UK proxy investment structure

[Onassis]

Hi all,

Would it be possible to use a UK limited company as a proxy for investments done on behalf of a 3rd party?

Let me explain: a person sets up a UK LTD that he is the UBO, shareholder and director of. The company receives funds (as a loan?) from a 3rd party (a foundation in this case) and uses the funds to invest in other companies. This way the shares would essentially be held by the UK LTD on behalf of the foundation. Dividends would flow back to the foundation if possible, minus a commission if necessary.

Any idea how to structure this? Thanks.

 

[Martin Everson]

So pure holding activity? Nothing wrong with doing this with a UK company. Just make sure the UK company has Economic substance in UK if you intend to interact with EU for example.

Which country is the money coming from?

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[Onassis]

Martin Everson said:
So pure holding activity?
Click to expand...

Kind of. The entity providing the funds would ideally have some kind of a lien against shares held by the UK LTD. Not sure if that's possible or not?

Martin Everson said:
Which country is the money coming from?
Click to expand...

US/Puerto Rico

Last edited: May 7, 2023

 

[Martin Everson]

Both US and UK are high tax countries so it cannot really be argued its a artificial arrangement under GAAR for the purpose of obtaining tax advantage. That is also as long as both company and foundation do not have common control and everything is done at arms length and loan is on commercial terms in line with market.

However if you are a US Person and there is common control between both entities go get tax advice. If there is common control in general go get tax advice also.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.