Managed UK & Irish Companies

Why Irish & UK Limited Companies are used to trade in Europe

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The principal reason that Irish & British companies are popular in Europe is down to a number of reasons; but in particular their popularity is due to the fact that Irish & British corporate taxes are low whilst limited companies do not need to be capitalized as is required by law in all civil law countries from Portugal in the South to Sweden in the Far North. This, plus the fact that UK companies can be formed electronically in hours (In Ireland the incorporation process takes 5-10 days but can be executed online) and further that European Union (ECU) Directives/Regulations prevent discrimination against any ECU company operating within another ECU country make UK and Irish companies very attractive.

Benefits

Ireland & The UK have very low corporate taxes (As little as 12.5% & 19% respectively)

Irish & British Limited Companies do not need to be capitalized before starting to trade

Legal and Incorporation Fees are a fraction of those in most civil law countries

The legal documents (known as the Memorandum & Articles of Association) can be pre-apostilled under the Hague Convention and pre-translated into most main European languages

Although trading will normally take place exclusively through the local branch / succursale / zweignniederlassung the governing law is that of either the UK or Ireland which is generally considered to be more corporate friendly than that in civil law countries

The overall cost is generally many €1,000s less than if a German gessellschaft mit beschränkter (GmbH) or French société à responsabilité limitée (Sàrl) were formed and capitalized.

Understanding Why and How Irish & British Branches Work

All Irish & British limited companies are deemed tax resident in Ireland or The UK unless covered by a Double Taxation Treaty (DTT) - It is a common misconception that UK companies trading outside the UK do not need to adhere to UK domestic company laws. This is not true, ALL Irish & British companies need to maintain Irish or British accounts, make submissions to the Revenue Commissioners/Inland Revenue and reply to standard statutory enquiries from The Companies Registration Office/Companies House. However, if for example the Irish/British limited company has a branch/succursale/zweignniederlassung in Germany then the zweignniederlassung under the DTT will be subject to German taxes but controlled by Irish or British laws. Thus, if the UK company does not trade in Ireland/UK but has an active branch in Germany only German taxes will apply. In this scenario, the following "Options" would be required:

The appointment of an accountant plus the maintenance of accounts for the German zweignniederlassung's which must be maintained and submitted to the Inland Revenue at the end of each financial year (The Form is known as a CT600 Form).

The completion and submission of the Annual Return Form 363 (Included in the Full Secretarial Service).

The apostilling and translation of the UK limited company legal documents (known as the Memorandum and Articles of Association) into German for submission to the German authorize registering the zweignniederlassung

Using Managed Irish or British Limited Companies to trade Directly with Europe

Such companies are used by Continental Europeans because apart from the low cost of registering a UK [Irish limited companies are more expensive but not nearly as expensive as registering a German gessellschaft mit beschrankter (gumbo)] limited company the UK also has much lower corporate taxes (starting from around 16% p.a. or 12.5% in Ireland) and social taxes. Again, such trading companies cannot be discriminated against in Germany or other parts of the ECU but to be accepted hey must show MANAGEMENT & CONTROL in the UK and NOT GERMANY. To do this the company must be registered for VAT and be really managed in the UK by, for example, our in-house accountants. Thus service legally requires us to operate a UK bank account and make quarterly VAT returns to the Government (Customs & Excise). Cost wise, a FULLY MANAGED UK company will cost a few thousand € each year but can save €10,000s compared to running a German Gumbo or French Serial.

Anti-avoidance provisions and the benefits of using Managed and Controlled Irish or British limited Companies

Unlike tax havens, it is almost impossible for either the French, German or other investigating tax authorities to discriminate against properly managed Irish or British companies for the very simple reason that both are highly respectable European Union countries. The only issues that can technically be raised relate to proving that there is a genuine business reason other than simple tax mitigation - Obviously, this burden can normally be easily satisfied due to the importance and size of the countries involved but it cannot be over-stressed that full and proper management must take place in the UK or Ireland to derive these benefits.

 

Why use Starting My Business?

Starting My Business Limited is part of the SCF Group - a fully licensed trust and management company owned by UK lawyers and accountants and recommended by the Financial Times of London's "International" Magazine as being one of the top 30 Financial Websites in the World. The Group can provide literally all the services your UK Managed Company will require right from satisfying the law through to accountancy, office space, telecommunications etc. To find out more about our services please e-mail one of the following consultants:

Janson Lotery, B.Sc. (Hons) - Senior Company Consultant: janson@startingmybusiness.biz

Charles Baker M.A. (Hons) - Company Consultant: charles@startingmybusiness.biz

 

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