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UK company 100% owned by SG LLP, taxes?

J

jrmarketing

BANNED MEMBER
Apr 6, 2020
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#1
Hey I live in Singapore and I have a Singapore LLP.
To get a payment processor for my omnline business I had to have a EU corporation becaquse they all didnt accept Singapore Business. (PayPal/Stripe/2CO etc didnt accept me or ban me)
Its in social media marketing niche (selling views etc)

Now I pay high fees with the processor that accepts me (around around 7,5% + 10% rolling reserve), plus of course I have some loss because of the currency conversions.


Its all quite new and I read that I dont have to pay taxes right. I mean I have UK Limited right now as an LLC 100% owned by the Singapore LLP.
Can somebody explain the tax siutation? Or is it better to get a UK LLP?

Thanks
 
#2
UK LLP in your case is a pass through entity. It means that all profit is taxed in the Jurisdiction of the partners. So when you pay yourself you pay tax in Singapore at whatever rate.
 
#5
It means that if everything is done from Singapore, probably the UK Ltd. doesn’t pay any taxes in the UK, but instead will be taxed as if you had a SG Ltd.
That is, if somebody looks into it.

Try something like this:
Set up a company in a tax-favorable jurisdiction that has access to the payment providers that you need. Maybe Cyprus, Malta, UAE, Georgia, Malaysia, whatever. Rent a small office, maybe hire a part time employee. Ideally you’d travel there a few times per year and ideally there wouldn’t be withholding tax on dividends - so Cyprus would probably be a good option.
Then you explain to the SG tax authorities that your company is actually run from that country and not from SG. Then you would be able to receive dividends from that business completely tax free in SG, provided that you keep the money overseas and don’t transfer it into a SG bank account. At least that’s the theory, I don’t have any practical experience with this.

It could also work with your UK Ltd., but the SG tax authorities probably won’t believe you if you can’t show that there is an office and an employee etc.
 
#6
JustAnotherNomad said:
It means that if everything is done from Singapore, probably the UK Ltd. doesn’t pay any taxes in the UK, but instead will be taxed as if you had a SG Ltd.
That is, if somebody looks into it.

Try something like this:
Set up a company in a tax-favorable jurisdiction that has access to the payment providers that you need. Maybe Cyprus, Malta, UAE, Georgia, Malaysia, whatever. Rent a small office, maybe hire a part time employee. Ideally you’d travel there a few times per year and ideally there wouldn’t be withholding tax on dividends - so Cyprus would probably be a good option.
Then you explain to the SG tax authorities that your company is actually run from that country and not from SG. Then you would be able to receive dividends from that business completely tax free in SG, provided that you keep the money overseas and don’t transfer it into a SG bank account. At least that’s the theory, I don’t have any practical experience with this.

It could also work with your UK Ltd., but the SG tax authorities probably won’t believe you if you can’t show that there is an office and an employee etc.
Click to expand...
That's correct. You can replicate the same thing with a UK office and have a MD on 500 per month. Website email address and office space (flexi desk). Total cost about 700 per month.
 
#10
Dandyline said:
And no corporate tax in UK for the Ltd?
Click to expand...

LLP not limited.

Dandyline said:
i read that you can have holding in UAE and LTD as sub and move all money weekly from LTD to UAE weekly without paying taxes in UK.
Click to expand...

Not LTD company you mean LLP. LTD in UK is a tax resident by it's own right. There are ways to mitigate that but in the long run it wont work.
 
#12
JustAnotherNomad said:
But how would it work with an LLP? If he’s a partner, the income would be taxed in Singapore...? Or would the SG tax authorities accept it as a foreign PE if he has substance...?
Click to expand...
Correct he has to build substance into the structure by also pay comms to contract, direct referals or introduces through the llp
 
#14
Maybe there’s something I’m missing, but why is substance relevant for an LLP? Isn’t it always taxed on the partner level?
But if there is substance, then maybe the partner would have a PE, so everything happening in the UK would be taxable as a PE...?
 
#17
JustAnotherNomad said:
Maybe there’s something I’m missing, but why is substance relevant for an LLP? Isn’t it always taxed on the partner level?
But if there is substance, then maybe the partner would have a PE, so everything happening in the UK would be taxable as a PE...?
Click to expand...
In some cases, for example if Singapore doesn't tax you on foreign sourced income from the UK llp. Then building substance in the UK could make the income not taxable in Singapore but would be taxable in the UK.
 
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