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Agency Company

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Structuring


Agency Company

Definition

A trading company acting as an agent on behalf of a principal company which receives commission income from the principal for its services.

 

Agency Company benefits

  • Minimized tax burden

Corporate tax will be levied only on the Agency company’s commission income (3-5% of total turnover)

  • VAT number

Agency Company with a VAT number is an efficient solution for intra-EU trade

For example, Irish Ltd. with VAT or Cyprus Ltd. with VAT

  • Prestige

European Agency company enters into agreements with business partners which normally do not work with offshore-based companies

How does it work?

  • Agency Company will sign an Agency Agreement with an Offshore Principal.
  • If Agency Company is a VAT payer, it will issue invoices with its VAT number. Agency Company representative will sign agreements and manage bank accounts in its name.
  • Agency Company will be liable for corporate tax only on the amount of commission it receives by the Offshore Principal (3-5% of total income).

Compare agency companies

Tax burden
VAT number Benefits
CYPRUS 12,5% corporate tax on commission income Yes. Tax Resident Certificate available for access to Tax Treaties and EU Directives.
UK 20%-23% corporate tax on commission income Difficult to obtain. Opportunity to open account at UK banks.
IRELAND 25% corporate tax on commission income Shelf companies with VAT available. Irish bank accounts available

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