Where should British Residents form an Offshore Company?

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What is the best place for British citizens/residents to form an offshore company?
This is going to be very useful at the moment because the UK just announced that they're rising their corporate tax rates.

The UK has a particular set of rules that can be very useful. There are two challenging areas to be careful about. What should you look at and what should you consider if you're a Brit looking to form a company abroad? Today we are going to cover all of that.

The number one thing to look at is corporate residency rules. This is related to management and control standards. By default, if the company is registered in the UK it will be a tax resident of the UK, in certain cases, this can be overwritten by a tax treaty. Also if your company is managed and controlled from the UK it is considered a UK tax resident.
This is extremely important to pay attention to!

You could have actual substance in a foreign country (offices, employees, operations, etc) but if your company is managed and controlled from the UK you can face issues because the UK will want to tax that company.

The second set of rules to be careful about is the controlled foreign company rules (CFC Rules). If you're a small business you shouldn't have any issues. If you're bigger than what they consider small business you'll need to pay attention to these rules as well. If you own at least 25% of the foreign company that share will be taxed according to the UK corporate tax rate.

Having all this in mind what does make sense for UK residents? Which countries should you consider for a company structure?

Places that make sense are Cyprus, UAE, Hungary, Malta, Channel Islands, Isle of Man.

If you were to opt-in for the latter two they can provide management and control locally. Banking is not going to be the greatest in there, but certainly doable.

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Author: Michael Rosmer

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