The Cross Border Trading Package

A proven route for cross border trading is through a UK limited company, who acts as agents for a company in a low tax jurisdiction. The principal in a low tax jurisdiction takes most of the profit, but only trades through its agent: the UK company.

A UK limited company is a normal "onshore" company, covered by multiple tax treaties. If you are based outside the UK, or are resident outside the UK and in a country which has a double tax treaty with the UK, the following package could mean that you pay minimal tax on a large volume of international trade.

This package is proven; the UK tax authorities approve of it as does the US Revenue Service. The UK company represents the international trading operations as agents for the company in the low tax jurisdiction.

The cost of the entire package depends on the choice of low tax company. This basically what ie required and this list can be shortened, depending on circumstances.

These are two companies are linked by an agency agreement, we draft the agency agreement, this has a minimal cost.

As with all our clients, we will guide you through the incorporation steps and you can trade within a few days.

UK - Offshore Trading Package

Trading within the UK

No - The Seychelles company, should not conduct any activity within the UK, because the agency agreement will state that the UK company has the right to trade in a 'territory' which excludes the UK. If they do trade with UK businesses, there may be VAT problems as well as pressure from UK tax authorities to look-through the agency structure.

I want the UK company to trade occasionally with other UK companies, without having VAT or Corporation Tax problems?

The UK company can do all the dealing with their UK clients.

Certificate of Tax Residency

A UK company which operates in the UK can get a certificate of tax residency.

Should the UK company transfer the profit to the Seychelles company bank account immediately after every business transaction or once a year only?

The terms of transfer of funds from the UK company to the principal will depend on the agency agreement entered into. It can be done every month, quarterly or once a year.

Should the Seychelles company send an invoice to the UK company to support transfer of the profit?

The agency agreement will support the payments made to the offshore principal, however, the Seychelles company can certainly issue a specific invoice.

Advantages

• Ideal for use as a European trading structure where the receipt of invoices from an Seychelles company would not be acceptable.
• Excellent for situations where an onshore profile is required but where offshore tax treatment is desired.

Taxation/Accounts

The UK company pays UK Corporation Tax on its commission although all allowable expenses incurred in carrying out its business will be deducted first. The ultimate success of this type of structure relies on the fact there is no UK source income. This, in conjunction with the fact that the company is being controlled and managed from outside the UK, means that the UK Inland Revenue can only assess the UK company for tax on the fees it earns by way of commission for effecting the business of the Seychelles company. The payments made to the Seychelles company by customers are therefore not subject to UK taxes. Usually a commission of between 5% and 10% would be arranged which would mean that, on average, the effective rate of tax would be around 1.2% on a total turnover of £100,000 which would reduce on turnover above this.