Needs some info about opening an offshore company...Cheers!

[Wuming]

Hello Everyone.

I am a European and British citizen. I have been working as a consultant in the UK but in the past years, my business has recently started to take clients from other countries and I am in the process of moving out of the UK as a resident...Therefore, I am considering opening an offshore company for my business.

At the moment I am considering:
- the Isle of Man
- Guernsey

The reason is that they are both within the EU and you can access online services like Wise or Revolut for payments and moving things around, whereas countries like Panama, Seychelles etc are not accepted. For me is about having a better tax-efficiencycy for the company (of course I will pay my own tax in the country where I am going to live), having an easier life in terms of bureaucracy and filling requirements and be able to take some initiative that would be otherwise difficult to organise in the UK now. The company deal with IT consultancy, but I am trying to launch a crypto project and, Ideally, I can use also it to hold one or more properties in other countries within Europe.

Some specific questions I have are:

-> which one is the simplest to set up and maintain offering the best infrastructures considering I won't be living or travelling there
-> If I open in the Isle of Man, can I claim back VAT? how it works in Guernsey since they don't have VAT if I buy stuff in the EU/UK?
-> which one is the most Crypto friendly and Gaming/Ecommerce friendly?
-> If I buy a property, let's say in France or Spain, will I have to pay tax for holding the property?
-> If one day I decide to close the company and move the property/s back to me, will I have to pay tax?

Thanks in advance for your help. If you have any reliable company to ask about this or help me to open and maintain this I would appreciate it. There are a lot out there, but quite a few don't really strike confidence in me.

Cheers

 

[cypriot]

I can tell you about the property which is suitable for almost every scenario. If you buy property somewhere in another country you are liable, no matter who is buying the property (company or person) for property taxes and also if the property generates income you have to declare it to the local authorities (and get taxed). When you close the company it really depends on where you are tax liable at that time, but most of the cases you have to pay tax.

 

[Marzio]

At the moment I am considering:
- the Isle of Man
- Guernsey

The reason is that they are both within the EU

Did you miss Brexit? IOM & Guernsey are not part of EU.

 

[KDX]

I'll tag a few people who could help you.

Could you give us just a bit more info? as in:
What are your citizenships?
Where are you planning to relocate?
If you could reduce your tax, would you be willing to relocate to a low-tax country? There are quite a few options nowadays.

What is your budget for the whole structuring and how much revenue are you pulling in? (as in, is it worth it to setup a complex structure or substance)

You can always set up a payment service company to accept payments via Wise, Revolut, etc., it's quite a common setup.

@CaptK @CyprusLawyer101 @Fred

 

[CaptK]

Hello Everyone.

I am a European and British citizen. I have been working as a consultant in the UK but in the past years, my business has recently started to take clients from other countries and I am in the process of moving out of the UK as a resident...Therefore, I am considering opening an offshore company for my business.

At the moment I am considering:
- the Isle of Man
- Guernsey

The reason is that they are both within the EU and you can access online services like Wise or Revolut for payments and moving things around, whereas countries like Panama, Seychelles etc are not accepted. For me is about having a better tax-efficiencycy for the company (of course I will pay my own tax in the country where I am going to live), having an easier life in terms of bureaucracy and filling requirements and be able to take some initiative that would be otherwise difficult to organise in the UK now. The company deal with IT consultancy, but I am trying to launch a crypto project and, Ideally, I can use also it to hold one or more properties in other countries within Europe.

Some specific questions I have are:

-> which one is the simplest to set up and maintain offering the best infrastructures considering I won't be living or travelling there
-> If I open in the Isle of Man, can I claim back VAT? how it works in Guernsey since they don't have VAT if I buy stuff in the EU/UK?
-> which one is the most Crypto friendly and Gaming/Ecommerce friendly?
-> If I buy a property, let's say in France or Spain, will I have to pay tax for holding the property?
-> If one day I decide to close the company and move the property/s back to me, will I have to pay tax?

Thanks in advance for your help. If you have any reliable company to ask about this or help me to open and maintain this I would appreciate it. There are a lot out there, but quite a few don't really strike confidence in me.

Cheers

Since you are leaving the UK, it now becomes beneficial to you.
Keep the business and any assets you want to purchase seperate. Set up an SPV for the asset purchases.
You can loan funds to the asset buying company from your current company.

Remember you will have Permanent Establishment issues. So you need to find the best place for you to live as that is where the companies Effective Place of Management is. So therefore it’s liable for local tax as a local company. If there any DTA/DTT’s in place is also a factor.

 

[Wuming]

Did you miss Brexit? IOM & Guernsey are not part of EU.

They still are part of the economic block. That's the UK not being part of the EU anymore

I can tell you about the property which is suitable for almost every scenario. If you buy property somewhere in another country you are liable, no matter who is buying the property (company or person) for property taxes and also if the property generates income you have to declare it to the local authorities (and get taxed). When you close the company it really depends on where you are tax liable at that time, but most of the cases you have to pay tax.

Yes, Obviously tax will be paid in the country the property is...my question is whether there is the risk to pay tax twice, where the company is and in the country the property is.

I'll tag a few people who could help you.

Could you give us just a bit more info? as in:
What are your citizenships?
Where are you planning to relocate?
If you could reduce your tax, would you be willing to relocate to a low-tax country? There are quite a few options nowadays.

What is your budget for the whole structuring and how much revenue are you pulling in? (as in, is it worth it to setup a complex structure or substance)

You can always set up a payment service company to accept payments via Wise, Revolut, etc., it's quite a common setup.

@CaptK @CyprusLawyer101 @Fred

Hello,

thanks for your reply.

I have European and British citizenship so I can move around.

Not sure where I will relocate. I might even move around. I hear Spain has Beckham Law, so that could be an option...but I am still researching. The point for me is that is pointless to keep a UK business when:
a. I don't trade with the UK much nowadays
b. I am not even living in the UK (in the last year I haven't spent a single day, yet I am paying tax there)

No complex structure or substance. Mine is a small business, I would say startup...I want a place where I can consider working on Crypto projects as well without a lot of hassle like the UK and where I can keep ideally some properties without having them as mine until I don't definitely settle down.

I wouldn't know how to set up a payment service...I don't receive a very large amount of money but maybe it could be used as a viable business as well?

 

[CyprusLawyer101]

Hi @Wuming , there are quite a few matters for you to consider. Whether you will move residency to another jurisdiction or not would make a difference in your set up and its something to be kept in mind.
Looking at EU jurisdictions having a good non dom regime like Malta, Cyprus or Portugal would be a good place to start.
Generally VAT matters are subject to harmonization under EU directives so the same rules would apply more or less everywhere in the EU with only variations being the rates. Your overall operation will determine how VAT will be treated and this can be determined after carefully considering the logistics of your business.
Tax wise you can achieve excellent overall effective tax results combining it with your non dom status.
Cyprus , Malta and Portugal are all crypto friendly, although finding a bank to deal with crypto is not possible oe rather difficult currenrly in these jurisdictions, howeve this does not mean that you could not bank abroad.
As for acquiring a property , rental income generated from the property will be taxable where the property is situated. Capital gains as well as stamp/transfer duties at the point of sale would also be taxed in the jurisdiction of the property, however structuring opportunities may be available to reduce both.
Transferring the property back to your name when closing the company may incur taxes and transfer duties although the method of how this would be achieved as well as local applicable laws and exemptions will determine this.
Finally holding property, running a consultancy business and a crypto project through the same company looks more like a recipe for disaster on many fronts. If you would be interested to discuss your options and how you could proceed, do let me know and I would be happy to PM you and discuss.

 

[CaptK]

I still believe UK is the best option especially since you don’t have any UK clients and also crypto regulation regarding actual crypto business is a long way from regulation.
All they care about is the buyers and sellers but if you have an actual project/business you will be fine.
That’s what I would do. As @CyprusLawyer101 said. Seperate each business into its own company.

No one has a crystal ball to know what the future will entail. Better the devil you know!!

 

[icecold]

I still believe UK is the best option especially since you don’t have any UK clients and also crypto regulation regarding actual crypto business is a long way from regulation.

You say it is unregulated in the UK and won't be for a very long time, do we speak years and where do you know that from ?

 

[CaptK]

Crypto as a business will be hard to regulate especially on a non investment level.
Anything outside of where you exchange with 3rd party retail and or investment aspect about 3/4 years. They have to give you a a grace period of about 6 months like they did with BTC when they announce it.

If it's purely your own funds invested, Blockchain, game or metaverse project then they can't regulate that.

We are involved in a lot of projects on the VC side and have assisted clients in getting crypto licenses in the UK and Europe. They can only regulate exchanges and investment companies which deal in Fiat, this falls into Financial regulator, FSA. It gets a little more complicated when you have sophisticated and institutional investors because going by their rules you don't need regulation under the current regulations. Anything DEX would be very hard for them to regulate.

Our in house compliance officer (Ex FSA) is crypto mad so he is always checking to see what direction regulation is going and also has friends who are the ones working on regulation at the FSA.
They still don't get crypto because they don't look at it for what it is, they still base it on the current fiat system.