Formation characteristics and use of companies registered in UK and International Business Companies registered in Cyprus.

Contents

1. Formation Characteristics and use of companies registered in UK.

2. English non-resident companies

3. Use of English Nominee Company for offshore commercial purposes.

Such companies are uses in that cases when contracts , invoices or payments from an offshore entity are undesirable. This method is ideal for the cases when an onshore company (Local company) is needed with the minimum taxation and it became very popular after certain anti offshore statements of different countries.

Between UK and Cyprus, and Cyprus and Russia, double taxation agreements are signed, and for this reason certain commercial schemes are very interesting and we are going to analyze them below.

English companies in International Tax Planning

More tax planning specialist every day believe that the use of offshore companies is becoming less profitable. English companies that can be used for tax planning, decreasing or avoiding taxes :

· English non resident company

· English nominee company

The owners of such companies have the benefit of the ownership of a European company and the benefits of low taxation because of the double taxation treaties, as also all the benefits of having a company registered in one of the strongest financial centers of the world.

ENGLISH NON RESIDENT COMPANIES

The concept of non resident companies (company free of corporate taxations), was reestablished in 1994. Since then, it became possible to register English companies, which under certain circumstances, can have trade activities or other business and they are free of taxation.

Section 249 (and all the subsections) developed in case that an English company is a double resident . Double residency can be effected in the next cases:

* The company is considered UK resident according to the English laws as it was registered in UK.

* The same company is at the same time considered resident in country that England had concluded a double taxation treaty.

In this case, all English companies that act under this circumstances, are considered residents in the country where the company operates according to the double taxation treaty.

OECD model of tax agreement - actual company location

Location of English companies that are considered as double residents, is to be considered the country in which the management of the company is located. This model is used in the majority of England's tax treaties.

Double tax treaty between UK and Cyprus

The treaty with Cyprus is very interesting as Cyprus has very low taxation rates. That is why, an English company chooses as operation country , Cyprus, it will be taxed only in Cyprus with the rate of 10%. The management of the company will be considered that is located in Cyprus if the shareholders, directors and the secretary of the company are located in Cyprus. This term can be easily achieved with trust agreements and nominee services provided by PPB INC LTD.

English non resident company structure

PPB INC LTD registers an English company with London registered address. The directors and secretary as well as the shareholders of the English company, provided by PPB INC Ltd are located in Cyprus as well as a branch of the English company.

As soon as the branch is opened in Cyprus, Cyprus Tax Inspection gives a taxation certificate confirming the permanent stay of the company and companies management in Cyprus, and this certificate is presented to the English tax authorities. After receipt of this certificate the English tax authorities issue their certificate, which confirms that the company is considered as non resident according the double tax treaty between UK and Cyprus.

You can have any business activity for and on behalf of the English company, use the English address and bank accounts. You have to prepare financial statements for the company in Cyprus and the profit will be taxed with the rate of 10% only in Cyprus.

ENGLISH NOMINEE COMPANY FOR OFFSHORE COMMERCE

This is the second of possible solutions. Use a company registered in England who agree to act for on on behalf of an offshore company. According to our specialist, this option has almost no benefits that is why it is rarely used.