Setting Up LTD In Tax Haven (lichtenstein)

[DeludedAussie]

If you could get your agency to pay Has anyone thought carefully about opening a LTD abroad and billing agents through the company?

I had someone mention this over a beer the other day as being a possibility -

Has that been discussed on the board before

[HairyArsedBloke]

Eveyone does this. Don't you?

Only a mug would have a UK company. If an agent says they will not pay a non-UK one then they are lying.

[DeludedAussie]

Eveyone does this. Don't you?

Only a mug would have a UK company. If an agent says they will not pay a non-UK one then they are lying.

You are in the wrong forum - Go and play in General please - Ok? Good boy.

[Brussels Slumdog]

Offshore LTD Companies

If you could get your agency to pay Has anyone thought carefully about opening a LTD abroad and billing agents through the company?

I had someone mention this over a beer the other day as being a possibility -

Has that been discussed on the board before

UK Agencies dont normally accept Offshore companies like
the Channel Islands. I dont think that opening up a Lichtenstein LTD company without being a local resident is that easy or cheap.
Opening a LTD company in an East European country could be a possibility but dont expect much advice from this site.

[malvolio]

Won't help anyway. It's where you get paid, not where YourCo gets paid that makes the difference.

[DeludedAussie]

Won't help anyway. It's where you get paid, not where YourCo gets paid that makes the difference.

Eh? Corporation tax would not be payable. Thats 21% saved staright away.

[doodab]

Eh? Corporation tax would not be payable. Thats 21% saved staright away.

Well, if you were in the UK and running the company that would likely count as a "permanent establishment" which would mean that the proportion of the companies profit due to those activities was taxable in the UK. Failing that, you would probably have to pay Luxembourg corporation tax. There is also a withholding tax on dividends, I think this is 20% but not 100% sure.

The "low-tax" Luxembourg companies are special corporate forms designed for asset management / investment / holding companies. They aren't regular companies that can "do stuff", they are quite limited in what they can be used for.

Edit: Oh yes, Lichtenstein. Your company would pay corporation tax there which I think runs to about 15% + a surcharge of up to 5% if your dividend is > than a certain percentage of your taxable capital, so basically 20% plus a tax on the net worth of the company. There is also a 4% withholding tax on dividends, and as there is no tax treaty with them you would I expect be liable for UK tax on the money with no double taxation relief.

It's quite possible to use a non-UK company though.

[DeludedAussie]

Well, if you were in the UK and running the company that would likely count as a "permanent establishment" which would mean that the proportion of the companies profit due to those activities was taxable in the UK. Failing that, you would probably have to pay Luxembourg corporation tax. There is also a withholding tax on dividends, I think this is 20% but not 100% sure.

The "low-tax" Luxembourg companies are special corporate forms designed for asset management / investment / holding companies. They aren't regular companies that can "do stuff", they are quite limited in what they can be used for.

Edit: Oh yes, Lichtenstein. Your company would pay corporation tax there which I think runs to about 15% + a surcharge of up to 5% if your dividend is > than a certain percentage of your taxable capital, so basically 20% plus a tax on the net worth of the company. There is also a 4% withholding tax on dividends, and as there is no tax treaty with them you would I expect be liable for UK tax on the money with no double taxation relief.

It's quite possible to use a non-UK company though.

Thanks - Top post and very insightful

If people come back and visit this post in the future do you know which country (if any) you could set up a LTD in and reduce your tax bill - Corporation tax is key for me but I d be interested in any other ideas

[cssmonauts]

Thanks - Top post and very insightful

If people come back and visit this post in the future do you know which country (if any) you could set up a LTD in and reduce your tax bill - Corporation tax is key for me but I d be interested in any other ideas

There's no corporation tax in Isle of Man since 2006 (unless you're a bank or reciving income from land or property)
IOM Government Tax Website

[BlasterBates]

It doesn't matter where your company is based eg Luxembourg, Switzerland, if you do work in the UK, HMRC expect you to register a branch and you do all your business through the branch. There is no difference between that and a Ltd. Some contractors have unwittingly worked through their UK Ltd in other countries and thought they only paid UK tax, but clobbered with double tax and penalties. The same would happen in the UK if HMRC found out.