Hong Kong, 25th April 2013 - The Sovereign Group, the independent,
international wealth management and corporate services provider, has
acquired The JLJ Group, an integrated services provider that accelerates
international companies' ability to understand and operate in the China
market.
JLJ, which has offices in Shanghai and Beijing, will be combined with
Sovereign's existing operations in China. The new Shanghai office will
employ 20 staff, while another five employees will be based in the
Beijing branch.
The JLJ Group was formed in 2003 and has wor
ked with over 600 clients,
including government organisations and companies of all sizes – from
Fortune 500 multinational corporations and global brands, to a variety
of small and medium-sized enterprises.
JLJ services include market research and consulting, company formation
and accounting outsourcing, which make it a perfect addition to
Sovereign's global business.
Howard Bilton, Chairman of The Sovereign Group, said: "Setting up a
business in China is particularly fraught with difficulties and can
involve enormous bureaucracy. We have been working with JLJ for some
time and recognised their considerable expertise in this area. This
acquisition allows Sovereign to offer its worldwide clientele an
efficient and high quality service for those wishing to do business in
China and strengthens the Sovereign global offering.”
Timothy Lamb, Managing Director of The JLJ Group, said: "We are
excited about the opportunities this acquisition brings us to expand our
service offerings while being part of a global company of dedicated
professionals.”
In 2012, 44% of global Foreign Direct investment (FDI) inflows were
hosted by only five countries. China attracted the lion's share of USD
253 billion (or 18% of total) followed by the United States (USD 175
billion), Brazil (USD 65 billion), the United Kingdom (USD 63 billion)
and France (USD 62 billion) – Source: FDI in Figures, published by
Investment Division, Secretariat of the OECD Investment Committee, April
2013).
Ends.
About The Sovereign Group
The Sovereign Group's core business is setting up and managing
companies, trusts, pensions and other compliant structures to meet the
specific personal or business needs of its clients. Typically these
would include tax planning, wealth management, succession planning,
foreign property ownership and facilitating cross-border business.
The first Sovereign office opened in Gibraltar in 1987 and the Group now
has offices in over 25 international finance centres worldwide. This
enables us to provide local expertise on an international scale and
gives clients access to a global service from a local point of delivery.
In all jurisdictions that require us to be licensed we have applied
for, and been granted, the appropriate authorisations.
We work with public companies, charities and professional law and
accountancy firms, but the majority of our clients are individuals –
expatriates, entrepreneurs, consultants, private investors and high net
worth individuals and their families.
To serve our client base better we have further developed a wide range
of supporting services that includes international pensions, asset
management, specialist tax advice, ship and yacht registration,
insurance, immigrant investor programmes, as well as trademark and
intellectual property registration and protection.
For more information, please contact:
Tiffany Pinkstone, Asia
Tel: +852 2542 1177
Email: TPinkstone@SovereignGroup.com
Ian LeBreton, Europe
Tel: +350 200 76173
Email: ILeBreton@SovereignGroup.com
Or visit the site: www.SovereignGroup.com
For more information on The JLJ Group, please visit www.JLJGroup.com or contact info@JLJGroup.com
Thursday, April 25, 2013
Monday, April 15, 2013
Expats and tax: own company could help contract worker
Short-term contract worker
Personal status:
family man who travels for work on his own
Expat Status:
short-term contract worker, usually for four to six months and in the UK one to three months between contracts
Financial status:
contract terms vary, approx. £80,000 tax-free
Our intrepid contract worker is UK-resident under both the existing residency test and the new Statutory Residency Test (SRT), which has just been introduced.
His family lives in the UK and he spends, on average, four months a year in the UK in-between contracts. He is not employed – because he is self-employed – so cannot fall within the full-time work overseas exemption.
It is possible for a person who is a contractor to become non-UK resident if their work is performed overseas in a way that is equivalent to someone working full-time overseas. But our contractor's work is sporadic and he spends too many days (more than 90) in the UK. So he is counted as UK-resident, despite carrying out all his work overseas.
It is quite likely that his income would also be taxed in the country in which the work is performed. If the income were taxable in both countries, for example in the UK, as the country of residence, and France, as the country where the work is performed, a double taxation agreement (DTA) could determine which country has the right to tax his income.
Unless the contractor has a fixed place of business, say an office, in the other country, his country of residence would normally have the exclusive right to tax his income.
UK tax could be mitigated by making contributions to a UK-registered pension scheme such as a self-invested personal pension (SIPPS). Contributions to a registered scheme attract full UK income tax relief as long as they do not exceed £50,000 per annum (reducing to £40,000 from next year).
Tax-efficient structuring could be achieved by setting up a company. It would be possible to use an offshore company but this would have to be managed and controlled from offshore, which would necessitate him employing overseas directors. He would also be subject to various anti-avoidance rules so would need to carefully structure the ownership of the company to avoid these. The expenses of both are unlikely to be justified for this level of earnings.
He would, however, benefit from incorporating a UK company to contract with the various firms he works for. The company would pay tax of only 20pc on profit. From the gross income, the company could deduct all reasonable expenses according to normal UK rules including any payments made to his SIPPS.
He would obviously need some money to live on and so would need the company to pay him a salary. This could be kept relatively low to take advantage of the lower tax rates. He could also arrange for the company to pay dividends to top up his total income as and when required.
As long as his total income was below £41,000 per annum there would be no further tax payable on dividends received. This arrangement would give him great flexibility to be paid what he wanted when he wanted and take advantage of differing and lower tax bands. Any income he left within the company would suffer no further tax.
Arrangements similar to this can be caught by IR35, which is an anti-avoidance provision to stop what were essentially employees being paid through a company to avoid tax. Readers may recall the stink when it was revealed that many senior BBC figures had set up corporate structures through which they took their income. IR35 would not apply to our contractor, as he is bona fide self-employed, so incorporating would give him tax savings and much flexibility.
Personal status:
family man who travels for work on his own
Expat Status:
short-term contract worker, usually for four to six months and in the UK one to three months between contracts
Financial status:
contract terms vary, approx. £80,000 tax-free
Our intrepid contract worker is UK-resident under both the existing residency test and the new Statutory Residency Test (SRT), which has just been introduced.
His family lives in the UK and he spends, on average, four months a year in the UK in-between contracts. He is not employed – because he is self-employed – so cannot fall within the full-time work overseas exemption.
It is possible for a person who is a contractor to become non-UK resident if their work is performed overseas in a way that is equivalent to someone working full-time overseas. But our contractor's work is sporadic and he spends too many days (more than 90) in the UK. So he is counted as UK-resident, despite carrying out all his work overseas.
It is quite likely that his income would also be taxed in the country in which the work is performed. If the income were taxable in both countries, for example in the UK, as the country of residence, and France, as the country where the work is performed, a double taxation agreement (DTA) could determine which country has the right to tax his income.
Unless the contractor has a fixed place of business, say an office, in the other country, his country of residence would normally have the exclusive right to tax his income.
UK tax could be mitigated by making contributions to a UK-registered pension scheme such as a self-invested personal pension (SIPPS). Contributions to a registered scheme attract full UK income tax relief as long as they do not exceed £50,000 per annum (reducing to £40,000 from next year).
Tax-efficient structuring could be achieved by setting up a company. It would be possible to use an offshore company but this would have to be managed and controlled from offshore, which would necessitate him employing overseas directors. He would also be subject to various anti-avoidance rules so would need to carefully structure the ownership of the company to avoid these. The expenses of both are unlikely to be justified for this level of earnings.
He would, however, benefit from incorporating a UK company to contract with the various firms he works for. The company would pay tax of only 20pc on profit. From the gross income, the company could deduct all reasonable expenses according to normal UK rules including any payments made to his SIPPS.
He would obviously need some money to live on and so would need the company to pay him a salary. This could be kept relatively low to take advantage of the lower tax rates. He could also arrange for the company to pay dividends to top up his total income as and when required.
As long as his total income was below £41,000 per annum there would be no further tax payable on dividends received. This arrangement would give him great flexibility to be paid what he wanted when he wanted and take advantage of differing and lower tax bands. Any income he left within the company would suffer no further tax.
Arrangements similar to this can be caught by IR35, which is an anti-avoidance provision to stop what were essentially employees being paid through a company to avoid tax. Readers may recall the stink when it was revealed that many senior BBC figures had set up corporate structures through which they took their income. IR35 would not apply to our contractor, as he is bona fide self-employed, so incorporating would give him tax savings and much flexibility.
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