Scotland

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Scotland

      GENERAL INFORMATION ABOUT JURISDICTION

Scotland apperas to be an autonomous state in The United Kingdom of Great Britain and Northern Ireland, and also Scotland is an important jurisdiction of international tax law planning. Scotland is not mention edinany black lists of any country, including Ukraine. Though Scotland is not apure offshore zone, this jurisdiction manages to combine English prestige and its own advantages like no obligation for companies to prepare and submit financial accountant report and to pay taxes under certain conditions. So registration a company in Scotland seemstobea competetive gain unlike companies incorporated in England (English LLP companies).

 

1. LEGAL REGULATION

English Law (Companies Act 2006 and Limited Partnership Act 1907) regulates the activity of Scottish partnerships.

2. THE PROCEDURE OF STOTTISH PARTNERSHIP REGISTRATION

2.1. Types of companies

It is possible to incorporate a Partnership with Limited Liability (LP) in Scotland. Alongside, it is obligatory to put the words LP right into the name of the company.  It is possible to insert following words into the company’s name like «bank», «insurance», «trust» only if you have relevant licenses for performing such kind of activities.

 2.2. Partnerships with limited liability (LP):

  • Minimum statutory capital – not established.
  • Founders’ requirements – at least 2 partners (individuals or legal entities). There is no resident requirement.

There should be compulsory one general partner at minimum that takes responsibility for the company’s debts and one limited partner that takes responsibility only in scope of this partner’s share.

  • Director may be represented by the general partner or by the manager, the latter is appointed by the general partner.
  • Secretary – not required.
  • Public information: information about partners.
  • Scotland LP being not a UK resident is obliged to submit annual nil tax return.
  • LP in Scotland is not subject to annual financial accounting.
  • The Partnership’s registered address should be in Scotland.

Acquiring a Scottish LP Company you get a legal entity which can possess assets and immovable property, be part of the agreements, can borrow money etc.

3. TAXING

If the LP’s partners are not the UK’s residents, do not do any business on the territory in the UK and do not receive any income on the territory of UK, than the LP partnership does not pay UK taxes. If the partners are residents of the UK, then taxes should be paid according to the tax scale of the UK.

When incorporating the Scottish LP, this legal entity is not considered as the separate subject of the tax system. Partners of LP pay taxes according to the received Partnership’s income which was received according to their interest, and bearing in mind the tax rate of the certain Partner’s residence and its ratio of income of the LP Partnership.

So the correct corporative structure where partners of the LP are not the UK residents, though are residents of other countries, then such LP will be free from paying taxes according to the UK Law. In order to save the maximum of the LP partners’ income, it is advised to appoint offshore partners from the low tax jurisdictions.

For example, you have registered a Scottish company, whose partners are residents of Seychelles and BVI. You do not carry out your business in the United Kingdom and are not a resident of this country. Consequently, you do not pay British taxes. According to the legislation, all partners pay taxes in the amount established by the country of their registration. However, the tax rate in Seychelles and BVI has been set at 0%, so the total taxation of the Scottish company will also be zero.

4. CURRENCY CONTROL

Not applicable.

5. DOUBLE TAX AVOIDANCE AGREEMENTS

As the Scottish LP does not pay UK taxes – LP companies are not subject to the power of UK’s Double tax Agreements. Not with standing such legal feature, it is popular to incorporate a Scottish LP and such type of companies are widely used in international intermediary trade.  

 Please, be aware that very often you can find such a thing as «Offshore Scotland». In fact, Scotland has never been a pure offshore jurisdiction. It is a country with a preferential tax treatment, which can become your tax-exempt jurisdiction under certain conditions (you are not a resident of the UK, you do not carry out business and do not receive income on its territory). Under these conditions, the partnerships are exempt from paying British taxes. And the right corporate structure of the company (when partners are residents of tax-exempt offshore zones) enables the partnership to have the «offshore status» and gives you the opportunity to enjoy all tax benefits.

«Offshore Scotland» is a good choice of a high-status jurisdiction with the possibility of tax-free and report-free operation of business abroad. It’s a huge advantage if you are going to open an account in a foreign bank due to the fact that a growing number of foreign banks refuse to work with offshore companies and to open accounts for them.

 

If you would like to buy a ready-made Scottish LP or to register «Offshore Scotland», please refer to the office of Campio Group, where the experts will answer all your questions and will help you to incorporate a Scottish LP.