Off Shore shareholding company

[javadude]

Hi,

Is that legal to get an off-shore shareholder for my private limited company?
Can the shareholder be the off-shore company itself instead of nominating someone from that company?
And to go straight to the point, can that be my own company oversea like in BVI. If so, would granting 80% to that company raise HRMC attention?
Bonus question: if it was legal, I would expect to see a lot of thread about this... which is not the case!

Thanks

These days it's irrelevant whether its legal or not. If HMRC don't like it then they'll just ask for whatever they think the tax would be before it gets anywhere near a court and if you don't pay they can just take the money from your bank account.

[northernladuk]

What ASB said.

The original poster only asked about overseas shareholding, not any potential mechanism for transferring profits. If the OP thinks that profit transfers a la Google, Starbucks, etc are available to contractors, s/he should also bear in mind that those companies pay hundreds of thousands of pounds to specialist tax accountants and lawyers to ensure the setup and the resulting paper trail match the intention.

Indeed, and I bet his radar is twitching when people say yes it's legal and can be done. I do think we should be very clear on its use to a single contractor setup and potential fall out.

[m0n1k3r]

Hi,

Is that legal to get an off-shore shareholder for my private limited company?
Can the shareholder be the off-shore company itself instead of nominating someone from that company?
And to go straight to the point, can that be my own company oversea like in BVI. If so, would granting 80% to that company raise HRMC attention?
Bonus question: if it was legal, I would expect to see a lot of thread about this... which is not the case!

Thanks

Technically, it is perfectly legal. Your UK company would pay CT as normal, and it would then pay dividends, if any, to the offshore company. If you instead had a UK holding company there would be no difference whatsoever - the dividends would just end up in the UK instead, and the holding company would still not pay any CT on the dividends received.

However if you then pay those dividends to yourself you would have to declare them regardless of whether they come from the UK or from abroad.

You might have to explain things a bit to the HMRC in the case they would get become interested, and if it turns out that you are in control of the foreign company they would probably ask that the foreign company pays CT in the UK on any interest income, capital gains (if it would invest the money) and normal trading income as it is in effect managed and controlled from the UK.

Reasons to still have a foreign holding company would be to keep it out of reach from the UK Government. Foreign company law might be more beneficial than the UK one.

I would stay away from BVI though - they nowadays have an information exchange agreement with the UK. The 'B' after all stands for 'British'.

[m0n1k3r]

The problem is keeping it out of UK net. In this case it would need declaring since the place of management of the BVI entity is the UK. And it's operation is here. And its beneficial owners. So, for HMRC it is UK residents and needs to file and is taxed accordingly.

True. The multinationals actually have staff based in those offshore locations to manage those businesses. One mid-size company I've worked with have more than 20 senior people there, performing everything from investing to accounting, intellectual property management, treasury, internal auditing and producing quarterly financial reports.

Edit: When they are not on the beach.

They also organise in-house conferences, management strategy retreats and what not. As I understood it, they kept quite busy.