Managed Republic of Ireland & UK Limited Companies

 

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

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

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 Budget Company Formations?

Budget Company Formations 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:

Charles Baker M.A. (Hons) - Company Director: charles@scfgroup.com