Where would be my best option?

[EdMonk]

Hi.

I could really do with some guidance here, please.

I am a UK resident‌ and plan to sell my product via the internet.

My market research indicates that most‍ of my sales will come from the US, UK, EU, Australia and Canada. I have⁠ locally sourced manufacturing in these countries for about 50% of my product, the other 50%⁤ will be produced in the USA and shipped worldwide.
Estimated sales by region:

• USA 45%⁣
  
• UK 30%
  
• EU 17%
  
• Australia & Canada 5%
  

I want to minimise my UK corporation⁢ tax so I am thinking about an offshore company. Said company has no employees as︀ all my manufacturing is sub-contracted out.

My question is. Where would I be best locating︁ my operation to minimise my tax liabilities?

I appreciate any help offered here

Thank you︂

 

[Sols]

As long as you continue living in the UK, any company that you control becomes‌ UK tax resident. You'll need to pack your bags and relocate somewhere with a more‍ favorable tax regime if you actually want to save on taxes in a legal and⁠ sustainable way. It's either that or set up a company offshore, hire people there, and⁤ establish a proper economic substance so that you can demonstrate to the HMRC that the⁣ company isn't under you day to day control.

 

[CyprusLawyer101]

If you ditch your UK sales part of your business, you could set up offshore‌ and avoid the Uk CFC charge.

 

[EdMonk]

Thank you both. So if I drop the UK sales would the US be a‌ good option? Or would I get hit for tax there also?

 

[Martin Everson]

Like Sols said if you remain in UK then there is no option other than‌ forking out for a complete arms distance setup. Where your customers are located makes zero‍ difference.

 

[AMD]

Does someone know how pity the HMRC is when it comes to demonstrate the substance‌ in the company ?

 

[Martin Everson]

HMRC have no mercy like your‍ the pillar that Tong Po is kicking from Bloodsport when it comes to medium size⁠ businesses. Unless you respond with legal council like multinationals do they are not gonna listen⁤ to a word you say. It will be a one way conversation. You would be⁣ best to seek legal opinion over any setup before embarking on its use in UK.⁢

 

[AMD]

I thought it already would be like that. So better⁤ find someone to help you before you setup things like described above in the UK.⁣