Company setup with foreign ownership

[jamesbrown]

The Canadian owner of 50% will need to take advice in Canada about the taxation in Canada of dividend extraction from the company.

Most countries have rules on Foreign Controlled Corporations, which can be pretty painful in terms of regulatory and reporting requirements; certainly, the rules in the US are cumbersome, and ultimately expensive, to satisfy. Hopefully, these other shareholders know what they're doing.

[TheCyclingProgrammer]

outstanding. Not unusual..my present Ltd. I only own 1%.

I think you're confusing allocate shares and shareholding. If you own the only share in your company you own it 100%.

[Jessica@WhiteFieldTax]

The new company will be based and controlled in the UK (by me).

One of the owners is a foreign company - based in Canada.

New company be about 20% owned by the foreign company, and about 10% each me and another person.

Oh yes...LTD.

On facts given the company will be registered in the UK, and controlled from the UK, and thus fully liable to UK tax regime.

The Canadian owner of 50% will need to take advice in Canada about the taxation in Canada of dividend extraction from the company.

If you propose that your company remains controlled in the UK but trades in other jurisdictions then you will need to consider host country tax issues.

As a general principle, a overseas shareholder in a UK company is, by itself, not of great relevance to UK taxation. The issues are around extraction and repatriation of funds back to the controllers home country.

Clearly this a simple answer, on acts given, to a potentially complex question, and I would recommend that you seek advice from your own accountant.

[Jessica@WhiteFieldTax]

outstanding. Not unusual..my present Ltd. I only own 1%.

The concept of outstanding share capital is largely historic now; new formations generally don't have an authorised share capital, just issued.

In fact of you current company you own 100%. Its just that only 1% is issued. No one owns the other 99% other than issuing them is in your gift.

I think I see what you are saying, effectively 4 shares in issue (or 40 or 400), 2 to overseas co, 1 you, 1 AN other.

[TheFaQQer]

The new company will be based and controlled in the UK (by me).

One of the owners is a foreign company - based in Canada.

New company be about 20% owned by the foreign company, and about 10% each me and another person.

Oh yes...LTD.

How does a minority stake give you control - are you using different classes of shares to do that?

[lilelvis2000]

and the other 60%?

outstanding. Not unusual..my present Ltd. I only own 1%.

[tractor]

...

and the other 60%?

I was going to ask this, and no matter what the OP thinks, in that setup, 10% is NOT a controlling share.

[eek]

The new company will be based and controlled in the UK (by me).

One of the owners is a foreign company - based in Canada.

New company be about 20% owned by the foreign company, and about 10% each me and another person.

Oh yes...LTD.

and the other 60%?

[lilelvis2000]

The new company will be based and controlled in the UK (by me).

One of the owners is a foreign company - based in Canada.

New company be about 20% owned by the foreign company, and about 10% each me and another person.

Oh yes...LTD.

[Jessica@WhiteFieldTax]

You need to clarify this a little.

Unless I've read it wrong at one stage you are asking about company with foreign ownership then you talk about a foreign company .

So first question, in which juristridtion are you setting the company up, and what legal constitution?

Next question, where will it be controlled from?

[lilelvis2000]

I'm setting up a new company for some new technology that I want to introduce to the UK.

I'm setting this up with a foreign company which will want about 20% of the shares and at least one director. Plus there is one other person who is also foreign who wants a share. I'll have the remainder of outstanding shares, probably about 10%.

Any complications in this. And are there any online formation companies that can set this up.