Setting Up LTD In Tax Haven (lichtenstein)

[ASB]

There is an additional problem in that many (but not all) UK agencies won't work with non-UK ltd companies.

True, however that is easy enough dealt with by interspersing a UK company between MyCo (tax haven) inc and Agency which operates the contract and buys in the resource.

Of course I am not for one moment suggesting that alleviates any of the problems as to whether the income generated is taxable in the UK or not.

OP, there are certainly some opportunities that can potentially minimise UK taxes due (though often just by deferring them). It depends upon your circumstance and your end objectives. It is far more complex than "I know I'll set up in Guernsey (no ct). Also if you actually need the money for day to day that will very much limit what you may be able to do.

Given your name I am guessing you are not UK domiciled and probably not UK ordinarily resident (just a guess) - if this is the case some expensive advice from the international accountants may prove fruitful if you can defer taking the income until toy leave. If ultimately anything you do decide on doesn't hold up to scrutiny the bill will fall on you and it will likely be very large.

[northernladuk]

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

You seriously want to get a new set of mates or stop talking business over coffee/beer. Do your research on how to run a company on the web rather than in a pub IMO.

Also if it has been discussed on the board before it will mean that the search will be able to find it. Why not do a bit of basic research before posting?

[NotAllThere]

There is an additional problem in that many (but not all) UK agencies won't work with non-UK ltd companies.

[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.

[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

[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

[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]

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.

[malvolio]

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

[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.

[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.

[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]

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