Cyprus is one of the most credible jurisdictions for IP in the EU. Otherwise BVI (which you will need to have presence based on new regulations) or Belize.Hi Everyone,
What would a good and cheap option be to set up an offshore company that will hold intellectual property (website/trademark). The company does not need a bank account, just so that company will hold the IP.
Thanks!
which you will need to have presence based
What do you mean with 'need to have presence based'?
I'm not sure Cyprus is particularly credible for IP over any other location to be honest, but BVI or Belize impose certain requirements for substance essentially where IP is concerned meaning that these locations are no longer particularly appealing for IP holding entities.
But something I don't understand, the company should only hold the IP so no bank account. What has tax got to do with the company then?
Whether income will be generated by the IP has not been discussed and therefore how relevant the tax regime of the holding company is has not been established. More importantly the compatability of the IP tax regime with EU standards as mentioned in your post earlier, may or may not be relevant at all to the contributor. The information on Cyprus may of course change the position, but more information would be needed to see whether that is applicable or not. In most cases a location that protects the owner of the IP is sufficient.Background Cyprus IP regime is fully compliant with international developments in the tax treatment of IP income and OECD’s guidance. The IP regime has been reviewed by the EU Code of Conduct and has been assessed as fully compatible with EU standards. Benefits of the Cyprus IP regime 80% of the profits qualifying for the regime are exempt from tax. With a corporate tax rate of 12.5%, this can result in an effective tax rate of as low as 2.5%. Relevant details of the regime Under the Cyprus IP regime, 80% of the qualifying profits generated from the qualifying assets is deemed to be a tax deductible expense for qualifying taxpayers. In calculating the qualifying profits, the new regime adopts the ‘Nexus’ approach. According to this approach, the level of the qualifying profits is positively correlated to the extent the claimant performs R&D activities to develop the qualifying asset (QA) within the same company. Qualifying assets Qualifying assets under the new regime include: • patents, • copyrighted software programs, and • other intangible assets that are non-obvious, useful and novel. Qualifying assets do not include trademarks and copyrights.
Very little if the IP company is not receiving royalties etc as there is no tax liability. I guess you just want to ring fence the IP? You could use a UK company for that. I wrote a thread on cheap UK company setup if your search forum. Just make sure you declare it all to your taxman and do annual filing. You need to do this as taxman does not know company has no activity unless you tell them sadly.
Can this be done with domain names (UK dormant company which holds a few domains)? What if you want to sell the domain to someone?
You can always declare the offshore company and move residency to a tax free country before any sale. Plenty of people do this all the time with larger businesses.
Except for the exit tax that's becoming more or less mandatory across EU, yes.
AgreedWhy not Wyoming? It's cheap and quick to create and hard to sue
Economic Substance refers to new legislation introduced in the British Virgin Islands (BVI) which derives from an EU based unfair tax practices initiative that requires certain entities that are incorporated or registered in the BVI, and which conduct one or more of a set list of nine relevant activities, to comply with local requirements and demonstrate adequate ‘economic substance’. The BVI legislation follows closely the approach taken by the Crown Dependencies of the UK (Jersey, Guernsey and the Isle of Man) and the other UK Overseas Territories including the Cayman Islands and Bermuda.
The legislation imposes economic substance requirements on companies incorporated or registered in the BVI and limited partnerships with legal personality that are formed or registered in the BVI (together, relevant legal entities), which carry on one or more of the following relevant activities:
Banking
Holdings Business
Insurance
Fund Management
Headquarter Business
Finance and Leasing
Distribution
IP
Shipping
I totally agree with you. They are in a process to remove everything that the small man could hide there last safings. The Elite of this world, the 1% will keep their money holes a live and no one will ever touch it.Strange we never heard of an attack on the trusts ... because that is where the most and the most black and the oldest money is sitting