Yes if a Ltd, and then you have to pay UK corporate tax on this amount (25/19%).If you live in a country that has no tax treaty with the US, is it possible to form a company in the UK and receive tax free royalties there despite residing in a country that has no tax treaty with the US?
Yes, they always exist. You just need to look out for them. I think Cyprus or Georgia should work quite well. There was a couple that was living tax-free on the girl's $3M royalties in Georgia:There are some schemes where you can pay literally no tax legally.
The reason why I asked this, I read somewhere on this forum that if you do a US LLC, they'd still withhold 30 percent as a non resident. Why would a UK LTD as a non resident bypass the withhold tax?Yes if a Ltd, and then you have to pay UK corporate tax on this amount (25/19%).
Thanks for the info, but it has to be the UK for a specific reason.There are some good reads here
Yes, they always exist. You just need to look out for them. I think Cyprus or Georgia should work quite well. There was a couple that was living tax-free on the girl's $3M royalties in Georgia:There are some schemes where you can pay literally no tax legally.
No any taxes paid, but they did not like the ploitical vibes. (They could just have gone to the country side or taken the expres bus to Armenia over the weekend.Good day Gentleman.
After wrestling with a UAE freezone/US LLC setup that turned into a compliance and AML audit nightmare (9% UAE tax, anyone?), and after spending some time in Georgia before realizing the political vibes weren’t for us (Hello Putin...), we’ve finally think we have found our sweet spot in Mauritius.
Why Mauritius?
Two words: tax perks and lifestyle.
It's by far the best run island I've ever been to - seems to have the chilled beach life when you want it, futuristic infrastructure in the built up areas as well as some high-end, modern villas with epic...
- Leo Vanguard
- Replies: 48
- Forum: Offshore Company
You can either setup a company in Georgia and then pay out the profits to you as active income (if your country does not tax them) or you move to Georgia.
is it possible to form a company in the UK and receive tax free royalties there despite residing in a country that has no tax treaty with the US?
it has to be the UK for a specific reason.
Thanks for the link, I wasn't aware of tax treaties have these kind of limitations. Good to learn!Impossible bcecause of art23 in the UK-US double tax treaty.
If I understood it correctly, withholding tax depends upon where the UBO is resident and not the company? "The provisions of paragraph 1 of this Article shall not apply if thebeneficial owner of the royalties, being a resident of a Contracting State, carries onbusiness in the other Contracting State, in which the royalties arise, through apermanent establishment situated therein, and the royalties are attributable to suchpermanent establishment. In such case, the provisions of Article 7 (Business Profits)of this Convention shall apply"Impossible bcecause of art23 in the UK-US double tax treaty.
Will this depend upon where the UBO is resident?You can either setup a company in Georgia and then pay out the profits to you as active income
What is the withholding tax for it in Georgia? And HNWI tax residency works for that option?Georgia.
Another option would be to set up a US corporation and then get the money out from the US corporation in some other way.
It's 0 for all cis countriesWhat is the withholding tax for it in Georgia? And HNWI tax residency works for that option?
Will this depend upon where the UBO is resident?
No. You just need a company there and then pay out the profits to you. Beware that there are profit taxes. If you move there as per the linked articles, you can get the royalties personally tax-free.Will this depend upon where the UBO is resident?
1. Set up an entity in Georgia or Kyrgyzstan – Both benefit from the old CIS double tax treaty, which has no LOB clause. Georgia is the better choice. There’s a solid CSP in this forum I’ve worked with. You’ll need minimal substance—1-2 local employees. Given your revenue, you or your wife will likely want an assistant and an accountant anyway, so just hire them there. Georgian companies are called LLCs, so you can be creative with how you present the entity in your invoices, if you know what I mean.
2A. Georgia’s Free-Zone Tech Exemption – You can apply for a reduced 5% CIT, but this requires hiring software developers, which may not be ideal if you're not in that industry. If that works, a single Georgian entity is enough.
2B. IP Structuring Alternative – If you don’t want to hire developers, hold the IP in an offshore TopCo in a jurisdiction with a DTT with Georgia --but not a GBC Mauritius company with the tax holiday exemption as some people said here, as there's no DTT, so withholding applies. Instead, structure the Georgian entity as an agent with sublicensing rights, allowing you to pass through any profits as IP income to the TopCo—minus a small amount taxed in Georgia. Good TopCo locations with strong DTTs with Georgia include: UAE (DIFC PresCo recommended, as royalties are tax-exempt), Cyprus (your IP may not qualify for the IP box, in which case it’s subject to 12.5% CIT), Malta (10% effective tax due to refunds, plus a nice place to visit). All these options require local directors and board meetings... to ensure economic substance is met, adding a minimum of €20-25K/year in costs if done properly. But if your revenue is as high as you mentioned, that’s a rounding error.
If I understood it correctly, withholding tax depends upon where the UBO is resident and not the company?
Georgia is the way to go.
I wouldn’t keep the banks in Georgia; instead, I’d use a private bank—definitely not Wise eitherGeorgia is surely an option but banking will be problematic, especially when you receive USD.
Do you mean that if the UK company doesn't claim treaty benefits then it doesn't have to pay UK corporate tax on the income? Or would have to pay both 30% royalties and 25% UK tax?
Or would have to pay both 30% royalties and 25% UK tax?
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