Setup a branch in the UK
It is important to note that a branch in the UK is not a seperate legal entity. It is an extension of the parent company wherever they are located.
In terms of commercial credibility, it may be difficult to request for grants, loans and other such finances.
It is not unheard of for a UK company to decline doing business with a UK branch - simply because the UK branch has no legal presence as such in the UK.
Filing of accounts to UK Companies House
A UK branch operation must disclose the accounts of the overseas company to Companies House in the UK. Along with the balance sheet, the full profit and loss statements must also be published to Companies House. This means that any stakeholder related to the UK branch, can have access to this data - including potential customers and employees.
Where the accounts of the holding company are in a foreign language they must be translated. Overseas companies who are not required to file in the home territory may find this particularly unwelcome.
A branch in the UK does not require an audit.
A UK Branch may be able to offset some of its losses against profits from other territories (if applicable). Sometimes it is more advantageous to start with one structure and then to transfer the UK business to the other structure. For example, the starting up costs and initial trading losses of a branch may be deductible from taxable profits of the overseas company in its home country but this advantage will be lost when the UK branch becomes profitable in its own right.