Where to start? UK Citizen taking online business offshore...

[InnocuousNomad]

Hey guys!

Joined the forum recently as been getting into this offshore stuff and wanting to become a nomad etc. Really liked what I've been reading here but with so many options I'm not sure where is best to start, so looking for some ideas from you folks. Let me explain my situation...

Basically, I'm a UK resident since birth and running an online business (mostly ecommerce dropshipping, amazon FBA, affiliate marketing, and some of my own digital products). I've not been too happy with the UK over the last few years and I've just finally snapped, decided I no longer want to pay into the tax system here. Since my business exists purely online and requires no physical brick & mortar presence (I run everything from home) then I think it's time to go offshore. Eventually I would like to live somewhere else as well, so I've decided this will be a 2 step process of BUSINESS first, then PERSONAL.

Step 1 Business - I want to set up an offshore company somewhere that ideally has 0% corporation tax. Privacy would be high on my wishlist but not so much to hide from any authorities, it's more for personal protection, competitors, enemies, etc. My business receives a lot of money through PayPal, so would need a company and bank account that PayPal are going to be happy with. I don't accept credit cards so merchant account not neccessary, but I do accept Cryptocurrency payments as well. Obviously things like affilaite marketing and amazing just need to dump into a bank account.

Places I've considered from what I've researched so far - BVI, Panama, Nevis, Cayman Islands (might be too expensive for starting out), Georgia, Gibralter. I don't have any issue with setting up a structure of one company owning another, so just trying to workout whats best if thats even necessary.

Step 2 Personal - I'll be staying in the UK for the next couple of years or until I can get a 2nd residency/passport somewhere. If my company is paying 0% tax offshore, then I understand I'll be paying a small amount of personal income tax until I physically leave the UK. My dream destination to live out the rest of my life would be Cayman Islands, but that might be slightly too expensive right now so probably more of a long term goal for 5-10 years time. Although I do know of couples and families living out there on the equivalant to an average UK salary, but I'd rather not be too stretched. But ultimately I want to live somewhere with low personal income tax. Lower the better.

So other destinations to live in the mean time are to be considered. Ideally somewhere with good weather, good internet services, English speaking, and low or 0% tax. English speaking is a top priority as I don't want to live somewhere where there's a language barrier. I'm not opposed to living on the other side of the world, no need for me to be near the UK or Europe.

What do you guys think? Throw me some ideas, criticism, stuff to research? Really appreciate what a great resource this forum is!

 

[anotherone]

I am going to ruin your dreams.

1. If you want to use paypal, paypal as a merchant will not work in a offshore jurisdiction. You must incorporate a Cyprus company for this. I don't know for Georgia and Paypal. But i know that paypal fully support cyprus.

2. I would suggest staying in the SEPA zone, to keep hold of your money first. Many british people move to Bulgaria where they pay 10% income tax.

Consumer prices in George Town, Cayman islands are more expensive than in Bristol.
Property Prices Comparison Between Bristol, United Kingdom And George Town, Cayman Islands

 

[InnocuousNomad]

1. If you want to use paypal, paypal as a merchant will not work in a offshore jurisdiction. You must incorporate a Cyprus company for this. I don't know for Georgia and Paypal. But i know that paypal fully support cyprus.

What about connecting PayPal with Payoneer? Something that recently came to mind.

Or, what about an offshore company owning a Cyprus company?

Consumer prices in George Town, Cayman islands are more expensive than in Bristol.
Property Prices Comparison Between Bristol, United Kingdom And George Town, Cayman Islands

Thanks I'll have a read of this, I know Cayman is higher living expenses but one thing I will say is that Bristol is a total sh!thole. Literally. There are far better places in the UK.

 

[InnocuousNomad]

Also regarding PayPal, I've just been looking at their list of supported countries: PayPal Global - All countries and markets - PayPal

Notable mentions include:

• Montenegro
• Seychelles
• BVI
• Cayman Islands
• Panama
• Saint Kitts and Nevis
• Gibralter

 

[anotherone]

What about connecting PayPal with Payoneer? Something that recently came to mind.

Or, what about an offshore company owning a Cyprus company?



Thanks I'll have a read of this, I know Cayman is higher living expenses but one thing I will say is that Bristol is a total sh!thole. Literally. There are far better places in the UK.

Ohhh sorry, but Paypal blocked payoneer accounts 6 or 7 years ago I don't remember.

Paypal supports the countries you mentioned but they don't support a merchant account from those countries. You can spend money but you can't get money.

No offense, but I tried this a long time ago. I have set up a Paypal account in Belize, I could not connect a bank account to it. If I remember well maybe I could connect a USD bank account from the US.

 

[InnocuousNomad]

Ohhh sorry, but Paypal blocked payoneer accounts 6 or 7 years ago I don't remember.

Paypal supports the countries you mentioned but they don't support a merchant account from those countries. You can spend money but you can't get money.

No offense, but I tried this a long time ago. I have set up a Paypal account in Belize, I could not connect a bank account to it. If I remember well maybe I could connect a USD bank account from the US.

Ok well I see people on Google an YT connecting Payoneer accounts with PayPal that's all. Not from 7 years ago but recently.

I currently have PayPal set up with Revolut which works very well, but I don't think Revolut are in a lot of countries yet.

 

[anotherone]

Ok well I see people on Google an YT connecting Payoneer accounts with PayPal that's all. Not from 7 years ago but recently.

I currently have PayPal set up with Revolut which works very well, but I don't think Revolut are in a lot of countries yet.

1. You can quickly open a payoneer account now, get the GBP bank details, add it your Paypal account, and let us know here if it works.
In paypal, go to account settings > money banks and cards > Link a new bank.
and then, please tell use here if it works.

 

[InnocuousNomad]

Why was my reply here from earlier deleted?

While Payoneer didn’t work (PayPal recognised the bank account but just gave an error), I did have success adding TransferWise.

 

[King1453]

aside from his Paypal issue .

How will he create this company aboard without causing problems in the UK? e.g avoidance of tax from HMRC

i am interested in the same outcome and in the same BOAT

 

[InnocuousNomad]

aside from his Paypal issue .

How will he create this company aboard without causing problems in the UK? e.g avoidance of tax from HMRC

i am interested in the same outcome and in the same BOAT

I will still pay personal income tax while I’m a UK resident, but the business being registered and operating in another country has nothing to with with the UK HMRC and will not pay UK corporation tax.

Unless I’m missing something here, but thats generally how it works?

 

[King1453]

lets you have 100k income at some point wont HMRC question source of income ?

I completely agree with the PT side this has nothing to do with company taxation .

Newbie here so very interested in the answers.

How are you looking to structure it ?

Company in X country --- > Pays 0 tax ---- > Pays you has a employee --> You pay 20% + tax to HMRC ?

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I had amidea not sure this would be good ?

Online Income from Amazon FBA etc gets deposited in a offshore company then your offshore company hires you has a consultant from a freelance website like upwork ---> pays you via this platform(you would lose a bit in feeS) . You report this has 'freelance work' pay personal tax ?

Again i am new to offshore world so dont know

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[JustAnotherNomad]

You are missing pretty much everything, yes.

If you run your business from the UK, it will be regarded a UK business due to its effective place of management/permanent establishment. Because the business will not be “operating in another country,” just because you incorporate it there. You would need economic substance.
Where your customers are located or whether it’s an “online” or “brick and mortar” business is completely irrelevant if you run the business from the UK.
You’ll want to read up on “permanent establishment,” “effective place of management” and “economic substance.”

You’ll have to physically move your butt to a different country or build economic substance, which would be very expensive.

The only alternative would be to try to hide the fact that you own the business. The risk of getting caught is extremely high though. So don’t do it. If they find out, you’ll go to jail. And hiring yourself would be about the dumbest thing you could do.

 

[InnocuousNomad]

lets you have 100k income at some point wont HMRC question source of income ?

I completely agree with the PT side this has nothing to do with company taxation .

Newbie here so very interested in the answers.

How are you looking to structure it ?

Company in X country --- > Pays 0 tax ---- > Pays you has a employee --> You pay 20% + tax to HMRC ?

That's basically it yeah. I wouldn't pay myself 100k per year though, just leave those profits in the business. I could probably survive for the next year or two on about 25,000 per year (house paid, car paid, no debts), and with personal tax allowance at 12,500 I'd only be paying 20% on the remaining 12,500 so personal income tax would be 2,500. There's probably further tax savings to be made by using dividends etc, but I'd have to look into it.

Do it this way for a couple of years while I line up some ducks and then get my backside outta the UK completely.

 

[King1453]

You are missing pretty much everything, yes.

If you run your business from the UK, it will be regarded a UK business due to its effective place of management/permanent establishment. Because the business will not be “operating in another country,” just because you incorporate it there. You would need economic substance.
Where your customers are located or whether it’s an “online” or “brick and mortar” business is completely irrelevant if you run the business from the UK.
You’ll want to read up on “permanent establishment,” “effective place of management” and “economic substance.”

You’ll have to physically move your butt to a different country or build economic substance, which would be very expensive.

The only alternative would be to try to hide the fact that you own the business. The risk of getting caught is extremely high though. So don’t do it. If they find out, you’ll go to jail. And hiring yourself would be about the dumbest thing you could do.

This pretty much confirms what i have figured out its near impossible to do on a simplifed way. Although hiring yourself part i would do on a "fake account (s)" and probably paid to EMI then use prepaid cards etc that was just a thin air thought process

 

[King1453]

That's basically it yeah. I wouldn't pay myself 100k per year though, just leave those profits in the business. I could probably survive for the next year or two on about 25,000 per year (house paid, car paid, no debts), and with personal tax allowance at 12,500 I'd only be paying 20% on the remaining 12,500 so personal income tax would be 2,500. There's probably further tax savings to be made by using dividends etc, but I'd have to look into it.

Do it this way for a couple of years while I line up some ducks and then get my backside outta the UK completely.

From what @JustAnotherNomad has said this isn't possible unless you can resolve the issue highlighted.

 

[InnocuousNomad]

This pretty much confirms what i have figured out its near impossible to do on a simplifed way. Although hiring yourself part i would do on a "fake account (s)" and probably paid to EMI then use prepaid cards etc that was just a thin air thought process

From what @JustAnotherNomad has said this isn't possible unless you can resolve the issue highlighted.

Nahh mate there is some factually incorrect information here, and a lot of this "economic substance" stuff only applies in some British Overseas Territories, and to certain industries. Even then there are ways around it. But you can still own a company offshore somewhere else, and then maybe structure things in a certain way. Gotta be careful with public forums because you will get a lot of misleading advice, so I've joined the Mentor Group on here and also taking on someone to consult on all of this.

But no I would not want to be using fake accounts either, I'm looking to do everything legit for long term stability.

Not going to post anything further in this topic but good luck to and hope you find something that works for you.

 

[JustAnotherNomad]

Hmmmm, isn’t it strange that you don’t want to elaborate how it’s possible? That you refer to the Mentor Gold forum? ;-)
If it was legally possible, why wouldn’t you want to discuss it here in public?

Simple common sense should tell everyone you can’t just avoid UK taxes by incorporating somewhere else. Otherwise nobody would be paying their taxes. Sure it’s possible to lower the taxes legally, but it will be expensive.
And no, economic substance is what the UK will ask for. Certain “tax havens” have simply been forced to help high-tax countries with enforcement.
But if you register a company in, say, Bulgaria, HMRC will/can ask for proof that the company is actually operating in Bulgaria and that it’s not just a virtual office with all work being done in the UK.
But I agree that one shouldn’t simply believe advice from random people on the internet. Go talk to a tax lawyer or accountant in the UK. They will tell you the same thing.
There are no cheap legal solutions if the work is done in a high tax country like the UK. All cheap solutions will involve trying to hide where the operations take place or who is behind the company.
The only proper cheap solution is relocating.
Other legal solutions will be expensive.

 

[InnocuousNomad]

Hmmmm, isn’t it strange that you don’t want to elaborate how it’s possible? That you refer to the Mentor Gold forum? ;-)
If it was legally possible, why wouldn’t you want to discuss it here in public?

Because firstly I don't wish to discuss my affairs publicly - like how I don't post up conversations with my lawyer or accountant, and secondly I just paid 95 euros per month to be in the private forum. I'm not going to copy and paste information from there to here just for your benefit. You can pay for it like I and other people have.

Regardless, thanks for your input.

 

[yngmind]

Move to UAE, great country, no taxes

Dubai is the nice city, visit it once borders will be opened, you wont regret

 

[JustAnotherNomad]

Because firstly I don't wish to discuss my affairs publicly - like how I don't post up conversations with my lawyer or accountant, and secondly I just paid 95 euros per month to be in the private forum. I'm not going to copy and paste information from there to here just for your benefit. You can pay for it like I and other people have.

Regardless, thanks for your input.

So you did verify that input with your accountant and he confirmed the information was correct? Or did you just believe one of the “consultants”?

I’m perfectly happy with my own setup, thank you, but sometimes I’m really tempted to get the Gold membership, just to see what’s discussed there. ;-)