In Germany this was common before they introduced the 'UG' which is a GmbH (limited liability company) w/o the 25000 Euro investment requirement. I know a few people who did found in the UK, it works and isn't particularly hard either (and there are companies which do the paperwork for you for relatively little money).

Now you can start a UG with a 1,- Euro investment (more like 500 Euro min because it still has to cover setup fees). Which I think has made the UK thing superfluous, just complicates things even more.

I did that from Italy, wouldn't do it now because of the uncertainty related to brexit. We'll see in the near future.

Don't you need to have physical presence in the UK to open a company?

You just need a postbox/business-address which is usually hosted by the service provider you use to do the UK registration and all that.

Note that a Limited doesn't free you from having to deal with the local authorities (Gewerbeamt in Germany, tax office, etc).