Is a branch required in my country for a UK company?

[Paranormal]

Hi I'm Swiss and as the title says, is a branch required in my country for a UK company?
I'm not doing business in Switzerland itself.
I'm planning to sell products via FBA (Fulfillment by Amazon), but it might be that someone from Switzerland is buying a product once in a while.

 

[James Turner]

I doubt that a place of business requirement exists in Switzerland if the company is not specifically operating locally. Certainly the UK has no requirement for you to do this.

 

[Paranormal]

And how about taxes, where do I need to pay them, UK or Swiss?
Does it matter wether the money remains on a UK account or will be transferred to Swiss?

 

[James Turner]

And how about taxes, where do I need to pay them, UK or Swiss?
Does it matter wether the money remains on a UK account or will be transferred to Swiss?

A UK Company will be taxed in the UK. The location of actual funds does not change the tax position in any way so funds may be retained in the UK or paid to Switzerland, or the company could only hold a Swiss bank account and receive the funds directly into Switzerland with them never touching the UK if you wanted.

 

[fshore]

http://taxsummaries.pwc.com/ID/Switzerland-Corporate-Corporate-residence

 

[Paranormal]

@fshore
So according to your link, my "corporate residency" will be in Switzerland which would be the place where I have to pay tax?
How about double-tax agreement? If taxes were paid in the UK already, I should not be tax liable in Switzerland...

 

[fshore]

@fshore
So according to your link, my "corporate residency" will be in Switzerland which would be the place where I have to pay tax?
How about double-tax agreement? If taxes were paid in the UK already, I should not be tax liable in Switzerland...

That's not how tax treaties work. You can use the tax treaty if you get a certificate of residence for the company from Switzerland to claim that it is tax resident in Switzerland, so you don't have to pay any tax in UK.

Also if you pay tax in the UK then you can deduct that tax paid from what you have to pay in Switzerland.

 

[OffCap]

And how about taxes, where do I need to pay them, UK or Swiss?
Does it matter wether the money remains on a UK account or will be transferred to Swiss?

International tax works like this (curious why you decided to form in UK btw?).

A company's full income is subject to the rules of wherever it is tax resident. In UK rules if a company is formed there it is UK tax resident. On the flip side a company management and controlled from Switzerland is tax resident in Switzerland so you've got a company that's likely double tax resident (not good). The tax treaty if one applies can provide clarity on this but unfortunately having to resort to tax treaties is a bad starting place because it means the situation is already fairly complex.

Beyond this you need to pay attention to what I call the residency of the income. Usually, this is determined by where the work is taking place (more complicated than this but generally accurate) so if you're doing the work of the business from Switzerland then any income attributable to the work you're doing is going to be taxable in Switzerland.

Then, there might be CFC rules to look at based on your residency if the company is foreign.

What's the rationale for operating via a UK company?

 

[Paranormal]

What's the rationale for operating via a UK company?

For the same legal structure I would need an initial capital of 20'000.- Swiss Francs.

And if the company was taxed in the UK, I could probably avoid progressive tax rates on my private income, as I work already full time in another job.

 

[fshore]

For the same legal structure I would need an initial capital of 20'000.- Swiss Francs.

And if the company was taxed in the UK, I could probably avoid progressive tax rates on my private income, as I work already full time in another job.

I know its normal in some European countries to use UK companies due to lower requirement of registered capital. You might have to register the company as a foreign company in Switzerland and then follow Swiss reporting and taxes. In the UK you only have to file annual report with company details and nothing with HMRC, after they have have confirmed that the company is not UK resident.
So nothing to save on taxes or administration, but you can get away with lower paid up capital.