Offshore Company Formation in England UK
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UK Agency Company Set Up
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UK Agency Company Set Up
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How to Open Company in the UK
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UK LLP Formation
Your advisor speaks:
Tax Exempt Company in the UK
Key notes:
The UK, specifically London, is a very popular jurisdiction for forming offshore companies. The UK (London) offers Limited companies (LTDs), and Limited Liability Partnerships (LLP).
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Taxation:
From a tax perspective, an LLP does not pay taxes on its foreign-earned income, while LTDs pay taxes on their worldwide income.
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Acccess to market and product opportunities:
Havng a UK LLP can allow you to have a tax-free entity if it does not trade in the UK while operating through a company formed in London, this means you can operate and easily access the EU Marketplaces and Platforms, even though the UK is not part of the EU and the EEA.
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LTDs are sometimes used as an agent or agency of offshore companies formed in tax havens that have it more difficult to access platforms, markets and financial, investment, or banking products.
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Cons of a UK Offshore Company:
Privacy: Companies formed in the UK must report the Person(s) with Significant Control (PSC), which at the end of ownership chain must point out to an individual, especially if the individual is holding his ownership of the UK company using a foreign company to hold his chain of ownership.
UK Limited Liability Partnership LLP
LLPs are pass-through entities, hence you will not pay taxes if you don’t reside in the UK and your LLP does not operate in the UK.
Besides not getting taxed if you don’t engage in UK Business, you can easily open a fully functional UK Bank Account online or in person, connect it to Stripe or PayPal.
Requirements​
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2 Members, minimum: these can be individual members, corporate members, of a mix of both.
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Registered Address to receive official communications from the Companies House, HMRC, court house, etc.
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Register for self-assessment: Each Partner has to register for “self-assessment”, where each Partner fills a form, and mails it to the HMRC (tax authority), informing the HMRC, in summary, that the Partner does not live in the UK, and also provides additional personal information.
Register for Self-Assessment:
After the LLP is formed, the Parners and the LLP must register for Self Assessment. Self-Assessment registry can be done online.
Partners' Registry for Self Assessment: Partners who are individuals register using form SA401, and Partners who are Corporate Bodies or Legal Entities register using Form SA401.
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LLP Registry for Self Assessment: The Designated Partner must register the LLP for Self Assessment using form SA400.
Yearly Tax Returns Related to UK LLPs owned by non resident foreigners:
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SA800: Partnership Tax Return
This Partnership Tax Return will only include income arising in the UK. Foreign Sourced income is not reported. So if the company didn't have UK sourced income, we would fill out form SA800 reporting 0 income.
The HM Revenue & Customs on its Guidance HS380 Completing Partnership Tax Returns for partners non-residence in, or domicile outside, the UK, states: Where all the partners are non-resident, the Partnership Tax Return should show only the profits arising from UK operations. A corporate partner should separately enter on its return any profit arising overseas which relates to the UK permanent establishment.
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How to file: to file SA800 online it is needed to pay an authorized software.
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UK LLP Partners' Income tax Return.
Partners of a UK LLP have to submit a personal income tax reporting their UK Sourced income. This is done by filling out form SA100, and Supplementary form SA104 where the Partnership's income is reported.
UK LLP Compliance before the Companies House
Submission of Companies Accounts, officers, and Persons with Significant Control filling.
UK Limited Company (LTD)
A UK LTD is not a tax-free entity, but it is a good option as you can manage it all remotely, you can open a bank account without a problem.
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1 Shareholder, minimum.
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Yearly tax statements, even if the company is dormant.
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Easy to open bank account.
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If the UK has signed a tax treaty with your country of tax residency then you can benefit from only being taxed in one jurisdiction (in case your country of tax residency has a worldwide tax system, this can help you).
Yearly Maintenance Expenses:
The yearly maintenance expenses will depend on whether you file the tax statements yourself, or if you hire an accountant and bookkeeper whose fee will vary depending on the amount of transactions you had.
UK Agency
Some jurisdictions, such as Belize, Cayman Island, Cook Islands, Samoa, etc. are havens that don’t require you to do accounting or bookkeeping, the ownership of these companies is very private, but because of those benefits, these jurisdictions are blacklisted and tagged as non-cooperative jurisdiction, you will face problems such as a lot of paperwork when receiving or sending a wire transfer, and you also won’t be able to access payment gateways such as PayPal and Stripe.
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So the main problem with those jurisdictions is the ease to access the financial system. This problem is by-passed by creating a UK Agency, which is a UK Limited Company that acts on behalf of the main offshore company to collect payments or to act on behalf of the main offshore company.
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Besides setting up the UK LTD structure, the following is needed to this strategy
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Agency agreement between the two companies, and the UK Agency will pay taxes based on its earned commission for acting as the agent.
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UK LTD (agency) shareholder(s) should not be the principal offshore company.
Disclaimer: Nothing on this website shall be considered nor be a substitute for legal, tax, or financial advice. Please contact your licensed advisor for legal, tax, or financial advice.