Question UK LLP + Malaysia Residence for Ecommerce

[Lucas32]

Hi Guys,
As mentioned in the title, i already closed my Labuan company (everything has changed and now more expansive and more requirementS ) but i still keep my TAX Residence in Malaysia (0% on foreign income / dividends)

Actually looking to start an eCommerce biz, im interested in 3 jurisdictions UK HK SAMOA
The biz Basically sourcing from China/Vietnam and selling in few Asian countries + Amazon FBA US so basically i will have NO presence, Income, deals, customers in the UK HK SAMOA

My Thoughts
HK good reputation but as you may know the audit and yearly expenses are so so high. banking is a headache.
Samoa is very good but blacklisted and banking is a headache.
UK good reputation, banking easy, Payment processors easy BUT i don't know the yearly expenses for bookkeeping and audit and maintenance????

Now my questions are
- What's the best structure for eCommerce ?
- UK LLP is it expensive? i mean for Audit and maintenance fees etc for eCommerce with high volume of transactions? Can someone give me +/- an estimation or reference ?
- Is there any hidden Obstacles / Issues with UK LLP that secretaries/lawyers doesn't mention or talk about ?

* I Know some of you will suggest UAE but for me its so expansive + i'm just starting in the eCommerce + the product is new so i dont know yet the impact + i already live in a country with 0% income tax on dividends

Thank you

 

[Spinat]

Why not setup a simple UK LTD with EMI and payment processor for your needs. Later on, once your business is growing, you move the entire thing to Dubai!

Or you can try with a Romanian Micro company and research the topic
https://www.offshorecorptalk.com/threads/romanian-micro-company-invoicing-uk-ltd.37262/

 

[Sols]

- UK LLP is it expensive? i mean for Audit and maintenance fees etc for eCommerce with high volume of transactions? Can someone give me +/- an estimation or reference ?

You can form an LLP for a few hundred GBP. If you want a more hands-on experience and support, budget 1-2,000 GBP for incorporation and annual maintenance (not including accounting).

Accounting costs vary depending on size of the business (transactions, VAT scope).

UK LLPs have no statutory audit requirement.

- Is there any hidden Obstacles / Issues with UK LLP that secretaries/lawyers doesn't mention or talk about ?

You should be aware that LLPs do not issue dividends to shareholders. LLPs are treated like partnerships for tax purposes in the UK, meaning the partners (there are no shareholders) are taxed on their share of the profit as personal income tax.

How is this treated under Malaysian law? Do the Malaysian authorities view an LLP as a transparent entity or as a taxable entity? If it's transparent, then your income is closer to salary than to dividends. If it's a taxable entity, then it would be subject to applicable Malaysia corporate tax law, which may be a route towards zero dividends tax for you. Speak with a local tax specialist to confirm.

* I Know some of you will suggest UAE but for me its so expansive + i'm just starting in the eCommerce + the product is new so i dont know yet the impact

If the costs of UAE and Hong Kong are too high, consider focusing more on growing the business than on setting up shaky offshore structures to save on tax.

How bad would it be to pay taxes in Malaysia and be able to focus 100% on your business, instead of spending countless hours finding a cheap but suitable offshore solution that may or may not be sustainable?

+ i already live in a country with 0% income tax on dividends

Have you read about the change that came into effect this year? The type of income that is exempt from tax is much more narrow than before January 1st 2022. So you need to be extra careful and make sure what you set up is compliant with local law, in case someone at the tax authority starts looking into you (which, to be fair, is rare in MY).

 

[Lucas32]

Why not setup a simple UK LTD with EMI and payment processor for your needs. Later on, once your business is growing, you move the entire thing to Dubai!

Or you can try with a Romanian Micro company and research the topic
https://www.offshorecorptalk.com/threads/romanian-micro-company-invoicing-uk-ltd.37262/

Thank you for your reply, yes after looking carefully i think an LTD is better than a LLP in my case
Will check Romanian Micro company

 

[Lucas32]

You can form an LLP for a few hundred GBP. If you want a more hands-on experience and support, budget 1-2,000 GBP for incorporation and annual maintenance (not including accounting).

Accounting costs vary depending on size of the business (transactions, VAT scope).

UK LLPs have no statutory audit requirement.


You should be aware that LLPs do not issue dividends to shareholders. LLPs are treated like partnerships for tax purposes in the UK, meaning the partners (there are no shareholders) are taxed on their share of the profit as personal income tax.

How is this treated under Malaysian law? Do the Malaysian authorities view an LLP as a transparent entity or as a taxable entity? If it's transparent, then your income is closer to salary than to dividends. If it's a taxable entity, then it would be subject to applicable Malaysia corporate tax law, which may be a route towards zero dividends tax for you. Speak with a local tax specialist to confirm.


If the costs of UAE and Hong Kong are too high, consider focusing more on growing the business than on setting up shaky offshore structures to save on tax.

How bad would it be to pay taxes in Malaysia and be able to focus 100% on your business, instead of spending countless hours finding a cheap but suitable offshore solution that may or may not be sustainable?


Have you read about the change that came into effect this year? The type of income that is exempt from tax is much more narrow than before January 1st 2022. So you need to be extra careful and make sure what you set up is compliant with local law, in case someone at the tax authority starts looking into you (which, to be fair, is rare in MY).

In MY is difficult to set up a company as a foreigner, everything is blur here and the laws change every week, depend also on the officer mood, and need local director .. the audit, Capex and maintenance fees are high ... anyway not for me


Now for the LLP i think the LTD is much appropriate for me as @Spinat said less hassle, less fees and even the tax is less than MY of course with more reputation

My idea is not to reduce taxes but more about the ease of incorporation, the Audit, maintenance fees etc

Yes, MY foreign income tax already changed but i have no issue, i can move back to my country where no CRS, no CFC and almost no Tax treaties, they don't care at all about collecting tax (i know it's sounds crazy but my country NOT ASKED TO COMMIT AND THAT HAVE NOT YET SET A DATE FOR THE FIRST YEAR OF EXCHANGE)

 

[Spinat]

My idea is not to reduce taxes but more about the ease of incorporation, the Audit, maintenance fees etc

if that matters more to you, Romania Micro Company and UK LTD may be good.

I'm not aware of how difficult Dubai is @Fred may be the guy to speak with.

 

[Lucas32]

if that matters more to you, Romania Micro Company and UK LTD may be good

I'm not aware of how difficult Dubai is @Fred may be the guy to speak with.

Thank you @Spinat

 

[orangekangaroo]

Sorry but what is the benefit of LTD over LLP? LTD is corporate taxes. No audit requirements for LLP up to 1 million turnover.

 

[ecool]

i can move back to my country where no CRS, no CFC and almost no Tax treaties, they don't care at all about collecting tax (i know it's sounds crazy but my country NOT ASKED TO COMMIT AND THAT HAVE NOT YET SET A DATE FOR THE FIRST YEAR OF EXCHANGE)

what is your country? If isn't too much to ask

 

[Runway]

UK LLP with Malaysia residence (need to be able to prove 180+ days if necessary to get a TIN) with a UAE offshore company works very very well. Feel free to PM me