Where to set up a company as a web designer?

[Witcher]

Hey guys,

Stumbled upon this forum today, good stuff!

I'm thinking of incorporating an off-shore company so wanted to ask you for some input.
I have an EU passport, doing web design and moving often. In the last three years longest I've been at one place was 9 months. In EU countries I didn't spend more than 180 days in those three years. If all goes well, I'll be staying most of the time in India so I'll be a tax resident over there, in a country where no one gives a flying-you-kow-what about digging thru your incoming foreign money transfers(provided they are modest) Hence, not worried that much about tax because all of that.
However, I do need a company so that I can invoice clients and I don't want it in my home country.
I don't need a bank acc, EMI would do as long as they offer what, for example, Transferwise offers- a business account.

Based on mentioned info, which offshore jurisdiction would you recommend?

Cyprus would be, kind of, a logical choice but initial setup costs are high compared to some other jurisdictions. Whats up with Seychelles? I've read here that some EMIs are refusing to open business accounts for Seychelles based companies and that EU companies might not be very happy with invoices coming from a Seychelles based company..?

Basically, I'm looking to spend up to 1000 EUR for incorporation and be able to register a business account with an EMI without any fuss.
Sooo, any suggestions?

 

[JohnLocke]

I would say a UK company would be a good choice that give you the chance to open a hassle free EMI account and you don't have to spend that much money.

The problem with Seychelles & Belize is that I have not been able to find any EMI that will accept them and which is offering IBAN transfer + IBAN account numbers in the company name.

 

[Witcher]

I would say a UK company would be a good choice that give you the chance to open a hassle free EMI account and you don't have to spend that much money.

Hey Admin, thanx for the input!

Hm, I didn't look into UK option in detail but I did see a quote on one website and it was more expensive than Cyprus. Not in that 1000 EUR bracket I've mentioned. If nothing else I'll pay some more and consider it as a cost of doing business but generally I would prefer to keep initial costs as low as possible.
Does the UK option work like most of offshore setups where you can sort it out thru an agent, no need to show up there?

The problem with Seychelles & Belize is that I have not been able to find any EMI that will accept them and which is offering IBAN transfer + IBAN account numbers in the company name.

What about Cyprus&EMIs? As it is within EU and SEPA, I suppose it should work, EMIs shouldn't make a fuss about it. Any experience with that option?

 

[TurnedToRobot]

You want to have a look here Rapid Formations | Company Formation and Registration £4.49 less than £20 to get setup. All fine, using this service almost every day with great success

 

[JohnLocke]

I have been using Rapid formation in the past also with great success.

 

[Witcher]

You want to have a look here Rapid Formations | Company Formation and Registration £4.49 less than £20 to get setup. All fine, using this service almost every day with great success

Damn, man, thanks!
125 quids for a non res company sounds good.
Thanks guys!

What is then the difference in terms UK vs Cyprus?
If I got it right, Cyprus would be better if I wanted to hide my a*s behind nominees and what not but if the privacy in not that important then UK is both cheaper and probably easier to get an EMI acc and even a real bank acc if it would be necessary in the future. Anything else, am I missing something?

 

[GrumpyMess]

Anything else, am I missing something?

The running costs of UK company are lower, but the tax burden is much higher.

 

[Witcher]

The running costs of UK company are lower, but the tax burden is much higher.

Yeah, that's what I'll google now. Seems that even if you wouldn't do any business in the UK you would still need to pay some tax over there, while in Cyprus you don't pay any if the company isn't doing any business in the country.
Anyone has any experience or info on the UK non-resident company and tax? Admin, any input on this topic?

 

[Witcher]

According to PwC: "A non-resident company is subject to UK corporation tax only on the trading profits of a UK PE or the trading profits attributable to a trade of dealing in or developing UK land (irrespective of whether there is a UK PE). Any other UK-source income received by a non-resident company is subject to UK income tax at the basic rate, currently 20%, without any allowances (subject to any relief offered by a DTT, if applicable). This charge most commonly arises in relation to UK rental income earned by a non-resident landlord (NRL)."

If I got this right, simply avoid doing business with any British company and you don't have to pay any tax to Her Majesty... That sound doable.

 

[fshore]

According to PwC: "A non-resident company is subject to UK corporation tax only on the trading profits of a UK PE or the trading profits attributable to a trade of dealing in or developing UK land (irrespective of whether there is a UK PE). Any other UK-source income received by a non-resident company is subject to UK income tax at the basic rate, currently 20%, without any allowances (subject to any relief offered by a DTT, if applicable). This charge most commonly arises in relation to UK rental income earned by a non-resident landlord (NRL)."

If I got this right, simply avoid doing business with any British company and you don't have to pay any tax to Her Majesty... That sound doable.

A UK Ltd company is resident in the UK.

 

[myhand]

You want to look at your budget. I know for sure a fully legit setup Cyprus company is easier to navigate thru the tax s**t than a UK company is. You can get accounting and filing of tax reports in Cyprus for say 3k euro a year and you won't need to pay any tax or only a few percentage if done right.

In the UK you may have at a minimum the same costs for accounting and filing of tax reports but you will have to pay much more in taxes.

Otherwise you steup the entire thing with darks in the UK and forget about the company after 1 year but that's a complete different story and not long term.

 

[Witcher]

Yeah, after a bit of research, seems that you need to pay the tax in the UK no matter what so that's a no go.

Then Cyprus I guess...or one of the exotic ones. Just sent an email to Transferwise asking whats up with business acc if the company is registered at some exotic place. Will post the reply when I get it.

You can get accounting and filing of tax reports in Cyprus for say 3k euro a year and you won't need to pay any tax or only a few percentage if done right.

That's in case you're doing business within Cyprus, aye?
As a non res in Cyprus case the tax on their side is 0 if you don't do any business over there(as far as I know)
And any other side where I might be at a particular moment is not a concern because of the reasons I mentioned in the first post. That would mean the costs would actually drop significantly, isn't it?

 

[GrumpyMess]

I know for sure a fully legit setup Cyprus company is easier to navigate thru the tax s**t than a UK company is. You can get accounting and filing of tax reports in Cyprus for say 3k euro a year and you won't need to pay any tax or only a few percentage if done right.

Is this a setup with non-Cyprus nominees?
How about of "A Cyprus Non - Tax Resident Company is also required to submit tax returns, indicate that the tax return relates to a Non-Tax Resident Company, and also mention in which country it will be taxed. All companies are required to be a tax resident somewhere."?

 

[fshore]

With a UK limited company you can draw a salary, this salary will not be taxable in the UK if you are not UK resident. So you can avoid UK corporate tax if your salary will reduce the company profit to 0.

 

[Witcher]

With a UK limited company you can draw a salary, this salary will not be taxable in the UK if you are not UK resident. So you can avoid UK corporate tax if your salary will reduce the company profit to 0.

I looked into it a bit more thou I need to do more thorough research next week when offices open again.
It seems that another option in the UK setup would be to incorporate a LLP instead of a LTD. Sums up to this: "Because an LLP is a tax neutral entity, this exemption also applies to foreign-sourced income generated through one. This means that, in practice, it is possible to run an LLP without having to pay any UK taxes, provided that there is no UK-sourced income and that all partners are non-residents."

 

[Witcher]

Some more on LLP Taxasion and non res status...interesting...

"Potentially UK LLP with two members being offshore companies will not pay any Corporation Tax or personal income tax in the UK, if members or directors of offshore companies are non-UK residents; no trade is made in and with the UK; control over UK LLP is exercised overseas. It is possible that UK LLP tax liability will be zero.
UK non-resident member only pay personal income tax in UK on the profits gained from trade within the UK. UK LLP members may also take advantage of more than 100 double taxation treaties signed by UK.
The UK LLP (Limited Liability Partnership) with all partners (members) being non-UK residents should only enter the profits from UK operations on their income tax returns; therefore if there was no UK trade, the UK LLP Tax return is submitted blank."