Permanent Establishments in the United Kingdom after Brexit
Many companies have had to reconsider their operations after Brexit. That is why OBN& has decided to explain how Spanish companies can operate through permanent establishments in the United Kingdom.
This is one of the many ways the British Legal System puts to disposition to foreign operators. Therefore, it is advisable to consult a Corporate Law specialist before opening a branch, a subsidiary, a permanent establishment, etc. in the UK.
Permanent Establishments in the United Kingdom
The UK recognizes as a permanent establishment a location in which a foreign operator conducts part of its business. This generally relates to offices or branches but may also include laboratories, factories, workshops and other operating units.
The only exception is with logistic facilities, such as warehouses or delivery/distribution centers. Likewise, of course, a permanent establishment is not considered to be one that does not depend on the Spanish parent company.
¿How to establish a Permanent Establishments in the United Kingdom?
As to open a Permanent Establishment in the United Kingdom, the name and corporate form of our company should be informed, as well as its form of administration. This information should be recorded on form OS IN01 and be accompanied by a copy of the company’s memorandum of association or the last annual accounts submitted in the Register.
The name, address and nature of the Permanent Establishment should be also informed. The contact information of the authorized permanent representatives, the scope of their powers and the identification and location of other people authorized to deal with the UK Government, must be provided.
All this information is handled through Companies House, which will also be competent to process changes in the status of the permanent establishment or the parent company. For example, the appropriate accounting and tax documents should be sent to them.
Questions to consider when operating in the United Kingdom after Brexit
Although the implications of Brexit for companies are more far-reaching than what can be covered in this article, it is worth mentioning a few details. As the United Kingdom has left the European Union, EU regulations no longer apply to it (at least the internal ones). This implies the need to re-regulate tax relations, imports, contractual relations, etc.
Spain and the United Kingdom signed a bilateral agreement to avoid double taxation, and there are other similar rules that have minimized the impact of Brexit. However, it is more advisable than ever to have the counsel of a corporate lawyer when it comes to shielding operations in the United Kingdom.
The new legal relationships apply to issues as relevant as trademarks, patents, other Intellectual and Industrial Property rights, the tax regime for imports, consumer and user guarantees and data protection.
All in all, Spanish companies can operate in the United Kingdom through a permanent establishment with relative ease. However, the fact that the internal regulations of the UK are prone to the importation of business cannot make us lose sight of the fact that we are no longer under the same regulatory corpus. In addition, this can imply legal differences of great significance for the company.
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