UK LTD vs Estonia OU

[ska]

Hi everyone,

Is it better a company in UK or Estonia?

I'm a digital nomad with residency in Georgia (I'm an Individual Entrepreneur with 1% taxation), but in the future I want to open a company and move to Thailand, Indonesia or similar places.

P.S. With Estonia can I pay myself a salary without being taxed 20% on dividends?


Which entity would you recommend from your experience in terms of easiness in saving on taxes, managing the company, accounting and filling taxes? (UK or Estonia)

 

[CaptK]

A UK LLP would work well for you if you intend on living in SE Asia.

 

[ska]

And the second entity?
No i want to open a real company, not a trasparent one.

 

[CaptK]

Then a UK company with will be liable for 19% corporation tax on profit. If you pay it all out in salary and you are not a UK resident then you will not be liable.

 

[ska]

Ok but it wasn't my question sorry. I already know this... However I don't know if is it too aggressive what you're saying.

 

[MrYellow]

He answered all your questions nice. You just not understand the answer. There’s a difference. If you not understand simple answers I recommend you spend a few $ for a professional service to help you to avoid later ongoing problems. UK LLP will be your better option based on your requirements.

 

[ska]

I need a second entity for forming a UK LLP...
And to me it seems to aggressive to get all the profits as salary... UK HRMC wants to get some taxes... Am I wrong?

Why do you think UK LLP is better than UK LTD or Estonia OU? With UK LLP I need to be resident in a country with taxes just on territorial income, and I need to get a residency (which isn't always easy in every country). I think about Indonesia, Malesya or Thailand... But I want flexibility to travel.

 

[CaptK]

The LLP is the perfect structure for non resident directors. HMRC don't care where you are so long as you are not in the UK.

 

[ska]

Yes but i would have problems with bank accounts and I would have to be in a territorial tax country as a must.
Instead with Estonia company I can keep profits in the company and reinvest them. Also reputation would be more high.
And in the future if I decide to return to my EU country there won't be any problems, I will just pay taxes on my salary.

I speak for what I know, but I'm a newbie so please tell me if I'm wrong

 

[CaptK]

Yes but i would have problems with bank accounts and I would have to be in a territorial tax country as a must.
Instead with Estonia company I can keep profits in the company and reinvest them. Also reputation would be more high.
And in the future if I decide to return to my EU country there won't be any problems, I will just pay taxes on my salary.

I speak for what I know, but I'm a newbie so please tell me if I'm wrong

Bro LLP is the best way forward for you.

 

[dimitri]

Bro LLP is the best way forward for you.

Can you also explain why? I have a UK LTD. Started that without even thinking about a LLP. I also live in Asia. After reading the above I googled a lot, but for my situation I see no difference between a LTD and LLP.

 

[CaptK]

Can you also explain why? I have a UK LTD. Started that without even thinking about a LLP. I also live in Asia. After reading the above I googled a lot, but for my situation I see no difference between a LTD and LLP.

LTD by its nature is tax resident in the UK, which means you will have to invoice out all the money you have made or pay yourself salary for the profit.

Then your Territorial Tax won't work because you are being paid a salary which means you are actively engaging in work. Therefore you are not leaving those funds out of the country for a year and it should be passive income.

You could risk it but I don't see the point when those countries make it easy for you to follow the rules.

 

[dimitri]

LTD by its nature is tax resident in the UK, which means you will have to invoice out all the money you have made or pay yourself salary for the profit.

Then your Territorial Tax won't work because you are being paid a salary which means you are actively engaging in work. Therefore you are not leaving those funds out of the country for a year and it should be passive income.

You could risk it but I don't see the point when those countries make it easy for you to follow the rules.

This is all complicated. A grey area.

I live in Thailand. It's not allowed to work at all, not for a LTD, not for a LLP. You can get a visa if you find a local company wanting to hire you, or you can start a company in Thailand. But in all other cases work is not allowed.

Leaving the funds out of the country for a year is also something you can explain in many different ways, and impossible to check.

I now have a LTD. I am in Thailand about 7 months a year. 5 months a year I am in Europe where I work for my LTD. The LTD pays me a salary. That salary I put in a German bank account. The requirement that money must stay abroad for a year is vague. If I make 10k a year, and I have a bank account with 20k, and I spend 10k a year, let's say that I bring it into the country. Which money I am bringing into the country? Is it the old money that was in the bank account already, or the money I made this year?

Now they have to prove that in the 7 months a year that I stay in Thailand I am working behind my laptop. I will say that I am playing games. It will be difficult for them or for me to prove anything.

How would a LLP help me? After reading the above I googled. But it's not clear to me.

 

[CaptK]

If you speak to any international tax accountant they will tell you the same. As it's purely a pass through entity therefore for tax it is seen differently.

@Sols what would be your opinion on this?

 

[ska]

Hi guys, but how can I create an LLP? I need a second entity... What do you suggest to do?