Advice needed offshore company + UK company structure (not for tax avoidance)

[mrbolton88]

Good Morning,

I'm wondering if the people of this forum can assist us. We are looking to migrate our business location to Panama, not to avoid tax, but to protect the data of our users. We are essentially an online ISP, without going into full detail. Being in the UK we are required to monitor the traffic of our users, however, in a country such as Panama, we are not required to do this. Therefore moving our company here protects our customer's privacy.

The issue is that we do not wish to move our banking to Panama as we lose the rights to PayPal, our credit card processor and a couple of other merchants we use to process payments.

Our thoughts were this, have a Panama company that "runs" the day to day business, the website etc, and have a UK Limited company to process the payments for our Panama company. We are not doing this to avoid paying tax, we are simply doing this to protect our user's privacy. (although paying less tax is never a bad thing, as long as it's above board...)

How would we go about structuring something like this legally? Are there any companies that deal with this type of situation that could advise/assist us?

Any advice would be hugely appreciated.

 

[Camille Württemberg]

Good Morning,

I'm wondering if the people of this forum can assist us. We are looking to migrate our business location to Panama, not to avoid tax, but to protect the data of our users. We are essentially an online ISP, without going into full detail. Being in the UK we are required to monitor the traffic of our users, however, in a country such as Panama, we are not required to do this. Therefore moving our company here protects our customer's privacy.

The issue is that we do not wish to move our banking to Panama as we lose the rights to PayPal, our credit card processor and a couple of other merchants we use to process payments.

Our thoughts were this, have a Panama company that "runs" the day to day business, the website etc, and have a UK Limited company to process the payments for our Panama company. We are not doing this to avoid paying tax, we are simply doing this to protect our user's privacy. (although paying less tax is never a bad thing, as long as it's above board...)

How would we go about structuring something like this legally? Are there any companies that deal with this type of situation that could advise/assist us?

Any advice would be hugely appreciated.

This is a very common structure that we have organized many times for VPN providers and cloud hosting providers.

Technically the UK company becomes a re-seller of the Panamian company's service, this helps for the regulation but not for the taxes.

In our experience, it is easy to export the operations of your business to Panama and have substance in the country, this allows you to have competitively priced operational labour and at the same time benefit form the Panamanian tax-regime. Depending on the volume of transactions, you will need to design a Transfer Pricing policy to define the P&L that stays in the UK and which goes to Panama.

In our last case, the management team was based in high-tax countries and we managed to get a transfer pricing policy approved for 87% of the profits to be taxed in Panama (at 0%).

Feel free to send me a PM to organize a call to see how we can help you.

 

[Willblack]

@James Turner will, I believe, be able to help you with such a setup.

 

[mrbolton88]

This is a very common structure that we have organized many times for VPN providers and cloud hosting providers.

Technically the UK company becomes a re-seller of the Panamian company's service, this helps for the regulation but not for the taxes.

In our experience, it is easy to export the operations of your business to Panama and have substance in the country, this allows you to have competitively priced operational labour and at the same time benefit form the Panamanian tax-regime. Depending on the volume of transactions, you will need to design a Transfer Pricing policy to define the P&L that stays in the UK and which goes to Panama.

In our last case, the management team was based in high-tax countries and we managed to get a transfer pricing policy approved for 87% of the profits to be taxed in Panama (at 0%).

Feel free to send me a PM to organize a call to see how we can help you.

Hi Camille,

Thank you for responding, I'm not sure if it's because I'm new to the forum but I can't PM you. Are you able to send me a PM with an alternative contact method?

Regards,

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[James Turner]

Hi,

Thank you for the referral @Alex115

Using the suggested structure of UK payment processor and Panama trading business works fine to get around the payment issues associated with Panama. You will simply need an agreement between the two companies and to account carefully for the activity so that you are not seen by the UK to be using the structure to deliberately evade tax. If you do not intend to use the structure to reduce tax then the accounting process will be imperative, which we can also assist with. Maybe DM me for further discussion.

 

[mrbolton88]

Hi,

Thank you for the referral @Alex115

Using the suggested structure of UK payment processor and Panama trading business works fine to get around the payment issues associated with Panama. You will simply need an agreement between the two companies and to account carefully for the activity so that you are not seen by the UK to be using the structure to deliberately evade tax. If you do not intend to use the structure to reduce tax then the accounting process will be imperative, which we can also assist with. Maybe DM me for further discussion.

Hi James, being a new member I don't have an option to DM you, could you maybe drop me a DM and see if I receive it?