Seychelles + UK agent?

[MissEllie]

Hello, I am considering an offshore company for my business. My situation is as follows: based in EU member state, I develop software for 1 client based in the other EU member state (I have onshore co. for doing this). No income generated in my country. Plus, I am starting a website selling electronic products worldwide (educational videos) - no revenues yet, but I assume about 2 000 Eur / month in the beginning.


I have no employees, just 1 subcontractor. Please, I would need to discuss my options for offshore company, focusing on the following:


- my client may not agree to be invoiced from Seychelles or something like that, so I need to consider UK agency structure. I plan to set up Seychelles company with Cyprus bank account, plus UK company serving as an agent for Seychelles co. UK Co. would bill my client. My subcontractor would bill UK Company. UK company then calculates profit and remits it (after deducting some commission) to Seychelles. Do you think it could work? Or do you see any problems in this structure?


- any ideas how to convince my client to accept Seychelles invoices? 


- regarding my website: it already exists, but all is paid from my country, domain + PayPal + video streaming is all registered and paid by my onshore company (I plan to eliminate it after going offshore). Do you have experiences with transfer of all these services to Seychelles co.? I know PayPal is not very viable, but what about other stuff?


- As I am EU national, and Cyprus is EU state – am I in some sort of risk (revealing my identity, tax man going after me…) when bank account of Seychelles co. will be in Cyprus bank? I know the bank will know ultimate beneficiary, so that’s why I ask.


Thank you for any of your ideas. I read a lot in this forum and you guys made me to want this all happen!


E.

 

[clemens]

Have you checked if the Seychelles have a DTA with the UK? Also you may want to consult a local tax adviser for exact information about this matter.


My spontaneous qualified guess it that I don't see any issues what should stop you to use this mechanism to avoid tax. We have discussed in various other threads here that it all may come down to the control and management of the company to avoid to pay tax locally. This is typically done with nominees!!


There is a option for a Cyprus company to hold Royalities, patents and other copy rights which it can collect a fee for on a monthyl, quarterly or annually basis. So It will look like the Cyprus company will invoice the UK company for such rights.


I'm just think loud here..

 

[MissEllie]

jpay, thank you for your opinion. Just let me ask why should I need DTA between UK and Seychelles? I am not planning to remit dividends from UK to Seychelles. Nope.


Instead, there will be normal contract between UK and Seychelles. UK will act as an agent for Seychelles - it means UK will carry out all activities on behalf of Seychelles - also bill clients and receive payments. UK would do it on behalf of Seychelles, but under its own name. Then UK would deduct any commission and send remaining profit to Seychelles.... I don't know if I explained it clearly now, since I am not a lawyer, that's why I need to check this.


UK would tax only the profit from commission received...


I know this structure is maybe a bit complicated and maybe more expensive than billing directly from Seychelles, but what can I do, my client just does not want to accept invoices from tax haven.


Need to think about that Cyprus company holding royalties.


Anyway - I have nothing with UK. I just heard that there is some special tax treatment of UK agents. Any thoughts?

 

[clemens]

So what you say is that the Seychelles company will be a "Parent company" for the UK company or will they be seperate entitys? Because the only way from my knowledge to do what you say you want, is if the Seychelles is a parent company otherwise you will need some really good contracts between the two vehicles which I do hope you will ask a lawyer in the UK to help with.

 

[MissEllie]

Well, UK and Seychelles will be independent. Said in other words - I will own both of them directly through nominee shareholders. And yes, there would be contract between the 2. I heard that some companies setting up offshores can draft such a contract - is cclogic doing this? I know it is not allowed to promote competitors here but I cannot find some more info on cclogic's page.


And please, can you advise on EU bank account (Cyprus...) As I am EU national and the bank knows ultimate beneficiary (me)... is there some risk? of any kind? because I am not planning to give myself dividends from any company... just spend company cash

 

[JohnLocke]

And yes, there would be contract between the 2. I heard that some companies setting up offshores can draft such a contract - is cclogic doing this?

No problem at all to help you with this kind of contracts.

 

[offshoreoffice]

So you can arrange for the contracts between the companies, employees, directors etc? that's great and a huge benefit when it comes to choose the right CSP for our needs, I feel lucky to have found this forum and your company doublethumbsup