Risky Business: Can a director of a UK subsidiary be based outside of the UK?

June 25, 2025

Is there a requirement for a director of a company to be based in the UK?

If an individual does not live in the UK, can they still be a director of a UK company and what are the responsibilities in these cases? This is a question that often arises.

The UK Companies Act 2006 (CA 2006) provides the general eligibility requirements to becoming a director of a UK company. These requirements are that:

A company director needs to be at least 16 years of age
At least one director of the Company needs to be a natural person
They cannot be disqualified to be appointed as a company director.

There is no requirement for the director to be based in the UK, however, a UK subsidiary needs to have a UK registered office address (either in Scotland or in England and Wales depending on the jurisdiction of the specific company).

What are the general director duties of a company director in the UK? Is there personal liability attached to the role?

Even though there is no requirement to live in the UK, the company director not living in the UK does still have to follow the UK responsibilities of an appointed director.

Broad general duties have been codified in the CA 2006 and are based on a great amount of case law which specifies the requirements in different situations. The duties are owed to the company and breaches can lead to injunctions, damages and penalties personally to the directors.

Beside CA 2006, other rules and regulations specify personal liabilities for directors. In particular wrongful or fraudulent trading according to the Insolvency Act 1986, breaches of the Health and Safety at Work Act 1974, breaches of the Corporate Manslaughter and Corporate Homicide Act 2007 These breaches could lead to unlimited fines in case of gross negligence which leads to death and breaches of the Company Directors Disqualification Act 1986.This could lead to the disqualification from acting as a director of a company for a period of between two and 15 years.

How to reduce the risk of personal Liabilities with effective corporate governance?

To reduce the risk of personal liabilities materialising, general corporate governance structures should be put in place. A start is to review the articles of association, which are the constitution of the company and the key rules and regulations concerning the company and ensuring that the topics of these are covered by a responsible board member. To ensure a comprehensive and transparent structure, everybody in the company needs to be aware of their responsibilities and that tasks are delegated in a proper way, that decisions are made with all the necessary information and without conflicts of interest. A periodic evaluation of the work of the board of directors, helps effective oversight by the board.

Companies House is getting more powers

A new development is that Companies House, previously solely seen as a registry with no powers, is getting extensive powers to review and investigate the information it receives and which can lead to harsh fines which has not been the case so far. This is based on the necessity that the public needs to have reliable data at Companies House for their economic transactions and to avoid Money Laundering and Terrorist Financing. Specific periodical reviews and tasks help to be compliant with these requirements. These are annual confirmation statements based on up to dated statutory registers, filings of any changes of the company (e.g. directors, shareholders etc) within 14 days of the changes and preparing and approving annual accounts for each financial year and consequential filing with Companies House.

Once clear and transparent structures and aligned processes are in place, this should go some way to ensuring that reasonable steps are taken to reduce the likelihood of the materialisation of risks, including the risk of personal liability for a director.

If you are planning to employ a director outside of the UK, contact us to ensure for corporate governance is in order.

Christine Tretzmueller-Szauer

Legal Director, Corporate Governance

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This reflects the law and market position at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought in relation to a specific matter.

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