Corporate entities are established and managed in a number of countries across the world for a variety of reasons. The location chosen for the incorporation and management of a company is a vital factor and integral aspect of the international, commercial planning process.
Business Centres are becoming an increasingly popular feature within international trading centres. They provide an opportunity for businesses with international interests to establish a presence in a particular location without the costs of setting up a new office. In addition, with the implementation of Anti Base Erosion and Profit Sharing legislation (BEPS) and the need to tackle international tax avoidance, it is becoming increasingly important to demonstrate real substance and genuine activity.
The Need for Substance and Value
Substance is an important factor for organisations to take into account, especially international companies seeking to establish subsidiaries in other countries. In addition, measures are constantly being implemented to ensure that corporate tax is levied where real value creation takes place.
Companies must show that management, control and day to day decisions concerning their activities are taken in the specific, relevant foreign jurisdiction and that the company itself operates through an establishment which provides a real presence in that location. In the event that substance and presence are not demonstrated and/or no real value creation has taken place in that jurisdiction, the tax benefits enjoyed by the subsidiary company may be negated by a tax imposition in the country where the parent company is based.
Dixcart Business Centres and the Benefits of Serviced Offices
Dixcart Business Centres provide office facilities and services to businesses wishing to establish themselves in a new location. Dixcart has serviced offices located in Guernsey, the Isle of Man, Madeira (Portugal), Malta and the UK, each offering advantageous tax regimes and attractive residency programmes to companies setting up for the first time or relocating.
Why Choose Dixcart Business Centres?
Dixcart Business Centres not only offer serviced offices, they are also Dixcart offices with Dixcart professionals working there, who are able to provide a complete range of services to companies wishing to establish themselves in a new location. A comprehensive range of administrative support and professional services is available to tenants, including accounting, business planning, HR, IT support, legal support, management, payroll and tax support, if required.
In addition, our experienced teams of well qualified, professional staff provide international business support and private client services to clients around the world.
Key Characteristics of Dixcart Business Centre Jurisdictions
Guernsey is an attractive location for international companies and individuals. Benefits include:
- A general zero rate of corporate tax.
- No VAT.
- A personal income tax rate of a flat 20%, with generous allowances.
- No wealth taxes, no inheritance taxes and no capital gains taxes.
- A tax cap of £110,000 for Guernsey resident taxpayers on non-Guernsey source income or a tax cap of £220,000 on worldwide income.
The Dixcart Business Centre is situated in a prime location within the island's main financial district of St. Peter Port. Our nine fully furnished offices can each accommodate between two and four staff.
Isle of Man
The Isle of Man continues to attract an increasing number of international businesses. The Dixcart Business Centre is spread across two buildings, each in a prime location within the island's main financial district of Douglas. A number of suites are available, with each office varying in size and accommodating between one and fifteen staff.
Companies and individuals in the Isle of Man benefit from the following advantages:
- A zero rate of corporate tax on trading and investment income.
- Businesses in the Isle of Man are treated by the rest of the EU, for VAT purposes, as if they were in the UK, and they can therefore register for VAT.
- There is no wealth tax, inheritance tax, capital gains tax or investment income surcharge.
- A standard rate of income tax for individuals of 10%, with a higher rate of 20%.
- A cap of £150,000 exists on an individual's income tax liability for a period of up to five years.
There are two Dixcart Business Centres in Madeira; the first is situated on one of the main roads in the central commercial area of Funchal, Madeira's capital, and the other is a co-working option designed for self-employed professionals, start-ups and small businesses, located in the Ilhéus area of Funchal.
Companies are eligible to enjoy the many tax exemptions granted to businesses under the Madeira Free Trade Zone legislation, including:
- A corporate tax rate of 5%, guaranteed until 2027.
- No capital duty in the majority of circumstances.
- An 80% reduction in stamp duty costs.
- No withholding tax on dividend, interest, royalty and service payments.
- Dividends distributed to individuals by Madeira companies are not subject to withholding tax.
The Dixcart Business Centre in Malta is located in the prime area of Ta'Xbiex, close to the capital, Valetta. The building is iconic and incorporates a delightful roof terrace. An entire floor is dedicated to serviced offices; nine in total, accommodating between one and nine people.
- Companies operating in Malta are
subject to a corporate tax rate of 35%. However, shareholders enjoy
low effective rates of Maltese tax as Malta's full imputation
system allows generous unilateral relief and tax refunds:
- Active income: in most instances shareholders can apply for a tax refund of 6/7ths of the tax paid by the company on the active profits used to pay a dividend. This results in an effective Maltese tax rate of 5% on active income.
- Passive income: in the case of passive interest and royalties, shareholders can apply for a tax refund of 5/7ths of the tax paid by the company on the passive income used to pay a dividend. This results in an effective Maltese tax rate of 10% on passive income.
- Holding companies – the dividends and capital gains derived from participating holdings are not subject to corporate tax in Malta.
- There is no withholding tax payable on dividends.
- Advance tax rulings can be obtained.
The Dixcart Business Centre in the UK is located on Bourne Business Park, Surrey. Dixcart House is 30 minutes by train from central London and minutes from the M25 and M3, allowing a 20-minute drive to Heathrow Airport and 45 minutes to Gatwick Airport.
Dixcart House has 8 serviced office suites, each accommodating two to seven staff, 6 meeting rooms and a large boardroom, which can accommodate up to 25 people comfortably.
The UK is a popular jurisdiction for both companies and individuals:
- The UK has one of the lowest rates of corporation tax in the western world. The current UK corporation tax rate is 19% and this will be reduced to 17% in 2020.
- There is no withholding tax on dividends.
- The majority of share disposals and dividends received by holding companies are exempt from taxation.
- Controlled foreign company tax only applies to a narrow classification of profit.
Dixcart is seeking to expand its Business Centres and will be opening a further Centre in Cyprus before the end of 2018. Dixcart Cyprus has acquired a new office building in Limassol, which will have approximately 400 square metres of serviced office space.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.