Offshore Company Setup: Remitting Profits Home Without Paying Tax?

[lordchunkington]

Hi Guys,


I'm resident in Ireland and run my ltd company from there, extracting profits as salary and paying 50%+ tax on this.


I'm looking into options to reduce this. One of the main ones I was considering is becoming non resident in Ireland and moving to Malta. I can easily run my company from anywhere and would not mind moving to somewhere with a nicer climate! The plan would be something like this.


1 Apply for ordinary residence in Malta


2 Incorporate a Maltese company wholly owned by a 0% taxed foreign holding company (in which you hold your shares)


3 All profits of the Maltese company are distributed as a dividend to the foreign 0% taxed holding company (probably located in the Seychelles) ;


4 The holding company distributes all the profits to your personal bank account outside Malta (probably in the UK or Switzerland).


Under this structure, the overall net effective tax rate on the profits derived by the Malta company as well as the dividends received to your personal account (assuming these are not taxed in the jurisdiction in which you have your personal bank account) would be reduced to 5%


Now this sounds very good, but what I'm wondering about it what happens when the holding company pays out the profits to a personal bank account I set up.


Is this liable for UK/Swiss tax if my account is there?


And more importantly, if I were to become resident again in Ireland in the future would this income be taxable? Or would I somehow have to keep it out of Ireland forever?


I'm going to discuss this with a professional tomorrow but any second opinions, advice on it would be much appreciated!


Thanks

 

[henrick]

Why do you want to go for Malta for your incorportaion?

 

[lordchunkington]

Why do you want to go for Malta for your incorportaion?

It's in the EU, it's a direct flight from Ireland so is easily accessible.


If there was another EU option that offered a better deal I'd be interested in that, Cyprus is not as accessible and perhaps not as stable also.


Thanks

 

[JohnLocke]

Now this sounds very good, but what I'm wondering about it what happens when the holding company pays out the profits to a personal bank account I set up.
Is this liable for UK/Swiss tax if my account is there?

The money has to be taxed where you are a resident. Not where the bank account is located. Forget about Swiss bank account since they will require huge deposits to even consider you to become a customer.

 

[JohnLocke]

And more importantly, if I were to become resident again in Ireland in the future would this income be taxable? Or would I somehow have to keep it out of Ireland forever?

In most countries in Europe then when you have resigned from a citizenship from a certain country and have been abroad for some time (typically 1 or 2 years) and come back (you must have been taxed in the country of resident) then you can take the money into the country of your new residents without to pay tax. That's how it usually is unless the country has tax regulations similar to the USA where you are taxed on world wide income regardless of your situation in the USA.