Tai Pan International (Taipan Management Services Ltd), a member of The TMS Group, provides services to both professional firms as well as to direct clients. We invite professional introducers to have a look at our services here.
We do not just form offshore companies but rather, we provide a complete “one-stop solution” including consultancy, structuring & tax planning, along with company formation and management services, and arranging suitable banking facilities.
We, and other members of The TMS Group, offer a wide range of jurisdictions e.g. Hong Kong, Singapore, Cyprus and Ireland as well as classic IBCs (International Business companies such as Belize, Dominica, BVI, Seychelles, St Vincent and others). We are also able to assist clients to establish companies where appropriate, in other slightly more esoteric jurisdictions such as Guatemala, Gibraltar, & RAK (UAE). (see our jurisdictions page for more information).
Companies without bank accounts tend to be of limited use!... We are therefore please to offer banking introductions to a number of onshore and offshore banks including ABC Banking Corp (Mauritius, Norvik Bank (Latvia), DBS and OCBC (Singapore) and Bank of St Lucia amongst others. (see our banking page for more information).
An example of how the above summary of services can work together is as follows:
European based clients will probably be aware of the new (from 2015) ‘TBES’ directive, which, in effect requires, all business-to-consumer electronic transactions to be charged VAT at the consumers home rate. .. Logical one may think until it is realised there are 28 countries in the EU together with several further sub-rates e.g. Madeira, Azores etc.- a logistical nightmare with rates of VAT varying from 17% in Luxemburg up to 27% in Hungary. Even with a system called MOSS (a scheme to allow businesses to account for VAT to their local VAT office), it is still a tremendous amount of work to keep track of which VAT amount is payable for which transaction and country). Initially, the various VAT offices are taking a soft line but past experience shows that escalating fines will start to be applied. The administrative burden can be added to the ridiculous situation that a consumer in e.g. Hungary will be charged 127 against 117 for someone in Luxemburg (assuming a nett selling price of 100). This seems to be a recipe for tax evasion.
The above directive applies, at the moment, to electronic downloads with minimal human intervention e.g. music, e-books, software etc. etc. It is however planned to widen this - possibly as soon as 2016.
Given that the above regime affects sales of electronic downloads and services, it may be already obvious that the solution might be to move the business in whole or in part outside the EU… How?
First, a company would be established in a suitable jurisdiction. We would tend to recommend a low tax rather than zero tax as it attracts less attention when selling openly on internet. This could be a Singapore or a Hong Kong company (‘Low-Tax Co’), both of which do have corporation tax (up to 17% and 16.5% respectively, but see our jurisdictions page), Both jurisdictions' rate of tax is probably lower than the client is already paying in his home EU country. A sale or license of the electronic intellectual property (IP) involved could be sold/licensed to the new ‘Low-Tax Co’ at fair market value. ‘Low-Tax Co’ would then promote the product worldwide (possibly except to the home country of the licensor which would continue to make domestic sales). ‘Low-Tax Co’ will be under no obligation to collect VAT or indeed tax (whatever the EU Commission may say or feel about that) and therefore sales would be at 100 (rather than the 117 - 127 mentioned above). Licence/royalty payments would of course be payable to the licensor and these would be taxable in the home country. New products/services of course could be owned & sold by ‘Low-Tax Co’ without the need for a licence/royalty agreement.
It would also be possible to use a RAK (UAE) company in a same way and in this case there would be no corporation tax payable at all as the Emirates are tax free zone. In this case, a little more care would need to be taken in setting up the arrangement in particular not to link the home company with the RAK company other than for the purposes of the royalty / license agreement.
This is a very simple yet very workable solution to an administratively messy and expensive problem.
Tax Planning & Structuring
We offer a wide range of low and zero tax jurisdictions and will help you make the right choice.
We try to explore all the potential routes for reducing any tax burden.