Left UK, now Looking for Ideal Jurisdiction to Incorporate Consulting Company
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Now you've gone and done it! My dad was actually raised in Guernsey and my wife fell in love with it when i took for her for our honeymoon - it seemed quite opaque a system to get your head around, but I was confusing this maybe with residency requirements.
Checking now it's 0% tax on foreign sourced income, but I'm seeing a lot of chatter about how economic substance requirements, which consulting would absolutely fall within:
But this could definitely be a contender for not going back to︅ england long term! Won't tell my wife as it would become a certainty!!
Checking now it's 0% tax on foreign sourced income, but I'm seeing a lot of chatter about how economic substance requirements, which consulting would absolutely fall within:
a. Substance Requirements
- Guernsey has implemented economic substance requirements to comply with international tax standards (e.g., OECD and EU rules).
- If your Guernsey company is considered a︀ relevant entity (e.g., it conducts certain types of business activities), it must demonstrate economic substance︁ in Guernsey. This may involve:
- Having a physical office.
- Employing staff in Guernsey.
- Conducting management︂ and control activities in Guernsey.
- Having a physical office.
- If your company does not meet these requirements, it could︃ face penalties or be deemed non-compliant.
But this could definitely be a contender for not going back to︅ england long term! Won't tell my wife as it would become a certainty!!
I lived in Cyprus in 2012 and that bail-in indeed caused issues, BUT keep one thing in mind; having a company there is one thing. It doesnt mean that you have to bank there. All companies that had non-cyprus banks were not affected. It's in that sense always better to never bet on one horse 😉
Re substance and presence; just keep in mind that those requirements are everywhere and︀ if they are not yet enforced that will change over the next couple of years.︁
Pick a place where you would be able to fulfil the substance / presence requirements︂ yourself. Especially if your numbers are not high enough.
Re substance and presence; just keep in mind that those requirements are everywhere and︀ if they are not yet enforced that will change over the next couple of years.︁
Pick a place where you would be able to fulfil the substance / presence requirements︂ yourself. Especially if your numbers are not high enough.
Wow
very good point - when you︁ start to look into moving abroad and optimising strategies, you often do an all or︂ nothing approach, whereas both the US suggestion and Cyprus show that you can potentially pick︃ what works.
I guess i need to do a lot more research as I was︄ only starting to get my head around personal taxation, now companies add all sorts of︅ nuance!
My only concern is whether another country would allow a bank account for a︆ foreign company without a presence in that country too... which again starts to get very︇ complex
Other option, like i said is to just ensure that the Cypriot account pays︈ out dividends rather swiftly. Kind of in the same way one uses a crypto exchange︉ intermittently, and in full knowledge it might blow up tomorrow!
very good point - when you︁ start to look into moving abroad and optimising strategies, you often do an all or︂ nothing approach, whereas both the US suggestion and Cyprus show that you can potentially pick︃ what works.
I guess i need to do a lot more research as I was︄ only starting to get my head around personal taxation, now companies add all sorts of︅ nuance!
My only concern is whether another country would allow a bank account for a︆ foreign company without a presence in that country too... which again starts to get very︇ complex
Other option, like i said is to just ensure that the Cypriot account pays︈ out dividends rather swiftly. Kind of in the same way one uses a crypto exchange︉ intermittently, and in full knowledge it might blow up tomorrow!
No. Unless you explicitly want your company to pay tax in the US as a corporation, but why would you want that?
You pay zero tax in the US if the LLC is tax-transparent.
See my detailed explanation here:
I don't think this will change.︉ If you don't work physically in the US, it should work well.
You pay zero tax in the US if the LLC is tax-transparent.
See my detailed explanation here:
I don't think this will change.︉ If you don't work physically in the US, it should work well.
Be careful with excessive dividend payments. I mean︃ with that on a monthly basis.
It is a clear sign that something shady is︄ going on.
Normal dividend intervals are quarterly, bi annually or annually. If paying more than︅ once a year after finishing your accounts it is often an interim dividend. From legal︆ perspective that means it’s not a final payment and that means that in the case︇ of investigations it could be clawed back. If you then cannot pay it immediately extends︈ liability to you as a person as well.
Dividend are NOT the holy grail when︉ you operate in a shady area.
It is a clear sign that something shady is︄ going on.
Normal dividend intervals are quarterly, bi annually or annually. If paying more than︅ once a year after finishing your accounts it is often an interim dividend. From legal︆ perspective that means it’s not a final payment and that means that in the case︇ of investigations it could be clawed back. If you then cannot pay it immediately extends︈ liability to you as a person as well.
Dividend are NOT the holy grail when︉ you operate in a shady area.
thanks - I've had a look at your very detailed︅ post and it's very intriguing (actually, I fell down the non-resident UK company rabbit hole,︆ but I don't trust HMRC one bit haha). Will pick through it properly this week︇ but just wanted to say I appreciate it - makes the US very interesting.
You're very welcome.
US LLCs are super simple to set up. You can use a service like Northwest Registered Agent or IncFile, it's about $150 or so.
If nothing happens in the US, the annual paperwork is usually minimal, so you can either do it yourself or pay someone $300-500 a year to handle it.
If you live in a country︀ that doesn't have taxes (Caribbean, Bahrain, ...) or that doesn't really care (LatAm, Southeast Asia,︁ Africa, ...), it's a simple, cheap and tax-free setup with relatively easy access to banking.︂
US LLCs are super simple to set up. You can use a service like Northwest Registered Agent or IncFile, it's about $150 or so.
If nothing happens in the US, the annual paperwork is usually minimal, so you can either do it yourself or pay someone $300-500 a year to handle it.
If you live in a country︀ that doesn't have taxes (Caribbean, Bahrain, ...) or that doesn't really care (LatAm, Southeast Asia,︁ Africa, ...), it's a simple, cheap and tax-free setup with relatively easy access to banking.︂
Salary / Management fee.
Excessive dividends, which happens in sme's, are always scrutinised because of dodging taxes.
Owh and keep in mind that consulting companies in general struggle to quickly and easy open a bankaccount. Have a proper business plan available when applying. It's likely the first question you receive.
Excessive dividends, which happens in sme's, are always scrutinised because of dodging taxes.
Owh and keep in mind that consulting companies in general struggle to quickly and easy open a bankaccount. Have a proper business plan available when applying. It's likely the first question you receive.
Thanks again for the recommendations. I suppose my wife will want me to ask, what happens when we move back to the UK? Is︀ there a way to pass this through to another company perhaps in a favourable jurisdiction︁ and leave it to accrue for the next time I'm based somewhere more favourably?
Thanks so much for this! Shouldn't be an issue only taking a salary when I'm in a favourable residency location! Great advice about the consultancy too! I imagine this will be even harder given that I'm not a US citizen / resident? They normally ask for social security or ITN︀ but I did manage to get a personal bank account sorted without!
I guess the main problem is how to avoid that company to become tax resident where you live. Hence you would need substance somewhere to avoid the problems. Maybe Malta 5% option with local substance would be an option? Or you use Hong Kong / Singapore / UAE with a resident director and pay taxes there. Still a bit risky.
The problem is that if you perform the work from the country where you live, it will be considered a permanent establishment which will be taxable there. Then, the problem is that the flat tax is only for foreign income which is no longer the case if you have a permanent establishment. Hence, you would have to incorporate in a low / no tax jurisdiction with a director and minimal substance there and then draw dividends. In that case, it would work.
There is waay more variables that this depends on besides what you said.
Number one would IMO be the question WHY you want to cash out? Where is the money going - both currency and then what you want to use the money for, what are you planning to buy or is it just that you want to keep it in fiat︀ - then which one?
Number one would IMO be the question WHY you want to cash out? Where is the money going - both currency and then what you want to use the money for, what are you planning to buy or is it just that you want to keep it in fiat︀ - then which one?
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