depends on your residence, where your duties are performed, and the rules of the country you live in. The headline is that UK tax on extraction is often lower than people fear, but your country of residence usually steps in to tax the same income, so the two systems have to be looked at together.
Dividends from a UK company when you live abroad
The UK imposes no withholding tax on ordinary dividends, so a UK company can pay a dividend to an overseas shareholder without deducting anything at source. That is a genuine advantage of the UK structure. For 2026/27 the UK dividend tax rates that would otherwise apply rose from 6 April 2026 to 10.75% (ordinary rate), 35.75% (upper rate) and 39.35% (additional rate), with a £500 dividend allowance; the ordinary and upper rates each went up by 2 percentage points, while the additional rate was unchanged. Those rates only bite to the extent you are within the charge to UK tax.
For a non-resident, special rules limit UK income tax. UK dividends are a category of disregarded income under the legislation that caps a non-resident's UK tax liability. In broad terms, where the dividend is disregarded income and no tax was withheld at source (which is the case for UK dividends), the UK tax attributable to it can be reduced, often to nil. The mechanism involves giving up the UK personal allowance in the comparison, so it needs to be calculated, not assumed, and it applies only where you are non-resident for the whole tax year (not a split year). The point to take away is that UK tax on dividends paid to a genuinely non-resident shareholder is frequently very low or zero.
The catch is the other side. Your country of residence will almost always tax those dividends as your worldwide income. So the dividend that is lightly taxed or untaxed in the UK is taxed where you live, sometimes at a higher rate than the UK would have charged. The real planning question is rarely the UK rate; it is the rate in your country of residence and how the treaty splits the rights. A worked illustration: a hypothetical non-resident director draws a £60,000 dividend in 2026/27 from her UK company. UK tax may be minimal under the disregarded income rules, but if she lives in a country that taxes the dividend at, say, 28%, that is the cost that actually matters. Figures are illustrative only.
Salary, PAYE and National Insurance when your duties are overseas
Salary is taxed by reference to where the duties are physically performed, not where the company is registered. If you perform your director and employment duties entirely outside the UK, the earnings for that work are generally outside UK income tax, and a non-resident director performing duties abroad may have no UK PAYE on that pay. The crucial exception is directorship duties carried out in the UK: HMRC treats UK directorship duties as taxable in the UK, and even occasional UK board work can create a PAYE obligation on the portion relating to those UK duties.
National Insurance is a separate question with its own logic. Whether a non-resident director's earnings attract UK NICs depends on the social security position between the UK and your country, not just on income tax residence. Where a reciprocal agreement applies (for example, an A1 or other certificate of coverage), you can be kept in a single country's social security system and exempted from the other. The certificate must actually be obtained: without it, the default UK NIC treatment can apply even where exemption would have been available.
For non-resident directors from countries with no UK social security agreement, HMRC operates a narrow concession for NICs where the only UK activity is attending board meetings: broadly, no more than 10 board meetings a year with each UK visit lasting no more than two nights, or a single board meeting with a UK visit of no more than two weeks. The visit lengths cannot be averaged, and any work beyond attending board meetings takes you outside the concession. Step outside those limits and it is lost. Because salary and NIC interact with where you physically work and travel, the salary-versus-dividend mix for a non-resident director is genuinely case-specific, and small changes in travel patterns can change the answer.
Double taxation and tax treaties
Double taxation relief is what stops the same profit or income being fully taxed twice when both the UK and your country of residence have a claim. It works through the double tax treaty between the two countries and through unilateral relief in each country's domestic law. The treaty does two main jobs: it allocates taxing rights between the countries, and it provides relief (usually by exemption or by credit) where both still tax the same item.
For a UK company run from abroad, treaties are relevant at two levels. At company level, the treaty's residence tie-breaker and permanent establishment articles decide which country can tax the company's profits and which must give relief. At personal level, the treaty governs how your salary and dividends from the company are taxed across the two countries, and which country gives credit for the other's tax.
Relief is rarely automatic and almost never produces a refund of the higher of two tax bills; it generally limits you to paying the higher of the two rates overall, not avoiding tax entirely. It also depends on claiming correctly and, increasingly, on the company not being caught by anti-avoidance and treaty-shopping rules. The practical message is that treaties make a cross-border UK company workable, but they are technical, country-specific, and best mapped out in advance rather than relied on as a safety net after the fact.
IR35 and off-payroll working for contractors based abroad
For most genuinely overseas contractors, IR35 and the off-payroll working rules fall away, but not always, so the position needs checking rather than assuming. IR35 exists to tax disguised employment, where you work through your own company for a client in a way that looks like employment. The rules can only apply where there is a UK tax or National Insurance charge to protect in the first place.
If you are non-UK resident and performing the work outside the UK, a UK tax or NIC charge is unlikely to arise, so the off-payroll rules generally do not apply, even where the client has a UK connection. Similarly, where your end client is wholly overseas (not UK resident and with no UK permanent establishment immediately before the start of the tax year), the off-payroll rules do not apply and the client makes no status determination at all. In that case, responsibility for status technically reverts to the original IR35 rules and your own company, but for a non-resident contractor working abroad there is usually no UK charge for those rules to reach either.
The position changes when there is a UK thread. If your end client is UK-based or an overseas client with a UK branch or office, that client may have to assess your status and issue a status determination statement, and liability for unpaid PAYE and NICs can follow the UK connection. Proposed measures to strengthen labour-supply-chain compliance, including possible joint and several liability, also point towards tighter enforcement. So the safe approach for a contractor abroad is to map the residence of every party in the chain and the location where the work is done, rather than assuming distance from the UK automatically switches IR35 off.
VAT when your UK company trades internationally
VAT on cross-border services usually turns on the place of supply, which decides which country's VAT applies and who accounts for it. For services, the default rules split sharply between business and consumer customers, and getting the classification right is what keeps you out of trouble with HMRC.
The general position for a UK company supplying services is:
- Business-to-business (B2B) services to a customer outside the UK: the place of supply is normally the customer's country, so you do not charge UK VAT, and the customer accounts for VAT in their country under the reverse charge. To support this you should hold commercial evidence that the customer is in business and belongs outside the UK, and for EU customers their VAT registration number is the best evidence.
- Business-to-consumer (B2C) services to a customer outside the UK: the place of supply is normally where you (the supplier) are, so UK VAT at 20% generally applies, subject to exceptions for particular service types.
- Digital services to consumers (B2C) in the EU and many other countries: the place of supply is the customer's location, which can trigger registration obligations abroad rather than UK VAT.
There are specific override rules for certain services (land, events, some professional services to consumers, and others), so the categories above are the starting framework, not the full picture. You also need to watch your UK VAT registration position, the goods rules if you move physical products, and any registration thresholds in the countries where your consumers are. For an internationally trading UK company, VAT is often the most paperwork-heavy area, and it is worth getting the place-of-supply analysis documented per service line.
Keep the UK company, or set up where you live?
There is no universal answer; it depends on where you live, how long you plan to stay, where your clients are, and how serious the permanent establishment and dual-residence risks are in your country. The decision usually comes down to weighing the convenience and familiarity of the UK company against the risk of it being taxed twice or treated as locally resident.
Keeping the UK company tends to suit those who: still have mainly UK clients, expect to return to the UK, value the UK's reputation and banking, and are in a country where the CMC and PE risk can be managed. The downsides are the ongoing UK compliance burden and the chance that your country of residence taxes the company or its profits anyway.
Incorporating locally tends to suit those who: have settled abroad for the long term, serve mostly local or local-region clients, and would otherwise face a strong argument that the UK company is really being run (and so taxed) where they live. The downside is the cost and effort of a new entity, plus the work of winding down or repurposing the UK company. For some, a hybrid is right: keep the UK company for UK-facing work and run local activity through a local entity. This is exactly the kind of structuring decision where modelling both options on real numbers, rather than rules of thumb, pays for itself, and it is the work our fixed-fee cross-border service is built around.
Your ongoing Companies House and HMRC obligations
Living abroad does not pause a single UK filing obligation. The company still has to meet every Companies House and HMRC deadline, and the penalties for missing them apply regardless of where the director sits. The core obligations continue exactly as they would for a UK-based director:
- Annual accounts filed with Companies House, generally within nine months of the accounting reference date (dormant companies must still file dormant accounts).
- A confirmation statement filed with Companies House at least once every 12 months, keeping director, address and people-with-significant-control details up to date.
- A corporation tax return (CT600) filed with HMRC within 12 months of the end of the accounting period.
- Corporation tax paid to HMRC, normally nine months and one day after the end of the accounting period for smaller companies.
- PAYE real-time reporting where the company operates a payroll, and VAT returns where it is VAT registered.
There is also a recent identity-verification requirement: all company directors must verify their identity with Companies House. It became compulsory for new incorporations and appointments from 18 November 2025, and existing directors must verify during a transition period tied to their next confirmation statement, with the latest date being 18 November 2026. This applies to overseas directors just as it does to UK-based ones, and from late 2026 an unverified director can be blocked from filing the confirmation statement. Late or missed filings attract escalating penalties, can disrupt banking, and in serious cases risk the company being struck off. Running the company from abroad makes diary discipline more important, not less, because time differences and distance make it easier for a deadline to slip.