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 |
