Structuring using a UK company as an agent for an
One of the benefits of a UK Company is that it conveys a degree of respectability to other entities in which it trades. However, as the rate of UK corporation tax is 20%, for non-residents looking to legitimately mitigate chargeable tax, it is possible to incorporate a UK company to act as an 'agent' on behalf of an overseas international company ('Principal').
In its capacity as Agent, the UK Company is authorised to enter into transactions on behalf of its Principal. In essence, therefore, one would run a business through an international company but employ a UK company to act as an agent in all it's dealings with customers and suppliers. This can prove to be a very attractive structure for international trading and tax planning purposes. The key issues in respect of UK tax is to ensure there is a commercial contract setting out the terms of an agency relationship and a market rate commission (say 5%-10%) for services rendered.
A: A UK Agent company should not conduct any activity within the UK. Any trade with other UK entities would mean that the whole amount received would be taxable in the UK as it would be UK source income. In cases where UK entities are involved, the international principal should contract directly but not through the agent company.
the UK Agent
company get a "Certificate
of Tax Residency"?
A: A UK Agent company cannot obtain a certificate of tax residency. We can create a suitable UK company with appropriate structuring to deal with this request, however, the agent company certainly cannot.
Should the UK Agent
company transfer the
profit to the
international company bank account immediately after every business
transaction or once a year only (say before filing the Annual Return)?
A: The terms of transfer of funds from the agent company to the principal will depend on the agreement entered into. It can be done every month or once a year.