Checking my logic - Seychelles IBC owning HK company and account

[dingobingo]

Great website by the way!


So, I run an international business services firm and have clients in the US and EU mainly (some in Asia too). They make payments between $5k and $20k.


I'm in the UK and have a UK ltd company with business account.


My thinking was to use the UK company and account to invoice UK clients, and an offshore business and account to invoice anything outside of the UK.


I will of course get professional advice before doing anything, but from what I've read I can setup an IBC with account, invoice my clients and this is 100% legal in the UK as long as I do not withdraw or send myself any of the money from that IBC. I have read about 'loans' but I'll leave that for now. 1) Is that legal?


If it is, I was thinking of going with a HK company and bank, owned by a Seychelles IBC. 2) A good way to go? The reason for this is professional image. I think my clients will raise many eyebrows if they get an invoice for a Seychelles or Belize bank etc, but HK should be ok.


If this is NOT legal, then I was going to go one step further and become a UK non-dom and setup in Dubai. If I do that, 3) how do I handle my UK business - exactly the same as before with regards to corportation tax? 4) How about income tax if I'm non-dom and draw a salary from a UK company?


Thanks in advance


EDIT: Oh, if my setup above is legal, I guess there's no reason for the Seychelles IBC, I can just use my name for the HK company and bank account?

 

[dingobingo]

No ideas guys?

 

[Zqq]

You are asking questions about taxes and legality. I'd suggest you sit down with a lawyer, accountant, or other qualified professional.

 

[dingobingo]

Hi, I will be as mentioned, I wondered though (before I do) if someone could indicate if they think this would work. I've heard it's better to have a plan and info ready when working with a tax specialist to minimise the bill


My above assumptions have been picked up from reading these threads, i just wanted to put it together in one email and get people's thoughts, I'm not looking for concrete legal advice

 

[coromandel]

If your reason to set up HK company owned by Seychelles is for privacy then think again as new laws are in effect that state HK companies have to have 1 named director. You can bypass this with nominee directors but it appears that most HK OSPs are withdrawing this service in line with the changes.

 

[dingobingo]

Hi, actually no privacy is needed, so scrap the Seychelles involvement. Looking for opinions on whether funds that remain in an off-shore corporate account (and are not transferred to an offshore or onshore personal account) are not taxable by UK HRMC. If that's ok, what creative ways are there to legally use that money, i.e. buying property, buying other companies etc.

 

[coromandel]

You are posting about the tax liability of retained earnings in your HK corporate account. If that's the case, then I posted about this before but only got a "it depends" response which never helps. I hope we can get some clarity on the issue.


AFAIK, the current HMRC CFC (controlled foreign company) rulings only apply to profit.

 

[dingobingo]

Thanks Coromandel. I guess this becomes a non issue if I just hurry up and become a non-dom and set myself up in an income tax free zone. My only question then is what happens to my UK company. I guess any profits left in the UK company would attract UK corporation tax, but if I withdrew it all into my income-tax free country personal account then there's no tax.

 

[coromandel]

There have been a few posts here already about nondom status. As I read it your Dom status has less bearing these days especially with new UK tax residency rulings which could mean paying tax even after leaving uk for 4 years.


You can wind the company up and pay the exit tax which may be less than transferring the company abroad then HMRC coming after you for tax avoidance. Alternatively you can set up another company in HK and run it in parallel.