Scottish LP possible structure

[Cony]

Hello,

my intention is to create a company in the OECD, the goal is to pay 0 taxes, have a company in a well respected jurisdiction, possibly maintain a good level of anonymity and being able to use stripe and paypal is also a plus.
one of my option was to create a SLP and this is an answer I received:

"the limited partner can be an offshore company which then eliminates the possibility of any tax liability for you anywhere, especially if you bank in a jurisdiction that will not share your offshore account information with your home tax authorities. The UK company and the Scottish LP will share the same name and be interchangeable almost in that the UK company can act as the onshore banking partner for the partnership, settling transactions from Stripe and Paypal in the name of the Scottish LP into its corporate account. We recommend using Transferwise in the UK, which is a brilliant banking platform for low cost real time wire transfers and low cost forex conversion rates. They even offer a debit Mastercard.

Tax free profits are then moved to the offshore platform and the UK company declares no taxable income after all deductions etc. The Scottish LP, itself does not have a tax liability if it is not doing business inside the UK with UK customers."

Do you see this as a good solution or there's some fundamental problem that I'm not seeing?

 

[TacitusKilgore]

I like your thinking but also note that you will need to disclose yourself as a PSC to Companies House - this means you will lose anonymity as Companies House data is publicly accessible.

This would have been a perfect solution prior to 2017 when there was no requirement for a Scottish LP to file PSC statements. And indeed this setup was used by many prior to 2017 to launder massive amounts of money!

Some reading: PSC Register: New Statutory Obligations For Scottish Limited Partnerships
and: Extension of PSC register: what do funds with Scottish LPs in their structure need to know? - Osborne Clarke

 

[Cony]

Thank you for your clear answer, I must confess I wasn't aware of the PSC disclosing element, that generally speaking wouldn't be a big problem because a company in the OECD is not seen as one in a jurisdiction with preferential tax regime, so it could do business with anyone here in Chile (and more broadly in South America) without being considered "automatically" related (and all the consequence that come with that status) but at the same time it does block me to do business with any company I'm involved with and that is a problem.
I won't exclude this possibility because a solution may be found and because the business with company I'm involved with would just be a little percentage of the new business.

Another structure that I was considering was a Dubai/RAK holding company and a subsidiary in Latvia (I will still be able to use Stripe and Paypal, and if I want to set up a bank account offshore I can still connect stripe to a transfer wise account), invoices would be sent from the Latvia company and then the profit would be redirect to the Dubai company, leaving possibly 0 tax to pay. Any opinion on this idea?

 

[TacitusKilgore]

Hi Cony, I apologise but I'm not very familiar at all with Dubai or Latvia so I don't want to give you any misinformation. Will any CFC rules apply to you? It sounds like a fairly good setup to me but I don't really have much knowledge regarding those jurisdictions.

 

[Cony]

Don't worry your answer have helped a lot so far, really appreciate your time.
I would probably join the mentor group to see if I can find some way to increase the anonymity and avoid the problem connected to the increase of the CFC rules.

 

[unicorn]

isn't it better to wait for brexit for creating UK (and scottish) structures ?

 

[fshore]

The quote in the first post seems to indicate using a UK company to create a bank account that should be used for the Scottish llp. Not quite sure the details why they are suggesting that instead of just using a UK llp? And if discovered transferwise etc will not like that you use the account for another company than the one you opened the account with.
Also its not clear if the UK company is a Ltd or llp. I assume Ltd as they write it will be an onshore banking partner. But then the name will not be the same, as it will end with Ltd.
And you'll need to other companies as members of the Scottish llp, so in total 4 companies for this setup, seems very complicated.