Left UK, now Looking for Ideal Jurisdiction to Incorporate Consulting Company

Now you've gone and done it! My dad was actually raised in Guernsey and my wife fell in love with it when i took for her for our honeymoon - it seemed quite opaque a system to get your head around, but I was confusing this maybe with residency requirements.

Checking now it's 0% tax on foreign sourced income, but I'm seeing a lot of chatter about how economic substance requirements, which consulting would absolutely fall within:

a. Substance Requirements​

• Guernsey has implemented economic substance requirements to comply with international tax standards (e.g., OECD and EU rules).
• If your Guernsey company is considered a relevant entity (e.g., it conducts certain types of business activities), it must demonstrate economic substance in Guernsey. This may involve:
  
  • Having a physical office.
  • Employing staff in Guernsey.
  • Conducting management and control activities in Guernsey.
• If your company does not meet these requirements, it could face penalties or be deemed non-compliant.

Do you have any experience with this? And how practically it's enforced?

But this could definitely be a contender for not going back to england long term! Won't tell my wife as it would become a certainty!!

GPT said:

Specifically for the UK, Cyprus isn’t the worst solution. It pretty much depends on the numbers..

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Ah the 2012 Bail In permanently crossed Cyprus off my list - sure it wouldn't happen again (and you'd want to not hold money in the country) but it sets precedent

Wow

GPT said:

I lived in Cyprus in 2012 and that bail-in indeed caused issues, BUT keep one thing in mind; having a company there is one thing. It doesnt mean that you have to bank there. All companies that had non-cyprus banks were not affected. It's in that sense always better to never bet on one horse

Re substance and presence; just keep in mind that those requirements are everywhere and if they are not yet enforced that will change over the next couple of years.

Pick a place where you would be able to fulfil the substance / presence requirements yourself. Especially if your numbers are not high enough.

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very good point - when you start to look into moving abroad and optimising strategies, you often do an all or nothing approach, whereas both the US suggestion and Cyprus show that you can potentially pick what works.

I guess i need to do a lot more research as I was only starting to get my head around personal taxation, now companies add all sorts of nuance!

My only concern is whether another country would allow a bank account for a foreign company without a presence in that country too... which again starts to get very complex

Other option, like i said is to just ensure that the Cypriot account pays out dividends rather swiftly. Kind of in the same way one uses a crypto exchange intermittently, and in full knowledge it might blow up tomorrow!