UK Nominee Company

The basic idea is for the UK company to agree to transact business on behalf of an undisclosed offshore company. The company normally used is a British Virgin Island Company or a Gibraltar Company.

This agreement must be in writing. Business will then be contracted for by the UK company on behalf of the offshore company. Gross income of the offshore company will be received in the bank account of the UK company and subsequently remitted to the offshore company, less a commission for the use of its services, normally 5% of turnover. The UK company only pays corporation tax on its own income, the commission received; the remainder of the income passes to the offshore company free of corporation tax.It is preferable that the offshore company is managed and controlled outside the UK and it is also preferable that the UK company's directors reside outside the UK. There should be no trading in the UK and all contracts signed by the UK company on behalf of the offshore company must be signed outside the UK. A company must register for VAT if its turnover is in excess of £ 50,000 within the EU. The company may register before it reaches this turnover, if it wishes to make any reclaims of VAT. If the UK nominee company is supplying, as a nominee, services to a third party outside the UK, the supply will be zero-rated if the services fall within certain categories such us advertising, consulting, engineering, legal and accounting services, transfers and assignments of intellectual property rights, the supply of staff, banking, financial and insurance services, and certain kinds of transport.

If the UK company is supplying goods as nominee it will need to charge VAT on a supply to a third party in an EU member state unless that third party is itself registered for VAT in the EU and provides its VAT number to the UK company. Where the goods are supplied to a third party outside the EU the supply will not be subject to VAT. It is also important to note that VAT will be chargeable on the UK company's fees invoiced to its offshore principal for its services as agent.

Who Should use international solutions?

International Investors
International companies can act as holding areas for investments made in a number of different markets and countries. You can collect all your investments together and have one offshore company hold legal ownership of them all. Personal holding companies can provide privacy and may save you the professional fees and other costs associated with setting up and maintaining a number of different offshore structures. International entities allow your portfolio access a variety of quality investment options that improve diversification and reduce risk. Investors regularly use international companies in personal portfolios for inheritance planning and to reduce the costs and time delays of probate. Investors with more than $100,000 in capital should use a Foundation Legal Structure to become exempt from the foreign income reporting rules.

Entrepreneurs
Businesses who start off with an international structure can receive strategic benefits. Offshore offers entrepreneurs enhanced investment returns, access to global markets, better after-tax profits, and improved risk mitigation. An international vehicle can own corporate assets without exposing the entrepreneur's personal assets - this also reduces business risk. As well, if an entrepreneur structures his or her new venture offshore, it will survive the life of the original entrepreneur and simplify the succession process.

Executives
Executives can use international solutions for various aspects of their corporate agendas. These solutions can also help them restructure their compensation and stock programs so as to take advantage of reduced tax, asset protection, and access to global markets.

Consultants
Individuals can elect to become an independent contractor with nearly all employers, including many Government positions. This would stop most source deductions, and free up the tax planning to allow many business expenses that employees are not entitled to. It also allows contracting with an IBC to increase work-related expenses, and send the profits overseas.

Entertainers and Authors
If entertainers and authors properly structure an international corporation to receive their contracts, they can reduce tax they would otherwise owe. The offshore corporation earns income, and the entertainer or author is compensated for services rendered to that company.

Athletes
Athletes can use international benefits in the same way entertainers and authors can. By properly arranging personal and compensation contracts with an international corporation, athletes can reduce the amount of tax they would otherwise owe onshore. Since the international corporation earns the income, the athlete is compensated for services rendered to that company.

Owners of Intellectual Property
By assigning intellectual property rights and innovation rights to an international corporation, inventors, engineers, and designers can ensure revenue and royalties are received through an offshore corporation (as the owner of such rights) rather than have these revenues come to them personally. This reduces their personal tax obligation and protects their assets. Also, the intellectual property can remain offshore indefinitely, surviving the life of the original inventor. The inventor can easily specify the succession of what would otherwise have been his or her intellectual property rights.

Other Professionals
Contracts for professional services often use international vehicles. Medical practitioners and other professionals use this technique to effectively restructure how their income is generated and realized, which reduces the personal tax they owe. Offshore vehicles also protect personal assets from professional business risks and malpractice claims.

Individuals with Inherited Wealth
Individuals who inherit wealth can use international structures to reduce their inheritance taxes by converting the inheritance money in low- to no-tax jurisdictions instead of high-tax jurisdictions. They can also restructure the income their inherited portfolio generates so as to protect their assets and so that the income compounds tax free. If you structure your pre-inheritance wealth, it will simplify the succession process. International structures can introduce you to a whole new world of investment opportunities with superior tax advantages.