Offshore Business Structure

[dmb_biz]

I'm a programmer in the very early stages of building a business. Before I launch I will obviously get advice from the appropriate professionals but for now I would like some advice as to whether my plan is completely stupid or not.

So, if I incorporate a company I would like to have my involvement so anonymous as possible (I'm fine with the government knowing my business, I just don't want my information to be public). As I understand it when forming a UK Limited Company, you can have nominee directors and nominee shareholders. So I could appoint a nominee director but I'm not sure about trusting a nominee shareholder with full ownership over my company. So I'm thinking could I setup a company offshore, say in Belize or the Seychelles where there are no public registers as a holding company and have that company be a shareholder in the UK Limited Company? Is this legal? What would be the tax implications of this, both for the company and me as an employee/shareholder of the company? Would I also be able to use the profits from the UK Limited Company to fund the holding company and create new companies under the holding company?

 

[Mark T Jones]

Beyond tax, you need to consider the legal and administrative costs associated.

Also, depending on what the business does, you will likely struggle to get credit or trade accounts

 

[Gyumri]

Off shore companies like those registered in the BVI can hold shares in a UK company and as shareholders draw the dividends. I think the law is changing however and there is now a register to disclose the true beneficiaries of such entities.

 

[WaveJumper]

!, it's pretty costly to operate an offshore company / holdings etc, so unless you're going to be making very considerable amounts of money in my opinion you're just going to tie yourself up in knots.
2, You're still going to get taxed & I think as mentioned already HMRC are pretty switched onto these things now, the more you try to hide it seems the more they like to look and as a close friend of mine will contest to end up writing some pretty hefty cheques.

The one big question is why do you want to go to all this trouble to hide your identity and stay anonymous, is this really going to help your business plans

 

[fantheflames]

I think offshore would hide your identity as they're usually private.

I would speak to an offshore specialist to sort that out for you, and not on these forums.

You can use a nominee director, but this will be a very difficult task.

As others have said, will remaining anonymous or using an offshore account disrupt your business?

I think there's a good chance of that.

 

[SillyBill]

Providing you want it 99% anonymous to anyone other than a hired detective I'd recommend the Isle of Man. Easy to do business, strong and similar legal system, English and close enough to pop over there to see an accountant or solitcitor every year or 2 if needs be. 2-3 companies with you sitting at the top of the tree of the holding company or something or other would be more than adequate to shield from most prying UK eyes. With a "paid" director (cost £1000/year per company was going rate when I looked at it) on the island for proof of MoC taking place on the island. No corp tax obviously so gives you some flexibility of what you do with earnings ultimately. Repatriate money to UK and pay your income/divi taxes here or you can keep the money in the business untaxed and build up a kitty with a view to the sale exit. If someone does buy the IoM company off you and you have left money in it then they buy the cash + business and you ultimately extract your earnings by paying CGT with entrepeneurs tax rate relief, so take your money out at a 10% effective tax rate. I'd probably register a IoM business if starting out now, albeit for different reasons to you. Costs to adminster this set up need to be factored in though, needs to be a reasonable sized business to justify.

 

[AndreasC]

Using a nominee shareholder would not work as under the Persons of Significant Control rules you have to declare at Companies House who the ultimate beneficial (not just legal) owner of the Ltd company is. If a company is controlled by a foreign company that does not contain a public register then you have to state who owns or controls that company

People with significant control (PSCs)

How to identify and record the people who own or control your company.

www.gov.uk