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bigduckontax
bigduckontax, Accountant
Category: Tax
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What are the benefits of having a limited company from the

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what are the benefits of having a limited company from the British virgin islands? I read that the tax is very, very low.... how does it work? Thanks.
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. You may have noticed from media comment that using a company in a tax haven like the BVI, Gibraltar or the Channel Islands is a common method of tax avoidance. The big boys like Amazon, Srarbucks, Vodafone all use this and I cannot help but think that it will not be long before legislation is introduced to curtail this practice from a taxation perspective. You will have noticed the recent row over Google's settlement of several years tax due for a relatively low amount. The system works by the BVI company invoicing say an UK company for a sum of money to suck the profit out of the UK taxman's clutches into the tax haven's. However, running companies in tax havens is big business for those areas and the practice does not come cheap, so unless the UK tax savings are substantial then this game is almost certainly worth the candle and may well, in the long term, be subject to legislative change. I do hope that I have been able to shed some light on this subject..
Customer: replied 1 year ago.
Thanks for replying but my original question was how do they work? I know about paying very little tax or even tax avoidance, but I need to know how they work. Thanks.
Expert:  bigduckontax replied 1 year ago.
They work like any other company. However, they usually have to have local directors, registered offices etc which is where the additional costs are incurred. Disclosure requirements, particularly in the BVI, are often minimal, however. That is one of the big advantages of trading offshore.
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Expert:  bigduckontax replied 1 year ago.
Thank you for your support.