Offshoring or offshore ownership???

[bigladsmith]

Quick question initially…….

A UK company established for 15 years (IT and software) with a turnover typically of £1M-£1.2M and a profit margin of around 35-45%.

All UBO’s and Shareholders are UK persons and UK tax resident.

How can this company be offshored or perhaps the ownership, shareholders and UBO taken out of the UK tax loop legally?

The employees/workers will remain UK based and in the UK tax system so that’s clear.

It’s the shareholding, directors and UBO I’m interested in.

As an example could this company have a holding company set up somewhere with reduced or zero taxes? BVI, Seychelles, UAE?

The director in this location could be a nominee and the shareholder a nominee?

What am I missing or not seeing here?

 

[Don]

Quick question initially…….

A UK company established for 15 years (IT and software) with a turnover typically of £1M-£1.2M and a profit margin of around 35-45%.

All UBO’s and Shareholders are UK persons and UK tax resident.

How can this company be offshored or perhaps the ownership, shareholders and UBO taken out of the UK tax loop legally?

The employees/workers will remain UK based and in the UK tax system so that’s clear.

It’s the shareholding, directors and UBO I’m interested in.

As an example could this company have a holding company set up somewhere with reduced or zero taxes? BVI, Seychelles, UAE?

You might be able to reduce tax if you move out of the UK.
Establishing a holding company alone would often not do much for you if you don't relocate (and get rid of UK tax residency).
You can consider relocating and then merging the UK company with a foreign company, keeping the UK operations under a UK branch office of the foreign company.
In this way, the branch would typically pay a 25% tax and no withholding tax on repatriating the profits abroad.
Depending on where you relocate, it could be free of further taxes.

The director in this location could be a nominee and the shareholder a nominee?

What am I missing or not seeing here?

• The UK's General Anti-Abuse Rule (GAAR) was introduced in 2013 to deter taxpayers from using tax avoidance schemes. The GAAR provides a statutory mechanism for HM Revenue & Customs (HMRC) to counteract tax avoidance arrangements which, although within the letter of the law, are not what was intended by parliament.
• Transfer pricing

 

[clemens]

Get some professional tax advise in the UK from people that know which country may suite best and where it may be possible to move the company to.

Most often countries in Europe won't give up that easy on companies moving out of their country, better prepare everything using an professional attorney and tax consultant.

 

[diro]

Depending on where you relocate, it could be free of further taxes.

where would you need to relocate to get free of taxes?

 

[Don]

where would you need to relocate to get free of taxes?

Your UK-based operations will be taxed in the UK.
But by relocating, you can avoid this income being taxed again on a personal level, resulting in an overall 25% tax (just the CIT in UK)

You can pick any jurisdiction that doesn't tax foreign profits on the corporate level and allows you to redistribute such profits to yourself tax-free or that doesn't tax such income on a personal level (e.g., territorial tax countries). Just to name a few, I know the best:

• Estonia (foreign branch profits exempt, and when redistributing those profits to shareholders, they would not be taxed on a personal level). Estonia-sourced profits are generally taxable only on the distribution of profits with 20%.
  • Easy to qualify as tax resident, doesn't require physical stay.
• UAE (participation exemption, no personal income tax). UAE-sourced profits are subject to 9% CIT.
  • It is harder to qualify as a tax resident in the UAE based on its domestic law. In practice 183 days will often be required to benefit from residence.
• Cyprus (foreign branch profits are exempt provided certain conditions are met. 12.5-15% CIT. On a personal level, 2.65% tax.
  • Requires at minimum 60 days' presence
  • as a non-domiciled tax resident you would pay 2.65% tax on foreign dividends.
• Georgia (could be structured as a treaty non-resident company). Foreign withholding tax can be credited against Georgian liability.
  • Residence requires 183 days presence (territorial tax system for individuals; foreign income is not taxed on a personal level)