Offshore Company Formation - best value?

jago25_98

Where is the best value place in the world to get this done? For tax, setting up fees and nominee management.

Looking around it seems the UK is a good value place for it. But alas, I think this is too close to home to be a good idea.

Rationale:
I may have income outside of the UK I wish to keep foreign in the future. By doing this I can control my UK taxable income. However, there's no point if it costs me thousands per year.

I could just open a foreign bank account like many appear to do but I'd rather do this thoroughly and properly by having a foreign entity in my control, fair and square, outside British waters.

Best price so far: ~£2000.

I can travel to the country if it saves costs.

Any knowledge on this?

meester

This subject requires specialist help, and be aware that many specialists will lie to get your business. Essentially if the money is earned outside the UK and taxed in a country that the UK has a double-taxation treaty with, you will not pay tax in the UK.

£2000 sounds quite expensive to me.

I'm sure you could register a Delaware LLC for much less than that.

jago25_98

Thanks for the info.

Working off Norway I should get my tax back eventually because of the treaty we do have there :-)

Unfortunately though it takes up to 18 month for that to happen and you have to jump through the bureaucratic hoops. More importantly though it means missing out on 60% interest on investing that paycheck.

In terms of registration costs it's the one off fee isn't too bad, it's the reoccurring fees that I don't like so much.

Thanks for the Delaware tip, it does look cheap so I'm investigating what I get there; shopping :-)

Cook_County

I am sorry but I do not follow your logic.

You are resident, ordinarily resident & domiciled in the UK. Why would channeling your income through a non-UK company save you tax?

Which Article of the Norway/UK tax treaty are you relying on?

Aegis

As far as I'm aware, if you're ordinarily resident in the UK during a specific tax year, you're still taxed on all your income worldwide at UK rates. You can stick all your accounts offshore if you really want to, but I'm not sure if it's going to have the difference you're hoping for...

There have been some very highly publicised cases recently of the HMRC going after people who are trying to evade their tax obligations by using offshore accounts, and it now looks like these individuals are going to be paying a huge additional bill if they don't cough up what they owe.

The only exception I can think of is that you're actually setting up a legitimate business operation conducting business activities wholly outside the UK, but that definitely fits into corporate finances, which is generally going to be far outside the scope of almost everyone who posts here.

Aegis

Looking further into the matter, it seems like there's no legal way to get out of paying UK tax by going abroad. From this page:

f you receive savings and investment income from abroad, you'll usually need to declare this on a Self Assessment tax return. You may have to pay UK Income Tax, but if you've paid foreign tax on the income you may be able to offset (deduct) this.

So even at the lower rate abroad, you'd still have to pay the entire tax amount owed to the UK government, only some of it wouldn't go to the UK. Seems like a bit of a lost cause under the newly tightened system.

jago25_98

I can claim tax back because I work at sea more than I am in the UK.

But it's a pain to do. I haven't managed to jump through the hoops yet because yet make it so hard to do; part of the pick-it-up-it's-yours strategy trick rather than just being richer liberty.
But that's not why I want to do this. It's mostly principle.

Yes, moving away to procure better value for money from a different tax man is on the cards.

The tax rules apply to people. Here the income is abroad and the company (a different thing to me) is abroad.
So "legitimate business operation conducting business activities wholly outside the UK" is true. Multi-national business is not just for corporations.

It then is only related to me if it then comes into my hands, perhaps if I were to pay myself a salary.

Personally for me it's more about freedom than the money. It's not fun being away from the UK from friends and family. Have to make the most of the advantages.

All this is very different to an individual use opens an account as themselves to hide money.
The difference here is that a company is a separate legal identity. People, this is how corporations and the rich do this the world over. If this was not allowed our economy would stand no chance in competition to the economy next door that does allow this. It is above board but may not be viable below threshold for time, money and effort.
- that's what I'm investigating.

Cook_County

I am not sure what lessons you are giving.

You are resident, ordinarily resident & domiciled in the UK.

You could indeed - legally - claim the 100% foreign earnings deduction as a seafarer, so you pay far less UK tax than the rest of us.

Beyond that, any company you create anywhere would be managed & controlled within the UK (because you would either be a director or a shadow director) and profits generated would be reportable & taxable in the UK whether or not distributed.

You previously referred to a claim under the UK/Norway tax treaty. Which Article of the treaty are you relying on for this claim?

meester

Cook County, plenty of tax avoidance schemes use corporate finances to avoid personal taxation in the UK. Rich people don't just say 'I'm in the UK, I'm going to pay 40% tax'. They avoid it.

Indeed the last budget attempted to clamp down on some aspects of this:

"The Government announces, with retrospective effect from 12 March 2008, clarification of indefinitely retrospective legislation introduced in 1987 to counter double taxation treaty avoidance schemes, so that the legislation applies as intended and is effective. This will ensure that, notwithstanding the wording of any double taxation treaty, UK residents pay UK tax on their profits from foreign partnerships. Budget 2008 announces there will also be a further measure to prevent future tax avoidance through the misuse of double taxation treaties by UK residents. "

This is just ONE aspect of offshore taxation, and it (was) perfectly legal. There are plenty of others. This is for people who are earning money in the UK in every real respect, they just exploit tax avoidance schemes such as this one.

There are still other ways to do this, and they are not all going to go away. Especially not if the money is actually not earned in the UK.

Cook_County

jago25_98 wrote: »

I can claim tax back because I work at sea more than I am in the UK.

But it's a pain to do. I haven't managed to jump through the hoops yet because yet make it so hard to do; part of the pick-it-up-it's-yours strategy trick rather than just being richer liberty.
But that's not why I want to do this. It's mostly principle.

Yes, moving away to procure better value for money from a different tax man is on the cards.

The tax rules apply to people. Here the income is abroad and the company (a different thing to me) is abroad.
So "legitimate business operation conducting business activities wholly outside the UK" is true. Multi-national business is not just for corporations.

It then is only related to me if it then comes into my hands, perhaps if I were to pay myself a salary.

Personally for me it's more about freedom than the money. It's not fun being away from the UK from friends and family. Have to make the most of the advantages.

All this is very different to an individual use opens an account as themselves to hide money.
The difference here is that a company is a separate legal identity. People, this is how corporations and the rich do this the world over. If this was not allowed our economy would stand no chance in competition to the economy next door that does allow this. It is above board but may not be viable below threshold for time, money and effort.
- that's what I'm investigating.

It's a shame but these words are entirely different from the words I originally replied to.

(I posted my reply at 4:02 pm & 3 minutes later the OP changed all of the words presumably intending to make him/herself look clever.)

Given that the OP appears content to evade tax and is unable to substantiate his plans by quoting relevant sections of UK law, foreign law or tax treaties my only advice would be to see a good tax lawyer so that s/he at least has professional privelege when the police come calling.

jago25_98

So, just to confirm, to change to a new tax regime (new country) I have to have an address in the destination country?

Or do I have to gain nationality, domincle or full residency?

My post said before editing
"Seems I'm the one giving lessons here"
I removed this to avoid misinterpretation.

I think you are trying to encourage me to remain in the claiming tax back route? I guess for beliefs of nationality and loyalty. Bit unclear, some sort of emotions here possibly trying to communicate.

I guess my belief that I can shop around for a new nationality like you would shopping for groceries is not shared! :-)