USA vs UK Company Formation: Key Differences You Should Know

When choosing where to form your business, two of the most popular jurisdictions are the United States and the United Kingdom. Both offer strong legal systems, credibility with global customers, and access to international financial tools like Stripe and PayPal.

But while the two countries share many benefits, they differ in important ways—from registration processes and costs to tax structures and legal obligations. At iFiler, we’ve helped countless entrepreneurs from around the world successfully form and manage companies in both regions.

This guide breaks down the key differences between forming a company in the USA and the UK so you can make an informed decision based on your goals, industry, and customer base.

1. Legal Entity Types and Structures

In the USA, entrepreneurs most commonly register as either a Limited Liability Company (LLC) or a Corporation (C-Corp or S-Corp). LLCs are ideal for flexible ownership and simpler tax reporting, while C-Corps are typically favored by startups seeking outside investment. S-Corps are a special tax designation available only to U.S. residents.

In the UK, the most popular structure is the Private Limited Company (Ltd). This structure provides liability protection for shareholders, has a clearly defined management setup, and is widely accepted for e-commerce, consulting, and service-based businesses.

Both structures—LLC in the U.S. and Ltd in the UK—offer limited liability, meaning your personal assets are protected if the business incurs debts or lawsuits.

2. Formation Process

Forming a company in the United States involves several steps that vary by state. First, you choose a state like Wyoming, Delaware, or Texas. Then, you must check your business name availability, appoint a registered agent with a physical address in the state, and file the Articles of Organization (for an LLC) or Articles of Incorporation (for a Corporation). An EIN (Employer Identification Number) from the IRS is also required to open bank accounts and file taxes. Some states issue approvals within one day, while others may take up to two weeks.

In contrast, the United Kingdom has a fast, centralized process through Companies House. Once you select a unique business name, appoint a director, and choose a registered UK office address, you can submit your application online. If everything is correct, you’ll usually receive your Certificate of Incorporation within a few hours. Even non-UK residents can complete the entire process remotely.

iFiler supports full formation in both countries, whether you’re a resident or a foreign founder.

3. Formation Costs

The cost of forming a business in the USA depends on the state. Some states charge as little as $50, while others may exceed $300. You’ll also need to pay for a registered agent (typically $50–$150 per year) and may want help applying for an EIN, especially if you’re a non-U.S. resident.

In the UK, the cost of registering with Companies House is very low—just £12 if done online. While optional services like a registered office or nominee director may increase costs, the overall setup is usually more affordable compared to the U.S.

At iFiler, our formation packages are designed to keep your startup costs minimal while providing maximum value.

4. Taxation

One of the most significant differences between the two countries is how businesses are taxed.

In the USA, LLCs have the option to be taxed as sole proprietorships, partnerships, or corporations. This flexibility allows business owners to optimize their tax strategy. C-Corps are taxed separately from their owners and pay a federal corporate tax rate of 21%, plus potential state taxes. Some states also impose an annual franchise tax, regardless of income.

The UK operates on a flat corporation tax rate—currently 25% on profits. Directors and shareholders may also need to file personal tax returns through HMRC’s self-assessment system. Businesses must register for VAT (Value Added Tax) if their revenue crosses the threshold, currently £90,000 annually.

iFiler can assist you in registering for the correct tax IDs—whether it’s an EIN in the U.S. or Corporation Tax and VAT registration in the UK.

5. Banking and Payment Setup

Opening a business bank account is critical for managing funds and accepting payments. In the USA, online banks like Mercury, Wise, Bluevine, Payoneer, and Relay offer fast onboarding, especially when paired with an EIN. Most payment gateways—including Stripe and PayPal—require a U.S. business bank account.

In the UK, digital banks such as Tide, Revolut, Wise, and Monzo make it easy to open a business account remotely. Stripe, PayPal, and other payment providers readily support UK-registered businesses.

iFiler helps clients open business accounts in both regions, even without visiting the country.

6. Ongoing Compliance and Reporting

Once your company is formed, you’ll need to keep it in good standing with ongoing reports and filings.

In the USA, most states require an annual report and charge a small maintenance fee. LLCs and Corporations must file tax returns each year, and depending on the state, you may need to pay a franchise tax. A registered agent must be maintained at all times.

In the UK, you’ll need to submit an annual confirmation statement, file company accounts, and pay corporation tax on time. Even if your company makes no revenue, filings are still mandatory. You must also keep a UK-registered office address active.

To make this easier, iFiler offers affordable compliance packages that handle your reminders, filings, and official updates automatically.

7. Privacy and Public Disclosure

Privacy is an area where the two systems differ.

Certain U.S. states like Delaware, Wyoming, and New Mexico offer business owners more privacy by not requiring public disclosure of owners or managers. Other states publish company information, including the name and address of the registered agent, on their Secretary of State websites.

In the UK, transparency is mandatory. Directors’ names, shareholding information, and even office addresses are published in the public Companies House database. However, privacy can still be maintained using nominee services or virtual office addresses—services iFiler provides.

Which Country Should You Choose for Your Business?

Choose the USA if:

• You’re targeting U.S. customers or marketplaces like Amazon.com

• You want access to U.S. financial tools like Stripe US or Payoneer

• You need flexibility in tax structure or want to raise venture capital

• Privacy is a priority, and you prefer states that don’t require public ownership records

Choose the UK if:

• You want fast and inexpensive setup

• You’re planning to trade in the UK or EU

• You prefer a simplified tax structure with a flat rate

• You need an entity accepted across Europe and Commonwealth countries

Both jurisdictions are internationally respected and offer their own advantages. The right choice depends on your goals, market, and financial strategy.

How iFiler Can Help

Whether you’re setting up in the USA or UK, iFiler provides everything you need:

• Company Formation for LLCs or Ltds

• EIN or VAT Registration

• Registered Agent or Office Address

• Business Bank Account Setup

• Stripe, PayPal, Amazon Compliance

• Annual Compliance Management

We make business formation fast, reliable, and fully remote—even for non-residents.

Ready to Start?

🌐 Start forming your USA or UK company now at iFiler.us or iFiler.uk
📩 Need guidance? Contact our team for a free consultation.
🚀 With iFiler, launching globally has never been simpler.