Many US companies seeking to expand into Europe will start with a presence in the UK due to the language and cultural connections, as well as the UK's legal framework and access to capital markets.\r
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For some companies, this will involve establishing a subsidiary company or a formal branch in the UK. For many companies, however, they may want to dip their toes into the market by hiring a local consultant or employee without establishing a local office or other physical presence. Often such employees/consultants will initially be carrying out promotional, marketing or sales activities. Sometimes however, the employee/consultant will be carrying out technical research or back office activities.\r
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This note looks at the potential tax implications arising from such informal arrangements; in particular, whether they can incur local tax liabilities or registration obligations. We consider the position in respect of US headquartered companies looking to expand into the UK.
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