There isn't one best structure. As of October 2026, the right choice between a UK Ltd, a company in your new country or a UAE Free zone companyA company set up in a designated zone, such as those in the UAE, with its own rules on ownership, tax and what it can do. depends on two tests. The first is where your company is really run from. The second is how you're taxed personally when you take money out. Check both before you choose.
So what's the best structure if you live abroad?
The best structure depends on two separate questions. One is about the company: where is it resident, and does it have a taxable presence where you live? The other is about you: where are you resident, and how is the money taxed when it reaches you?
Most advice mixes the two up, and people end up with a tidy company and a messy personal tax bill, or the other way round.
Let's take them one at a time: company first, then you.
Does moving abroad make your UK company non-UK?
No, not by itself. A company is generally UK tax-resident if it's incorporated in the UK (with some exceptions), or if its Central management and controlWhere a company's real strategic decisions are taken, usually where the directors actually meet and decide. is in the UK 1.
"Central management and control" sounds like a spy agency. In practice it means where the company's highest-level decisions are really made 7. HMRC says where that happens is "wholly a question of fact." Where the board meets can matter, but it doesn't settle the question 7.
HMRC applies that test mainly to companies that aren't already UK-resident through incorporation. It doesn't mean every UK Ltd's residence turns on control alone 7.
There's one more term to know. A Double tax treatyAn agreement between two countries that decides who taxes what, so the same income isn't fully taxed twice. is an agreement between two countries about which of them taxes what. Treaties often use "place of effective management", meaning roughly where the most important management decisions are made in practice. That can differ from central management and control 7. HMRC gives an example: the executives work abroad, but the final directing power sits with non-executive directors who meet in the UK 7. The difference matters when two countries both claim the company, because residence can be disputed or arise in two places at once 1.
What to do: write down where the big decisions are actually made and who makes them, including any non-executive directors 7.
When does your work create a taxable presence where you live?
It can happen as soon as you carry on the company's business from your new country. That country may then say your UK Ltd, or any other foreign company, has a Permanent establishment (PE)A fixed place of business, or someone regularly signing deals, that lets a country tax part of a foreign company's profits. there and owes it tax 2.
This question is separate from residence. The UK's personal residence test decides neither it nor where the company is resident 8.
What to do: before you rely on a UK Ltd or a free-zone company, check with a local adviser whether your day-to-day work could create a PE where you live 2.
Where are the grey areas?
These points are grey because the answers turn on facts rather than fixed lines. A company's control is "a question of fact", and residence and PE claims can overlap between countries 7 1 2. Here's how strong each position is.
- Running a UK Ltd while you live and work abroadarguable
Why it's greythe company is generally UK-resident by incorporation, but your new country may claim a PE where you do the work [1] [2]
What it could meantax claims from two countries, with treaty terms deciding how they interact [1]
- Treating a foreign visa as proof you've left UK taxarguable
Why it's greya visa is an immigration status, and UK tax residence is decided by the Statutory Residence Test
What it could meanstaying UK tax resident while believing you've left, and UK residents are taxed on worldwide income and gains from 6 April 2025
- Using an offshore company or trust to cut tax while you stay in the UKaggressive
Why it's greyresidence is decided by the SRT, not by where a company is set up, and a company registered abroad can be UK-resident if it's controlled from the UK
What it could meanHMRC could look at it, and tax, interest and penalties may be payable depending on the facts and your conduct
Grey areas turn on the details: where you live, how the money moves and what paperwork you keep. On a free 30-minute call we look at your own situation and tell you plainly how strong your position would be, before you commit to anything.
Running a UK Ltd while you live and work abroad
The contested pointwhether business carried on from your home country gives that country a PE and a claim on the profits [2]
The company is British on paper and generally stays UK-resident [1]. But you do the work somewhere else, and that country may say the company has a taxable foothold there [2]. Then two countries are looking at the same profits, and treaty terms may matter [1].
Using an offshore company or trust to cut tax while you stay in the UK
The contested pointwhether the company is UK-resident because its real control is in the UK
The company sits abroad, but you don't. HMRC looks at who really exercises control, not where the board meets. If that's you in the UK, the company could be taxed as UK-resident, and your own residence is still decided by the SRT.
How do you actually take the money out?
How you're taxed on money you take out depends mainly on where you're personally resident. Your new country's rules usually apply, and some UK rules can still reach you, especially if you haven't really left.
A UK Ltd pays corporation tax first. For the financial year from 1 April 2026, that's 19% on profits up to £50,000 6, with marginal relief between £50,000 and £250,000 6 and 25% above £250,000 6. Those thresholds are divided by the number of associated companies 6.
After that, you can draw money out as dividends, salary or a director's loan. The UK generally doesn't withhold tax from ordinary company dividends 6. Your new country may still tax them. The treaty rate isn't set by where you live alone: your Tax residenceThe country that treats you as living there for tax purposes, and so can tax your worldwide income. Each country sets its own rules; your passport doesn't decide it., beneficial ownership, whether the dividend is taxed where you live and the treaty's conditions all matter 6.
How a salary or a director's loan is treated depends on your new country's rules and any treaty. Get that checked locally before you pick a mix.
UK Ltd, local company or free zone: what does it cost in tax, admin and risk?
The cheapest-looking structure on paper isn't always the cheapest once you add where you actually work. A UK Ltd run from your home abroad can still face local tax through a permanent establishment, and free-zone registration doesn't by itself fix that 2. So a UK Ltd, a local company and a UAE free-zone company each carry a different tax rate, admin load and risk.
Here are the three side by side. Rates are as of 2026; local company rates depend entirely on the country, so they're left for a local adviser to fill in.
| Structure | Where it's set up | Company tax (as of 2026) | Running cost | What it needs in practice | Who it can suit |
|---|---|---|---|---|---|
| UK Ltd run from abroad | UK | 19% to 25% from 1 April 2026 6 | Varies; get it in writing | UK filings, plus checking for a local PE (a taxable presence where you work) 2 | People whose top-level decisions can genuinely be shown to sit somewhere clear |
| Local company | Your new country | Set by that country | Set by that country | Local filings and accounts | People settled for the long term in one country |
| UAE free-zone company | UAE free zone | 9% generally; 0% only on Qualifying Income of a Qualifying Free Zone Person 3 | Varies | Real UAE substance: core work, assets, qualified full-time staff and spending in the free zone 4 | Businesses that genuinely operate in the UAE |
The headline 0% is the one people fall for. The sources couldn't confirm whether a solo consultant's fees count as Qualifying Income, so check it with a UAE adviser before you build a plan on it 4.
Does a visa mean you've left UK tax?
No. A foreign residence visa is an immigration status, and the Statutory Residence Test decides your UK tax residence, whatever your new country grants you.
The Statutory Residence Test (Statutory Residence Test (SRT)The UK's rulebook for deciding whether you're UK tax resident in a tax year, combining days spent in the UK with your 'ties' to the UK.) is HMRC's set of rules for deciding whether you count as UK resident in a tax year 8. It covers your personal residence only. Your company's residence and any PE are separate questions 8.
Why it matters: UK residents are taxed on worldwide income and gains from 6 April 2025. If you think you've left but the SRT says you haven't, your company dividends and other income can still be taxable in the UK.
HMRC also holds data from the CRS (Common Reporting Standard)The global system where banks report account holders' details and balances to their tax office, which passes them to the country where the holder is tax resident. (CRS), the system where banks report foreign accounts to tax offices. That's around 9 million accounts from 100+ jurisdictions, though HMRC says the data isn't proof tax is due. Whether tax is due depends on your residence, the type of income, reliefs and the year's rules.
Which structure suits which consultant?
The right structure depends on where you live and spend your time, where your clients are, how they pay you and how big your profits are. Here's how those facts tend to line up.
- Whether any of these suits you depends on your own facts, so take advice before acting.
- UK Ltd: may suit you if you can show clearly where the company's highest-level decisions are made, and you've checked PE risk where you live [7] [2]
- Local company: may suit you if you've genuinely moved, you're settled in one country and you've had the local rules checked
- UAE free zone: may suit you if the business really operates in the free zone, with staff, assets and spending there [4]
- UAE free zone: may not suit you if you're a solo consultant working from another country and counting on 0% [4] [2]
- Any offshore company: may not suit you if you're still UK resident and hoping the company's address changes that. We class that as an aggressive position
- Any structure: may not suit you if you haven't checked your SRT position yet
What should you check before you decide?
Before you pick, test both levels: the company (where it's run, where it has a taxable presence) and you (where you're resident, how your drawings are taxed). Five checks cover most of it.
- 1Your residenceRun the SRTwork out whether you're still UK resident for the tax year [8]
- 2Where decisions happenMap controlnote who makes the highest-level decisions and where, including any non-executive directors [7]
- 3Local presenceCheck PE riskask whether working from your new home creates a taxable presence there [2]
- 4Treaty positionCheck dividend treatmentresidence, beneficial ownership and treaty conditions all count [6]
- 5RecordsKeep evidenceboard minutes and records of where decisions were made, since CMC is "wholly a question of fact" [7]
Get local advice in your new country alongside UK advice. One side alone only tells you half the story.
FAQ
Is a UK Ltd still UK tax-resident if the director lives abroad? Generally yes. A UK-incorporated company is generally UK tax-resident, subject to exceptions and treaty rules 1. Your new country may also claim tax if business is carried on from there 2.
Does a foreign residence visa mean I've left UK tax? No. The visa is an immigration status, and the SRT decides your UK tax residence.
Is a UAE free-zone company always 0% tax? No. A 0% rate applies only to Qualifying Income of a Qualifying Free Zone Person that meets the substance and other statutory conditions. Other taxable income is taxed at 9%, and UAE corporate tax is 9% generally 3 4.
What UK dividend tax rates apply in 2026/27? After the £500 allowance: 10.75% basic, 35.75% higher and 39.35% additional rate 5.
Does the UK withhold tax on dividends paid to a non-resident director? Generally not on ordinary company dividends, but your own country may tax them and treaty rules can change the outcome 6.
Does running a UK Ltd from home abroad create a permanent establishment? It can, if business is carried on from where you live. PE is a separate question from where the company is resident 2 8.
The right structure depends on your own numbers. You can book a free call to have it mapped out.
