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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4423
Experience:  FCCA FCMA CGMA ACIS
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I live outside the UK and me and my business partner would

Customer Question

I live outside the UK and me and my business partner would like to start a business where we buy old houses, renovate them and sell them back again (property development).
What is the best way to start a company can it be an offshore from the UAE, also what is the best company setup structure to reduce the taxes?
I hope you give me the full detailed answer with the setup structure and expected reduced taxes.
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. It would be helpful if you could tell me in which country you reside. The obvious quick solution is for you to set up an UK company with a holding company offshore in a tax haven, diverting the profits there each year. That is how the big boys like Starbucks and Vodafone do it and you will have seen the adverse media and political comment over the diversion of profits from Corporation Tax so there every likelihood that that this form of tax avoidance will be legislated against. Of course you could base the whole operation overseas, but many firms with which you will have to deal may jib at working with an organization out with the UK. As you can see I need a bit more data before I can give you a full answer.
Customer: replied 1 year ago.
Yes, we are residing in the UK and one partner is French the other is Saudi.We are planning to buy our properties in cash so we won't be looking at the complicated issues regarding finances.Can we be a UAE limited company or UAE Offshore company to buy and sell these properties? Will we have to pay all the taxes or will we be waived and discounted on them? What is the best method you suggest for an offshore investor to setup?
Expert:  bigduckontax replied 1 year ago.
Wikipedia has the following information regarding taxation: 'UAE does not have any enforced federal income tax legislation for general business. An income tax decree has been enacted by each Emirate, but in practice, the enforcement of these decrees is restricted to foreign banks and to oil companies.' Now the way you intend to operate you will be buying, improving and selling properties. HMRC would regard that as trading in land and were you to do that on your own account the profits you make would be classified as income not capital gains. For UK companies there is no Capital Gains Tax (CGT), all gains and losses being passed through the trading account and subject to Corporation Tax which would be at 20%. An UAE company, if it operated along the same lines, would be liable to CGT. Many organisations would be loath to deal with an overseas company in this area of activity so a buffer of an UK company with profits diverted to the UAE company is a neat solution. However, operating in these tax havens does not come cheap, it is big business. Might it not be better to look closer to home, say the Channel Islands or Gibraltar, as a tax haven. It will still cost you though. Forget France as a base. France has five times as many tax inspectors per head of population than the UK, their taxation is horrendously complicated and constantly changing. Saudi Arabia's tax system with a 20% rate rules it out as a possibility. It all depends on the level of profits you think you will make as to whether the cost of a tax haven is a game worth the candle.
Expert:  bigduckontax replied 1 year ago.
You have asked for a phone call. I am answering you from a time zone 7 hours ahead of GMT which makes it a rather expensive exercise!
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 1 year ago.
Thank you for your support.
Customer: replied 1 year ago.
I'm trying to call you. Your number is ***** voicemail
Expert:  bigduckontax replied 1 year ago.
I have not released my number. My overseas number is ***** 25854819.
Expert:  bigduckontax replied 1 year ago.
My UK telephone number is *****(###) ###-####
Tamaam! [A tiny bit of Arabic I picked up in Muscat in the late 60s].