OFFSHORE NOMINEE STRUCTURES
UK NOMINEE/ FIDUCIARY STRUCTURE
DISCRETE OFFSHORE STRUCTURE
IDEAL IN EUROPEAN UNION SITUATIONS
With the ever increasing vigilance of the tax authorities, especially with the introduction of offshore blacklists, it has, in recent years, become increasingly difficult for companies incorporated in offshore jurisdictions to trade with on-shore companies.
By using a UK registered company, which agrees to transact business on behalf of an offshore company, a structure is available which gives an on-shore profile yet allows the benefits of offshore taxation.
The UK company is formed specifically to operate as a nominee for the offshore company - in effect the UK company acts as a fiduciary or agent for the offshore company. The two companies sign an agreement which specifies the terms of the agreement between them. All business is then conducted in the name of the UK company, but on behalf of the offshore company. The existence of the offshore company behind the UK company need not be apparent to customers; as far as they are concerned, all they will see is the UK company. The customer enters into a contract with the UK company, is invoiced by them and pay the invoices into the bank account of the UK company. Income is then remitted to the offshore company by the UK company after deduction of an agreed commission. The UK company is managed and controlled by the offshore company and its officers, as is the bank account of the UK company.
It should be noted that the UK company cannot trade within the UK or with any UK businesses. If it does then this income would be subject to UK taxation.
- Ideal for use as a European trading structure where the receipt of invoices from an offshore company would not be acceptable
- Excellent for situations where an onshore profile is required but where offshore tax treatment is desired
- If linked to a discretionary trust this may prove a suitable structure for long term income/inheritance tax planning
- Can be used effectively in VAT triangulation situations
Taxation /Accounts The UK company pays UK Corporation Tax on its commission although all allowable expenses incurred in carrying out its business will be deducted first. The ultimate success of this type of structure relies on the fact there is no UK source income. This, in conjunction with the fact that the company is being controlled and managed from outside the UK, means that the UK Inland Revenue can only assess the UK company for tax on the fees it earns by way of commission for effecting the business of the offshore company. The payments made to the offshore company by customers are therefore not subject to UK taxes. Usually a commission of between 5% and 10% would be arranged which would mean that, on average, the effective rate of tax would be around 1.2% on a total turnover of £100,000 which would reduce on turnover above this. Annual accounts must be filed which may need to be audited.
We can incorporate a UK company with your choice of name in 2 days. Names must end in "Limited" or “LLP” and must fall within certain restrictions. We would be happy to check the availability of your chosen name via our on-line link to the Companies House system and offer advice on name choice.
If the company's turnover exceeds UK£58,000 in a 12 month period the company must register for VAT (Value Added Tax). EUROFINANZZA can handle all VAT registration formalities, and also complete and file all VAT returns to HM Customs and Excise.
EUROFINANZZA can produce invoices and handle additional administration if required.
EXAMPLES OF NOMINEE STRUCTURES
1. Mr. A in Greece is buying construction products from various international suppliers. He wishes to centralise his international purchases through an offshore structure in order to access stable interest rates offered by international banks and in order to access all available international discounts; there may also be reasons of confidentiality involved. However, if his Greek Company purchases these goods directly from a British Virgin Islands (BVI) or Bahamas Company a tax investigation is likely to follow. Mr. A therefore utilises a Nominee Company to sell the goods on behalf of the Offshore Company into Greece.
2. Mr. B is selling electrical equipment from the Far East into North America. Mr. B is based in Europe and does his trading through an European Offshore Company. Some of Mr. B's clients in North America tell him that they would rather not receive invoices from an Offshore Company, so Mr. B uses a Nominee Company to keep his clients satisfied.
3. Mr. C wants to own some real estate in his favourite European holiday destination, but using an Offshore Company might give him problems! He therefore uses a nominee structure to avoid tax problems in the holiday resort and his own jurisdiction!
UK Nominee Simplified Structure please Contact us for prices
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