Why the United Kingdom Remains to be One of the Most Attractive Holding Company Locations Even After Brexit? Thanks to over 130 double-tax treaties (DTT) that remain in force after Brexit, the United Kingdom truly remains an Excellent Holding Company Location. For investors seeking a holding company outside the EU or EEA and in a well a UK holding company certainly opened up a new opportunity after Brexit, in a Country with a great international reputation, access to capital markets, robust corporate law and governance frameworks. To find out more about the general advantages of using a holding company, please see our article “Why Should I Use a Holding Company? Here are the main advantages of setting up a holding company in the United Kingdom that may be legitimately available for you:
- The UK has the largest network of double tax treaties in the world
- Tax Exemption for Foreign Dividend Income
- Capital Gains Tax Exemption for selling shares of Trading companies
- No Withholding Tax on Distributed dividends
1. Extensive Tax Treaty Network
| Interest | Royalties | |
| Non-Treaty Territories: | 20 | 20 |
| Treaty Territories: | ||
| Cyprus | 0 | 0 |
| Georgia | 0 | 0 |
| Germany | 0 | 0 |
| Hong Kong | 0 | 0 |
| Israel | 5/10 | 0 |
| Kosovo | 5/10 | 0 |
| Liechtenstein | 0 | 0 |
| Luxembourg | 0 | 5 |
| Moldova | 5 | 5 |
| Netherlands | 0 | 0 |
| Switzerland | 0 | 0 |
| United Arab Emirates | 0-20 | 0 |
| United States | 0-15 | 0 |
| *subjected to changes |
2. Tax Exemption for Foreign Income Dividends
all dividends, UK and foreign, are deemed to be subject to tax unless they fall into an exempt category. The rules for exemption differ between dividends received by “Small Companies”, and those received by Medium and Large Companies.
In the case of Small Companies…
companies meeting the below criteria are considered Small Companies:
- Less than 50 employees, and
- Turnover of less than €10 million, or
- Balance sheet total of less than €10 million
Small enterprises are completely excluded from taxation on such profits if foreign dividends are received from a nation with whom the UK has a double taxation agreement containing a non-discrimination article. As mentioned earlier, the UK has treaties with more than 130 countries.
In the case of Medium and Large Companies…
full exemption from taxation of foreign dividends may apply to medium to larger companies that receive dividends belonging to one of the many exempt classes. Any dividend received by the UK company that does not fall within an exemption class will be liable to UK corporation tax. The classifications for which exemptions apply in many cases are:
- Dividends are received from subsidiaries or any company controlled by the recipient – i.e. 51% shareholding
- Dividend payments made in respect of non-redeemable ordinary shares
- Any dividend received where it has been paid out of profits which have not been diverted from the UK
There are detailed anti-avoidance rules which will also need to be considered in connection with the above which are aimed at particular avoidance schemes.
3. The UK does not charge capital gains tax on the disposal of trading subsidiaries
The “Substantial Shareholdings Exemption” (SSE) requirements must be met for this regulation to be effective. A company must hold at least 10% of the company’s share capital for 12 months constantly during the two years before disposal to have substantial ownership. To be eligible for the exemption, the investment company must continue to serve as the holding company for a trade group or trading company right after the disposal.
4. No Withholding Tax
- When dividends are paid to shareholders or parent corporations, the UK does not impose withholding taxes on the distribution of dividends to parent companies or their shareholders. This applies regardless of where the shareholders are from. How Can LTC Business Services Help You Take Advantage of a UK Holding Company? LTC Business Services is your one-stop shop for all your international business needs. Be it business advisory or knowledge about local resources – as foreign investors and businessmen, you will get everything you need from us to gain a strong foothold in the worldwide market. We are always present for you in countries like Germany, Switzerland, the UK, Poland, Dubai, and Georgia.
Local Expertise in Your Native Language
We are On-Site in the UK for you We are specialized in working with foreign clients and investors. Therefore, we are not just well-acquainted with the needs of our clients but also, are privy to the requirements of a foreign country. In addition to this, we share our knowledge and information and support with local resources in your spoken language. So, with us on board, you will be able to make the right decisions and avoid costly mistakes to save you time and money As your local trusted partner, we take care of all your administrative needs while you focus on the big picture. If you are wondering how to start a holding company in the UK, contact LTC Business Services now. Be it German, English, Spanish, or Russian – we have the right expertise to communicate and solve your problems in your language.
Ease of Access
If you are unfamiliar with local laws, tax authorities, or other requirements of a foreign land, opening and operating a business in a foreign country can be rather expensive. At LTC Business Services, we have got you covered with complete administrative support so that we can help you operate your business using full remote/online solutions from anywhere in the world and from the comfort of your home. We aim to provide complete support to our clients and assist them in expanding their business across borders. Some LTC Business Services Are
- Local Address and Virtual Office Solutions
- Accounting
- Business Bank Account Opening Assistance
- Business licensing, Registry Extracts and Certificate
- VAT Registration and Tax Representation Service for Foreign Businesses
- Commercial Representations
- Document Legalization, Translation and Apostille
Solution for Every Problem
Whether you are starting a holding company in the UK or buying a ready-made holding company, we will provide you with complete assistance at each and every step. Our business consultants and advisors will ensure you obtain a strong business platform in the international markets, avoiding common obstacles.
5. Wrapping Up
LTC Business Services has strong experience partnering with foreign clients and investors. We have helped a number of business owners in having a strong foothold in the international markets and assisting them with opening a holding company in foreign jurisdictions. Contact us today for more information and professional assistance.
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Contact us now, start your LTC Business Services experience today!
Frequently asked questions
If you have any unanswered questions, please don’t hesitate to contact us.
LTC Business Services provides a range of services for businesses including business setup, business support services, commercial representation, workforce solutions, and more.
LTC Business Services has a presence in Dubai, Georgia, Germany, Poland, Switzerland, and the UK.
Yes, LTC Business Services offers language support to foreign clients by speaking their language, so there’s no need to worry about language barriers.
LTC Business Services offers fresh formation, ready-made companies, and shelf-aged companies for business setup.
Yes, LTC Business Services is committed to maintaining lasting relationships with clients and provides ongoing support by keeping clients informed throughout the entire process.
