Agency Companies

For centuries companies ("Principals") have appointed agents to buy and sell goods or services on their behalf.

The level of service provided by an agent can vary considerably. On the one hand an agent may actually find customers for the Principal on the other they may merely deal with some administrative functions on their behalf.

Examples of situations where a Principal would use an agent:

• To deal with local compliance issues and other needs of the Principal in countries or trading blocks in which the Principal has no physical presence.


• An undisclosed agent may be appointed to carry out a trade in its own name, where the Principal may prefer not to be known to the supplier or end customer.


• To improve the presence and/or credibility of the Principal.


• To comply with VAT regulations or to trade in a tax-efficient way.

As agents have been in existence historically for a long period of time, the taxation treatment of activities that they carry out for their Principals is well established and, in many cases, with proper planning, can be advantageous.

The most well established jurisdiction for agency companies is probably the UK.

Article - Advantages in Using a UK Tax Resident Company as Principal