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Copyright © 2008-2015  Pevex Services Ltd.

Registered in Cyprus at 1 Avlonos St., CY-1075 Nicosia, Cyprus Reg. No: C227520, VAT 10227520I

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Through other TMS Group companies, and in particular Tai Pan International we are able to arrange for the establishment of companies at competitive prices in many of the low and zero tax jurisdictions worldwide.

Low Tax Jurisdictions

Asia



Hong Kong, bordering the South China Sea and China, and formerly a British Crown Colony;  was ceded to China in 1997 but will retain common law and it’s institutions until 2047.


Easily and quickly formed, Hong Kong companies are ideal for international trading.  Directors need not be resident, but the company must have registered office in Hong Kong and we recommend appointing a local company secretary. Corporate directors are no longer permitted.


Formation takes a few days. The company registry is public although nominees are often used to provide privacy.


Full accounts must be prepared, audited and filed. We have connections with a number of accounting and audit firms in Hong Kong.


Hong Kong is a Low Tax jurisdiction with a maximum tax rate of 16.5%. This is only chargeable on locally generated income. Non-Hong Kong source income is not taxed. There is no withholding tax on dividend payments.




Formerly part of the Straits Settlements, then a British Crown colony, Singapore, after an unhappy two years in the Malay Federation, achieved full independence in 1965.


Easily and quickly formed, Singapore companies are ideal for international trading.  A local director and company secretary are legal requirements - corporate directors are not permitted. Full accounts must be prepared & filed. However, no audit is required for small companies. The company registry is public although nominee shareholders are used to provide privacy.  A local director & company secretary are required and this helps demonstrate local management & control.


Singapore is a low tax jurisdiction with a maximum rate of tax of 17%.  There is also a lower rate of 8.5% (for profit up to S$300,000 (c.$240,000).  In addition, and for the first 3 years of existence, the first S$100,000 (c. $80,000) of profit is not taxed. Non-Singapore source income may not be subject to taxation. There is no tax on dividend payments. Singapore is a respectable jurisdiction without the taint of being a "tax haven".




A Limited Liability Partnership (‘LLP’) is a business entity comprising two or more persons and is registered as such under the Limited Liability Partnerships Act 2005. Despite its name, it is not regarded as a partnership and general partnership law does not apply to LLPs.  An LLP is a body corporate that has a separate legal personality. It can sue, be sued and own property in its own name. The LLP is liable for its own debts and the partners and managers of the LLP cannot be made liable for such debts.


An LLP must have at least one local (ie Singapore resident) manager and must keep accounting records. Accounts are not required to be filed but are legally required to be kept by the local manager who must submit an annual declaration of solvency or insolvency to the Registrar.


An LLP is treated as a tax transparent entity and each of the partners are assessed and taxed individually on their respective share of the profits in the LLP.




Europe



Cyprus, at the extreme eastern end of Europe, achieved independence in 1960 from the UK.  In 2004 it has been a full EU member and since 2008 a member of the Euro-zone..  


Cyprus companies are therefore suitable for open trading with other EU states.  VAT registration is a requirement for companies trading within the E.U. Strongly recommended to have a majority of local directors to demonstrate local management & control.


Full accounts must be prepared, audited & filed together with VAT records.  The Company registry is public although a nominee shareholder is generally used to provide privacy. Corporate Directors are not permitted.


Low Tax - 12.5% corporate taxation on profits, no tax on dividend payments.




Zero Tax Jurisdictions




One of the Trucial States (a British Protectorate) until 1971, Ras al-Khaimah is now one of the seven emirates that comprise the United Arab Emirates (UAE).


Companies may be formed quickly and without bureaucracy.  Directors and shareholders may be corporate or natural persons of any nationality.  A registered office must be maintained in RAK from where registered agent services must be provided.


Ras Al-Kaimah is a 'no tax' emirate.  There are no personal or corporate taxes on income levied in RAK.  Unusually for a zero tax area, there are a number of double taxation treaties in force that can be used in multi jurisdiction structuring.





The Marshall Islands, in the Pacific, northeast of Australia and formerly a US Trust territory, gained its independence in 1986.  Better known as a shipping registry, the Marshall Islands also offers IBC’s which are free of all taxes.  


It is an inexpensive jurisdiction in which to form  & maintain an IBC. There are no requirements for annual filing or accounts.


Privacy still a strong point, as there is no public record of directors or members.




The Seychelles, northeast of Madagascar in the Indian Ocean, became independent from the UK in 1976.

 

Seychelles companies are inexpensive to form  & maintain. There are no requirements for annual filing or accounts, and there is no public record of directors or members.






East of Madagascar, Mauritius became independent from the UK in 1968.  


Mauritius offers two main structuring alternatives, known as GBC1 (resident) and GBC2 (exempt) companies.


GBC1 Companies

GBC 1 structures are most efficient to those clients wishing to benefit from the various favourable double taxation agreements that Mauritius has with other jurisdictions. This is because a GBC 1 company is considered, for tax purposes, to be resident in Mauritius. A company holding a GBC1 licence can engage in any activity ranging from simple investment holding, fund management, insurance to other non-banking financial services.


3% Tax

A GBC 1 benefits from a deemed tax credit so that it will end up paying a maximum effective tax rate of 3% on its trading profits.


GBC 2 companies

GB2 companies are mainly used for international business transactions, consultancy services or for private investment holdings where treaty benefits are not required. Such a structure provides for greater flexibility and is a suitable vehicle for holding and managing private assets.


Zero tax

GBC2 companies are tax exempt and thus have no access to Mauritius double tax treaties.



The Caribbean


Often described collectively as “tax havens”, a number of countries (primarily EU) impose withholding taxes on payments due to companies in these jurisdictions. Great care must be taken when using these companies for international trading.


These jurisdictions are broadly similar & therefore the choice of jurisdiction is one of perception & cost. The BVI for example is a favoured jurisdiction for lawyers simply due to familiarity.


Technically, Belize is not in the Caribbean being mainland Central America, but it shares similar IBC legislation (based on that of the B.V.I.).






A small British Overseas Territory in the Eastern Caribbean, Anguilla seceded in 1971 from the former federation with St. Kitts & Nevis.


Very fast incorporation and flexible legislation.  Relatively inexpensive to form & maintain.  No annual filing or accounts requirements. No public record of directors or members.  


As with all British Overseas Territories, privacy is becoming an issue.





Formerly British Honduras, Belize, in Central America, bordering the Caribbean Sea, between Guatemala and Mexico, gained independence in 1981.


Prompt incorporation and inexpensive to form & maintain.  No annual filing or accounts requirements. No public record of directors or members.  



  





Until in 1960 a part of the Leeward Islands in the Eastern Caribbean, the British Virgin Islands remain a British Overseas Territory.


An early adopter of “IBC” legislation in the 1980’s, the BVI continues to be the “jurisdiction of choice” for many professionals.   As with all British Overseas Territories, however, privacy is becoming an issue.


Mid priced with reasonably fast incorporation procedures, no annual filing or accounts requirements and no public record of directors or members.  



Caution: A number of banks now refuse to open accounts for BVI companies – please check first.





St. Vincent & the Grenadines in the Eastern Caribbean gained independence from the UK in 1979.


A relative latecomer to the offshore sector St. Vincent offers relatively inexpensive to form & maintain companies.  No annual filing or accounts requirements.  No public record of directors or members.




Low Tax Jurisdictions Zero Tax Jurisdictions

When trading internationally e.g. into Europe, it is often better to use a “low tax” rather than a zero tax jurisdiction. Examples are: Singapore, Hong Kong, Cyprus, Latvia etc and even the UK in some circumstances.


For EU trading (and thus requiring VAT registration), Latvia, Cyprus and Ireland are three to consider.

Best used for asset holding and discreet trading e.g. consultancy income, this category includes: Belize, B.V.I., Seychelles etc. They are all broadly similar & therefore the choice of jurisdiction is one of perception & price.

Common features are zero taxation and minimal information on the public register.


As a convenience to clients the following is a list of jurisdictions offered by Tai Pan International  split into  “Low Tax” and “Zero Tax”.


Please visit Tai Pan International  to see further information regarding company formation.

COMPANIES & CORPORATE STRUCTURES