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Onshore vs Offshore Europe
Below is information on our most popular applications of European registered companies, aptly named Onshore European Companies (tax resident) and Offshore European Companies (non-resident) for easier comparison. Note that both types of European structures offer tax optimization schemes, each with their own approach.
ONSHORE EUROPE
Tax Resident Company
- In onshore higher tax countries, tax rates can be minimized with advance tax rulings (The Netherlands) or using sophisticated tax minimizing structures such as in Austria.
- Other countries have a fixed, low corporate tax, allowing a simpler approach to structuring businesses (Cyprus, Latvia).
- VAT numbers are available to all tax resident companies, although easier to acquire and maintain in countries such as Cyprus, Latvia, Netherlands, Poland.
- Double-Tax Treaties can be applied with a tax resident company to reduce or eliminate withholding tax on dividends, interest and royalty payments.
- Substance requirements are proving to be essential in tax planning situations and in order to approve tax residency.
- Most Popular Applications:
Holding assets and real estate
Royalty Company
OFFSHORE EUROPE
Non-Resident Company
- 0% tax achieved through territorial tax regimes (for example, Gibraltar) or non-resident limited partnerships in UK, Scotland, Denmark).
- 3-5% effective tax rate can be achieved by using Agency structures (for example, UK, Cyprus or Ireland).
- VAT Registration for non-resident companies is complicated. If a VAT number is required, we suggest purchasing a Shelf Company with VAT, for example in Ireland.
- Financial statement requirements are simplified (Irish & UK agency companies) or not required at all (for example, Scottish Limited Partnership).
- Company administration is easier and less expensive, especially for companies that do not require VAT reporting.
- Most Popular Applications: General Trading if VAT not required
SUGGESTED OFFSHORE EUROPE JURISDICTIONS
