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Will this work? UK Ltd for payment processing

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dotpedal

Active Member
Nov 22, 2016
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#1
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Hi, I just moved to Panama.

Would it work to form a UK LTD to process payments on PayPal/stripe that provides payment processing services to a BVI company? The UK LTD would send 99% of revenue to the BVI company at the end of every week.

Would the UK Ltd need to charge VAT to Eu customers? Any way to get around this? I heard people can put their BVI company info on website to get around charging VAT.
 
#2
dotpedal said:
Hi, I just moved to Panama.

Would it work to form a UK LTD to process payments on PayPal/stripe that provides payment processing services to a BVI company? The UK LTD would send 99% of revenue to the BVI company at the end of every week.

Would the UK Ltd need to charge VAT to Eu customers? Any way to get around this? I heard people can put their BVI company info on website to get around charging VAT.
Click to expand...
Second that. I also want to know.
 
#3
Is this a question about payment processing and how to find it or is it about VAT ?
 
#5
Are you asking if it's possible or if it's legal?

Yes, it's possible to set up a company like this and the company itself is legal. You may violate the terms and conditions of payment processors by not having a presence in the UK/EU, but some don't care as long as you don't incur too many chargebacks and raise any alarms.

It's also possible to avoid VAT this way but it's not legal. EU VAT is complicated but generally speaking if you provide goods or services to the EU, you must pay EU VAT once you reach the relevant thresholds - regardless of where or whether you are incorporated. The EU isn't yet going after everyone who violates this and will probably start with the big fish.

In your case, the UK company should not be the company which provides services to the customers. Structure your terms of services and supply and delivery chain accordingly. You may want to look for a more lenient jurisdiction than UK for this, though.

This structure should also let your UK company return all of its revenue to the Panama parent and leave as little as possible in UK for subject to tax. Although it's considered good practice to leave a tiny bit in the company as a service charge on which it pays corporate income tax.
 
#6
Sols said:
Are you asking if it's possible or if it's legal?

Yes, it's possible to set up a company like this and the company itself is legal. You may violate the terms and conditions of payment processors by not having a presence in the UK/EU, but some don't care as long as you don't incur too many chargebacks and raise any alarms.

It's also possible to avoid VAT this way but it's not legal. EU VAT is complicated but generally speaking if you provide goods or services to the EU, you must pay EU VAT once you reach the relevant thresholds - regardless of where or whether you are incorporated. The EU isn't yet going after everyone who violates this and will probably start with the big fish.

In your case, the UK company should not be the company which provides services to the customers. Structure your terms of services and supply and delivery chain accordingly. You may want to look for a more lenient jurisdiction than UK for this, though.

This structure should also let your UK company return all of its revenue to the Panama parent and leave as little as possible in UK for subject to tax. Although it's considered good practice to leave a tiny bit in the company as a service charge on which it pays corporate income tax.
Click to expand...
Sols are you able to help little with mentioned setup? I've been fool for years thinking paying taxes in my country will give me gov protection. Looking for a mentioned setup to connect with my US LLC which is currently unable to gain cards processor for EU or US customers
 
#7
Admin said:
Is this a question about payment processing and how to find it or is it about VAT ?
Click to expand...
It is about VAT

W
Sols said:
Are you asking if it's possible or if it's legal?

Yes, it's possible to set up a company like this and the company itself is legal. You may violate the terms and conditions of payment processors by not having a presence in the UK/EU, but some don't care as long as you don't incur too many chargebacks and raise any alarms.

It's also possible to avoid VAT this way but it's not legal. EU VAT is complicated but generally speaking if you provide goods or services to the EU, you must pay EU VAT once you reach the relevant thresholds - regardless of where or whether you are incorporated. The EU isn't yet going after everyone who violates this and will probably start with the big fish.

In your case, the UK company should not be the company which provides services to the customers. Structure your terms of services and supply and delivery chain accordingly. You may want to look for a more lenient jurisdiction than UK for this, though.

This structure should also let your UK company return all of its revenue to the Panama parent and leave as little as possible in UK for subject to tax. Although it's considered good practice to leave a tiny bit in the company as a service charge on which it pays corporate income tax.
Click to expand...
Which jurisdictions would you recommend for this instead of UK? "You may want to look for a more lenient jurisdiction than UK for this, though."
 
#17
dotpedal said:
Which jurisdictions would you recommend for this instead of UK?
Click to expand...
Ireland, Cyprus, probably others as well but you need to speak with a local tax lawyer and accountant
 
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