The financial empire that is managed from the city of London and that makes it the main square in the world in this sector may be reeling.

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offshore in uk

New tax haven after Brexit?

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Most financial players remain expectant before the new stage that is coming in the United Kingdom after having won the 'Brexit'. The financial empire that is managed from the London city and that makes it the main plaza in the world in this sector may be reeling.

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    Brexit and UK offshore companies

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    To avoid possible capital flight, the Government has promoted a series of measures such as lowering the Corporation tax below 15% with the intention of matching that of Ireland, the lowest in the entire European Union and possible destination for companies.

    UK could become the Europe's new tax haven after the celebration of the Conservative Party Congress in October when the first fiscal measures are known. The British capital chooses to be a focus of capital attraction, so it will lower taxes and break with the agreement of exchange of tax information with Europe.

    The City of London, a lawless city for money laundering

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    he main basis for this accusation is that the Government has failed to fulfill its promise to close the paraΓ­sos fiscales administered by the United Kingdom and has allowed large fortunes to use the property market to launder money. One of its most notorious consequences is hyperinflation in the property market.

    According to various experts, the city of London is the center of lavado de dinero from the world of drug trafficking. British banks and financial services have ignored the so-called rules KYC (Know your Customer) designed to curb the ability of criminals to launder the proceeds of crime.

    The National Crime Agency of the United Kingdom affirms that billions of dollars do not stop leaving the country and are laundered with the complicity of the UK banks.

    Ironically despite the active role the UK plays in developing international standards for combat money launderingThis problem continues to be a potential threat to the British economy and reputation.

    The British offshore Micro-Empire

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    There is a group of offshore jurisdictions with strong links to Great Britain.

    These jurisdictions include Guernsey, Jersey, Isle of Man, The Islas CaimΓ‘n, Gibraltar and BVI. They are divided into two categories: Crown Dependencies (Isle of Man, Guernsey and Jersey) and British Overseas Territories (Cayman Islands, British Virgin Islands, Bermuda, Falkland and Gibraltar). There are subtle differences in its relations with the United Kingdom. One of the offshore financial centers Of particular concern is Gibraltar, due to fears that an exit from the EU could encourage Spain, which has had historical dissensions in Gibraltar, to try to absorb it. Gibraltar issued a report warning that Brexit could harm its interests.

    What is at stake is whether these international financial centers will be harmed or benefited by Brexit. In general, international financial centers think that uncertainty is an obstacle to business and that, if there is a vote BrexitThis could affect the transactions for the period after the result and the eventual exit of the United Kingdom.

    Eel
    Gibraltar
    Guernsey
    Shorts
    Malvinas
    Jersey
    Alligator
    Virgins
    Isle of Man

    Why doesn't a UK offshore company pay taxes?

    The main reason why a company does not pay taxes is the non-declaration of the company in the country of origin. If we add the fiduciary services or trust So developed that the city of London has, it is very difficult to reach the beneficial owner who is behind the names of other people who do not have any power of decision.
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    n the United Kingdom, the most demanded companies have been LLP (Limited Liability Partnership). These are not subject to any tax for their activity carried out outside the national territory (provided that the income is kept abroad). However, LLPs enjoy all the typical advantages of a offshore company without being such, unless they are administered by a trust (which you do not make them competitive due to the high costs). However, in this case, they risk being investigated by the Treasury as companies in the European Community.

    The authorities would be immediately struck by a European company that does not have a VAT number. Furthermore, these companies must comply with a series of accounting requirements that make them impractical and risky structures. Operating in Europe with a UK company without a VAT number is unthinkable, risky and reckless. It is also difficult to find a tax representative due to the high risk. However all this can change

    Wealth Management services arising from the crisis

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    many companies of asset and wealth management Independents emerged in the wake of the financial crisis in a world where the boundaries between traditional financial services industries are now blurred and the appetite and access to capital is fiercer than ever.

    Increasingly stringent regulations are now shared by the UK and various jurisdictions and there are more complex requirements for exchange of tax informationl as FATCA. Now in force, the managers of the assets & wealth management They try to combine their natural business tendencies with a much more cautious and obedient approach to disclose the methods of their operation and their attitude towards risk management.

    In response, many companies are reviewing their growth objectives, operating models, and re-evaluating their culture and the way they conduct their business activities.

    United Kingdom: onshore jurisdiction with offshore banking

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    Since the mid-XNUMXs, the City took advantage of a status of offshore center, specifically for non-residents, the only financial market in the world where transactions were made in non-local currency. British tax policy encouraged the creation in London of a market for dollars in the hands of non-Americans such as Eurodollars whose supply was guaranteed by the ambitious multinational companies and the trade deficit of the U.S.. In short, London became an offshore extension of New York, creating a large market in Eurodollars that has now made it the largest international financial center.

    Banking secrecy

    El Financial Secrecy Index It shows that the UK is the world's leading global player in financial secrecy. Although the United Kingdom ranks in the ranking of jurisdictions with strong bank secrecy at number 21, it is actually a metropolis that supports and controls a network of traditional jurisdictions with bank secrecy around the world, From the Islas CaimΓ‘n y Shorts a Jersey y Gibraltar. If the entire British network had been taken into account, it would easily top the list: Switzerland.

     

    Fiduciary services adapted to the common law: the trusts

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    n UK not offered fiduciary services to use as we can find in other jurisdictions. Although it is true, that being the country of origin of the common law fiduciary agreements are regulated under the figure of trust.

    However, these services are reluctant to be provided to European citizens due to the risk that this entails. Still they are very attractive because of the tax benefits.

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