Category: Corporate Services

If you are in the process of setting up a company in the EU and require funding solutions – Malta can assist.

The Maltese Government has launched an attractive loan scheme to support the manufacturing and service industries, investing in projects that will help them further expand their business.  

• The measures are designed to support companies which plan to; establish innovative products, enter unexplored geographic markets, address environmental concerns, or aim to digitalise various business processes. Projects can be funded through a variety of loan offerings, up to a total of €800,000.

Companies which are based in Malta have access to national and EU funding.

Dixcart Malta can help with the application to the Malta Enterprise, the Government agency which offers support measures to Maltese companies at different stages of their lifecycle. There are attractive funding options that are available for companies in the following sectors; Hi-Tech Sector, Artificial Intelligence, Advanced Manufacturing, Life Sciences Sector, Education and Training, Digital Innovation and Data Science.

Eligibility Requirements

Companies registered as a limited liability company with the Malta Business Registry and engaged in the business of producing goods or services in Malta are eligible for funding.

Businesses must also:

• have no tax liabilities relating to; VAT, income tax, or contribution payments;
• not be engaged in activities expressly excluded under the de minimis regulation;
• have at least one full-time employee registered on Job Plus and residing in Malta;
• not be subject to collective insolvency proceedings.

Activities

Common examples of activities that may be supported through a soft or start-up loan include:

a) facilitate a development or expansion project, based on a business plan that is focused on developing a new product or entering a new geographic market;

b) address environmental issues such as water usage, water treatment, waste treatment, reduction and reuse;

c) optimise business processes through digitalisation and advanced technologies;

d) achieve a high level of sustainability.

Amount of Contribution

The loan may cover up to 75% of the costs associated with the proposed project, including asset purchases, salary costs, know-how, and other non-recurring costs.

The loan must be secured by a unique mortgage covering at least 50% of the loan amount.

The Soft Loan amount must not exceed:

• €1 million (or €500 thousand for road freight companies), to be repaid over a period of five years,
• €500 thousand (or €250 thousand for road haulage companies), to be repaid over a period of ten years.

The Start-up Loan amount must not exceed:

• €800,000 for innovative projects, provided that all parties in the company structure, including corporate entities, are a maximum of 4 years old.

Artificial Intelligence (AI) Strategy and New Niches

The Maltese strategy and vision for AI aims to map the path for Malta to gain a strategic competitive advantage in the global economy as a leader in the AI field. Malta is becoming a home for technologies that will be shaping the future, such as: 

1. Distributed Leger Technology (DLT), including blockchain; 
2. MedTech, including bioinformatics and medical imaging;
3. Artificial Intelligence, mainly with a focus on machine learning, natural language processing and speech;
4. Internet of Things and 5G;
5. Biometrics; 
6. Virtual Reality and Augmented Reality. 

Malta as a Technology “Test Bed”

Malta is an ideal micro test bed enabling service providers to prove and develop their concepts and create solutions. Malta incentivises companies to introduce innovative technologies and to help build a new infrastructure for the future. The Government of Malta continues to invest in bringing the latest technologies to Malta and aspires to ensure continuous connectivity.

Malta – The Tech Hub in the Mediterranean 

Malta Enterprise is the Maltese Government economic development agency, responsible for attracting Foreign Direct Investment, whilst also assisting businesses to set-up, grow and continue to expand their operation.

This is achieved through various fiscal and financial incentives that are managed and administered by the agency. It is also worth noting that 25% of Malta’s population are expats living and working in Malta, demonstrating that it is very much an Island open to diversity and innovation.

Case Study

An entrepreneur based in Portugal contacted Dixcart to help with an application for the Malta Start-up Support Measure.

After a quick preliminary meeting with Malta Enterprise, it was identified that the product met the eligibility requirements for the Start-up Support programme and would qualify for the €800,000 loan, allocated to projects that are deemed innovative.

Dixcart started to work concertedly, for the next couple of months with the client, to prepare the business plan, the financial projections, and to then assist with the pitch to the Malta Enterprise Board.

A couple of weeks following the pitch, Malta Enterprise informed Dixcart and the client that the project had been successfully approved. Dixcart then helped the client establish the Maltese company, find suitable office space, and recruit staff.

Dixcart will also help the client apply for Research and Development (R&D) Grants, for any expenses that are not covered by the Start-up Loan. We will also provide ongoing management and support, including accounting and secretarial services, and comprehensive reporting and compliance services. 

Additional Information

If you require any further information regarding setting up a company in Malta and our “one-stop shop” corporate services, including support with an application for funding in Malta, please speak to Jonathan Vassallo at the Dixcart office in Malta: advice.malta@dixcart.com.

A number of clients and contacts ask for general details regarding Swiss accounting and audit requirements, and we have therefore provided the following summary.

All Swiss companies have to register with the Swiss Commercial Registry and have their accounting undertaken by a Swiss accountant or by a Swiss Certified Public Accountant.

Swiss Accounting Regulations and Chart of Accounts

A chart of accounts is a list of financial accounts set up, usually by an accountant, for an organisation, and available for use by the bookkeeper for recording transactions in the organisation’s general ledger.

There is no official chart of accounts in Switzerland. Certain industries nonetheless are governed by Swiss accounting regulations and Swiss GAAP.

Companies can refer to principles defined by:

• Swiss Law
• The Swiss Audit Manual
• IAS
• US-GAAP Standards

Company Obligations

The Board of Directors of a Swiss company is required to produce an annual report for each financial year, within six months of the end of the relevant financial year.

Every company has to keep physical or digital records of all its business transactions for a period of ten years.

Annual Reports

The annual report consists of the Swiss company’s financial statements in the form of, the balance sheet, profit and loss account, the corresponding notes, and a management report.

The annual report includes the turnover for the preceding financial year and must follow the Swiss accounting principles (see below).

The annual report, together with the corporate tax return, must be filed with the relevant cantonal tax authority by 30 November of the calendar year (at the latest), following the end of the financial year.

Publishing Results

In Switzerland, publication requirements are very limited. Only individual and consolidated financial statements of listed companies must be published.

Swiss Audit Requirements

The organisation’s size and economic importance of the Swiss company determine whether a company is subject to an ordinary or limited audit. Under certain conditions, smaller companies are not audited.

1. Ordinary Audit

This is required, if for two consecutive fiscal years, two of the threshold values, detailed below, are exceeded.

1. Balance sheet of CHF 20 million or more,
2. Turnover of CHF 40 million or more,
3. 250 or more full-time employees.

A company must also undergo an ordinary audit; if it has an obligation to consolidate, or if a group of shareholders holding at least 10% of the company’s shares request such an audit to be performed.

An ordinary audit may be specified in the company’s articles of incorporation or voted on a general meeting.

2. Limited Audit

Most Swiss SMEs do not meet the above criteria and are therefore subject to a limited audit.

This requires a summary report to be sent to the members of the general meeting. The process includes an interview with the management, verification of details and an analytical audit.

3. No Audit

If the company employs less than 10 full-time employees and all of the shareholders unanimously consent, it is not necessary to carry out an audit (opting-out).

Swiss Holding Company: Consolidating Financial Statements

Every Swiss holding company must establish consolidated accounts according to the Swiss Code of Obligations.

Consolidation means aggregating annual reports from the different companies which make up the group to obtain a single annual report describing the situation of the group.

In terms of Swiss accounting law, two or more companies form a group, if they meet the following two conditions:

1. If 50% of the company are held by the Group, holding company of the Group, or by another company within the Group.
2. If they have similar objectives and purpose.

Small groups are exempt from consolidating their accounts and are so defined if they meet two of the three following criteria:

• A total balance sheet less than CHF10 million,
• Fewer than 200 employees,
• A turnover of less than CHF20 million.

The company must also conform to the conditions detailed below:

• The company must not have shares quoted on the stock market.
• No shareholder, owning more than 10% of the capital has demanded consolidation.

Swiss Accounting Principles

• Swiss Financial Reporting Principles

Financial reporting serves the purpose of presenting the economic situation of a company in such a way to enable third parties to make a reliable judgement.

Financial reporting is based on the assumption that the company will remain an “going concern” for the foreseeable future and is not in danger of insolvency.

• Currency and Languages

Accounting in Switzerland is carried out in Swiss francs (CHF) or in any other currency required for business operations. If a foreign currency is used, values must also be shown in Swiss francs.

The foreign exchange rates used are those as published by the Swiss Federal Tax Administrator and must be disclosed in the notes.

Swiss accounting has to be undertaken in one of the official Swiss languages or in English. It may be carried out in writing, electronically, or in a comparable manner.

• Swiss Accounting Principles

The Dixcart office in Switzerland can provide you with comprehensive details regarding Swiss Accounting Principles. If you would like further information, please contact: advice.switzerland@dixcart.com

Additional Information

Please do not hesitate to contact our office in Switzerland, if you have any further questions or would like a cost estimate for the services that we can provide: advice.switzerland@dixcart.com

Nevis, a small island nation in the Caribbean, is known for its favourable business environment and strong asset protection laws.

Among the popular business entities available for establishment in Nevis are the Nevis Limited Liability Company (LLC) and the Nevis International Business Corporation (IBC). Historically they had marked differences, but the law has changed over time so that they now broadly offer the same thing. The main difference being that the LLC is owned by members and controlled by managers and the IBC is more similar to the traditional offshore company with shareholders and directors and has ‘Limited’ in the name.

Why incorporate a company in Nevis?

Tax Benefits: Nevis offers a favourable tax regime for companies, including no corporate income tax in most circumstances*, no capital gains tax, and no withholding tax on dividends or interest payments.

*contact advice.nevis@dixcart.com for further information

Asset Protection: Nevis has strong asset protection laws that make it an attractive jurisdiction for business owners who want to protect their assets from creditors and lawsuits. Nevis’ laws make it difficult for creditors to seize assets held in Nevisian entities, which can help to shield a business owner’s personal assets from business liabilities.

Privacy and Confidentiality: Nevis offers a high level of privacy and confidentiality for companies and their owners. Nevis has strong privacy laws that ensure the confidentiality of a company’s financial and ownership information. Nevis LLCs are not required to file annual reports or disclose any financial information to the public and there are no centrally held beneficial ownership or director registers.

Simplified Corporate Governance: Nevisian corporate law provides for a simplified corporate governance structure, which can make it easier and less costly for companies to operate. For example, Nevis allows for single-member LLCs, which do not require the appointment of officers or directors. IBCs allow a minimum of one director which can be an individual or a corporate.

Flexibility in Company Structure: Nevis offers a range of structures, including LLCs, corporations, and trusts, which can provide flexibility for business owners in terms of management, taxation, and liability. Additionally, Nevis allows for the formation of hybrid entities, such as a Nevis LLC that decides to transform to a Nevis Multiform Foundation, which can provide even more flexibility. See alternative notes regarding Nevis Multiform Foundations and Nevis Trusts for further information on these types of entities.

Fast incorporation: Once we have gathered all of the required due diligence, Nevis LLCs and IBCs can be incorporated within 48 hours, making them a convenient option for clients looking to set up corporate entities quickly.

Low maintenance costs: Nevis IBCs and LLCs have low annual maintenance costs, making them affordable options for small businesses.

How to set up a Nevis Corporate Entity

Summary

In conclusion, both Nevis LLCs and Nevis IBCs offer a variety of benefits to individuals looking to establish a corporate structure in Nevis. It is also worth noting that both LLCs and IBCs are required to file an annual tax return with the Nevis Inland Revenue Department annually and that all corporate entities must be incorporated by a local service provider and must maintain a registered office and registered address in Nevis, Dixcart Management Nevis is happy to offer this service to our Clients.

Additional Information

If you require additional information regarding the jurisdiction of St Kitts & Nevis and the services offered, speak to Beth le Cheminant at the Dixcart office in Nevis: advice.nevis@dixcart.com.

Establishing a Malta Company

Malta is a beautiful Mediterranean island and is equipped with a high-tech infrastructure that those wishing to establish a commercial operation would expect to find in an international financial service centre.

Additional advantages include; the corporate tax regime, investment and immigration opportunities, fiscal and social benefits, a distinctive lifestyle and a stable economic ecosystem.

Here we examine ten key reasons why businesses look to relocate to Malta.

Reason 1: Opportunities in the stable financial services sector

Building on the success of its robust banking industry, Malta has taken the opportunity to style itself as a European financial service centre and the jurisdiction of choice, for funds in the Mediterranean.

Malta offers a great selection of innovative funds structures, including:

• The Professional Investor Funds, commonly referred to as PIFs, are the Maltese hedge fund that does not fall under the AIFMD.
• Alternative Investment Funds (AIFs).
• UCITS (retail funds).
• Private Funds.

Malta is a member of the European Union and part of the Euro-zone, with the local economy being based on the Euro. This alleviates any foreign exchange issues for companies operating within the European Union.

Malta Enterprise sustains and assists newly formed enterprises and aspiring businesses to start operating profitably from day one. A series of beneficial incentives exist for foreign investors, small to medium-sized enterprises, and mega business set-ups. Some attractive support measures include; Micro Invest, Business Advisory Services, Development and Research Grant Schemes, Business START and more.

Reason 2: Tax and legal framework

Malta was one of the few European countries to adopt a complete imputation system, which is one of the main advantages of Malta’s tax system, along with the fact that Malta has an extensive network of double taxation agreements and a refundable tax credit scheme. Malta does not withhold tax on dividends paid to shareholders.

A Company established in Malta would have to account for tax on worldwide income and is typically taxed at the standard corporate tax rate of 35%. However, upon distributing dividends to a non-Maltese resident shareholder, such a shareholder becomes eligible to a tax refund on the Malta tax paid at the company level. The final tax leakage, after the refund is between 5% and 10%.

In addition to the traditional Limited Liability Company, Malta can offer Partnerships – an alternative vehicle to set up a business.

Reason 3: Simple re-domiciliation of companies

A company formed and incorporated or registered under the laws of an approved foreign country, which is similar in nature to a company as recognised under the laws of Malta, may make a request to the Malta Business Registry of Companies to be registered as ‘continued’ in Malta, provided the laws of the foreign country allow this, and provided the company is authorised to do so by its constitutive documents. 

The request to the Malta Business Registry of Companies must be accompanied by a specific pack of documents.

Reason 4: Business support services

Outsourcing any support required to ensure that all business needs are met, can prove to be a valuable cost-saving exercise. Malta boosts a number of professional service providers, such as Dixcart, that can efficiently handle all of the relevant corporate requirements in Malta.

Such services include; submission of annual returns to the Malta Business Registry, provision of director services, secretarial services, auditing and accounting, payroll, recruitment, employment law, compliance and regulatory advice.

Malta is also well-known within EU as a fast developing  Eco-friendly Jurisdiction. Please let us know if you would like any further information regarding the initiatives being developed in Malta and how these might be of benefit: advice.malta@dixcart.com.

Reason 5: Labour force

The workforce in Malta is highly renowned for its qualified and multi-lingual population which consists of both local and foreign workers. In addition to Maltese, English is an official language in Malta, making communication easy within the business itself and also with the Government and clients worldwide.

Italian is also widely spoken and professionals with a good grasp of French, German, Spanish and other languages are common too.

Reason 6: A perfectly located island

Despite being an island, Malta is highly accessible via both sea and air transport links to main and subsidiary airports in mainland Europe, North Africa, Turkey & UAE. Regular and frequent flights to and from Malta are operated by numerous airlines that make use of Malta International Airport.

Malta has flights departing and arriving from key capital cities, ranging from Berlin to Milan to Algiers, Warsaw, Istanbul, and Dubai amongst others. Not only does Malta boast its own national airline, but its airport welcomes a host of major airlines including low-cost ones. For the last decade Malta has become known as a respected Aircraft Hub.

Reason 7: Biggest yacht registry in the EU

Currently, Malta has the largest shipping register in Europe and the sixth largest in the world. In addition, Malta has become a world leader in commercial yacht registration.

The Maltese authorities are approachable and flexible in their practices, while at the same time meticulously follow a rigid framework of guidelines and regulations. This has helped create the cutting edge, for which Malta is known in this sector.

Dixcart Malta is very experienced in and more than happy to help with Yacht Registration.

Reason 8: IT Infrastructure

Malta is relatively advanced when it comes to IT infrastructure.

Types of services include; co-location and hosting services, data centres, cloud services and internet services. Robust government information systems architecture combined with established service providers, ensures that anyone interested in doing business in Malta will have access to secure, affordable, efficient, and reliable systems.

The new residential programme for Digital Nomad in Malta is open to third-country citizens who would usually need a visa to travel to Malta. Funding is also available for IT and Fintech Business in Malta. Malta is also one of the first countries to have nationwide 5G Data coverage.

Reason 9: Immigration and investment incentives

Third Nationals Country nationals can relocate to Malta and get a work permit with an Employer in a transparent procedure through the online application system supported by the Employer. This process is available for applications when abroad and when the individual is already in the Malta. In addition, some programmes are designed for fast-track highly qualified people and can generate tax benefits, such as Highly Qualified Persons (HQP)and professionals in Key Employment.

Additionally, there are nine citizenship and residence programmes are available, allowing qualifying persons that satisfy a robust due diligence process to take up Citizenship or Permanent and Global Residency in Malta. 

Reason 10: Entrepreneurial climate and safety

Major credit rating agencies repeatedly rate Malta as a solid and stable economy, and many prominent economists, describe Malta’s economy as highly stable. This translates into a secure economic climate which is also protected by highly regularised industries, a robust anti-money laundering system and an extremely low probability of natural disasters.

Even during the COVID-19 pandemic, Malta’s economic size made it possible to get back on its feet after a shorter time than many larger economies. Malta’s population has one of the highest rates, of not only being fully vaccinated but already having received booster injections, in Europe.

Additional Information

If you are considering establishing a Malta company and would like further information regarding the support measures for research and development and the business opportunities available through Malta, please speak to Jonathan Vassallo: advice.malta@dixcart.com at the Dixcart office in Malta, or to your usual Dixcart contact.

Additional amendments to UK R&D tax relief were included in the 2022 Autumn Statement. Further details can be found here: Autumn Statement 2022 – Dixcart

From 1 April 2023, a number of changes are expected to the UK Research and Development (R&D) Tax Relief scheme. This Article summarises the key points arising from the July 2022 HMRC draft legislation for R&D tax relief changes, originally announced in the 2021 UK Autumn Budget.

These changes will take effect for accounting periods beginning on or after 1 April 2023. The changes will impact companies claiming under either of the two schemes (SME or RDEC).

The UK Government has a target to raise investment in R&D to 2.4% of UK GDP by 2027 and R&D tax relief forms part of that goal, by reducing the cost of innovation for UK companies.

UK R&D Tax Relief

UK Research and Development (R&D) tax relief can prove an extremely valuable tax relief and, for companies carrying out significant qualifying R&D projects, it may mean not having to pay any corporation tax for many years or even claiming a repayment from HMRC.

For small to medium sized enterprises (SMEs), a deduction of 230% of the amount spent on R&D can be made from taxable profits, reducing the corporation tax due. For loss making companies, the scheme allows relief upfront as a cash payment of 14.5% of the ‘surrenderable loss.’

For further information regarding the benefits available and the process that needs to be followed, please contact: advice.uk@dixcart.com

What are the Key Changes?

• Extending Qualifying Expenditure

The good news is that R&D expenditure categories will be extended to include the costs of datasets and cloud computing – however, these costs need to clearly align with direct R&D and cannot be included in R&D claims where these costs only relate to indirect supporting activities.

In addition to this, R&D in pure mathematics will now qualify for relief and can form part of the qualifying R&D activities of the claimant.

• Refocusing the Reliefs Towards Innovation Undertaken in the UK

One of the most fundamental changes in the Autumn Budget was to refocus the relief provided to activities performed in the UK or qualifying overseas expenditure.

• UK Expenditure

Relevant research and development must be undertaken in the United Kingdom. As such, subcontracted R&D work, and the cost of externally provided workers (EPWs), will be limited to work undertaken in the UK.

• Qualifying Overseas Expenditure

The exemption to the above, is where work undertaken outside the UK is necessary due to geographical, environmental, or social conditions not present or replicable in the UK.

The cost of the work, and availability of workers, are specifically excluded as factors. This list is not exhaustive and, in the short term, is likely to create greater uncertainty as to what might be seen as meeting these criteria.

It is worth noting that, to date, there is nothing in the draft legislation that specifically addresses claims for the cost of staff working on projects in an overseas branch of a UK entity – it is hoped this will be clarified as the Bill goes through the Parliamentary process.

Tackling Abuse

In order to support HMRC’s fight against abuse of the R&D schemes, new due diligence and filing processes will be required through a digital system.

The changes to be introduced to the R&D claims submission process include:

1. claims be made digitally;
2. the categories of qualifying expenditure incurred need to be disclosed, and brief details provided of the R&D activities;
3. claims need to be endorsed by a named senior company officer;
4. the company must inform HMRC in advance of its intention to make a claim within six months of the end of the period to which the claim relates, unless the company has claimed in one of the preceding three accounting periods; and
5. the details of any agent who has advised the company in making the claim needs to be provided.

The most significant change is point 4. The effect of this is that new claimants will now only have a six month window in order to identify that they will make a claim, as opposed to the current two year window of opportunity.

What can your Business do to Help Maintain their R&D Tax Relief Benefits?

On the back of the above proposed changes, businesses that maintain all, or part, of their R&D activities overseas will need to re-evaluate their potential R&D claims. If your business falls into this category, you will need to consider the practical, commercial, and cost implications of maintaining your current structure versus onshoring to the UK. 

We have identified the pros and cons of each scenario below.

Scenario 1: Keeping your R&D Activities Overseas

Benefits of keeping your R&D activities abroad:

• commercial needs,
• expertise,
• most cost-effective option,
• changing something that is not broken. You have the right people, infrastructure and processes in place so why change it?

With the introduction of the new rules, the obvious loss is that qualifying overseas expenditure will be disqualified from 1 April 2023.

However, the impact of this depends on the type of business you are. For example, if you have an R&D intensive business with the majority of costs arising from overseas activities, you should expect to see a substantial reduction in your R&D tax relief claims as opposed to one that is not R&D intensive.  

Scenario 2: Relocating your R&D Activities to the UK

As discussed above, the notable advantages and sacrifices of keeping your R&D activities overseas are in turn, for the short-term anyway, the opposite if you were to relocate the activities to the UK. This will of course depend on each business.

The main benefit of relocating your R&D activities to the UK is inevitably that it will qualify for R&D relief.

However, the change will effectively be like starting new again. The downsides are; the potential difficulty in finding new suppliers and skilled workers, keeping within the budget, costs of relocating/restructuring, training, legal and tax considerations for both company and any employees relocating, etc.

Again, this largely depends on the business as, for some, this may simply be a matter of finding new suppliers within the UK.

Get in Touch

If you would like to discuss the UK R&D tax relief changes featured in the July 2022 draft legislation, or if you would like professional advice regarding strategies to help maintain UK R&D tax relief benefits, please get in touch with Paul Webb in the Dixcart office in the UK or email: advice.uk@dixcart.com

Background

We, at Dixcart in the UK, are asked several times a week if we provide UK resident directors, in order that a UK company owned and sometimes controlled from overseas, can open a UK bank account.

The position is not so simple. Before a UK bank will open a bank account for a UK company that is owned from abroad, there are many compliance and commercial hoops to jump through. Appointing a UK resident director will not magic these away.

Bank Accounts

Banks will not be willing to open accounts where they do not see the opportunity to make a profit. If the proposed account will receive a dividend once or twice a year which is then paid on, leaving only enough to pay the costs of the company, the banks will conclude that the compliance cost of opening such an account will far exceed the money that can be made by providing that banking service. It is just common sense.

Incorporation of a UK Company Run from Outside the UK

Many overseas companies who want to ‘dip their toe’ into the UK market will often want to incorporate a UK company but run it from outside of the UK. They then find it difficult or impossible to open a UK bank account with the end result that we receive several requests every week to act as a director of a UK company owned from outside of the UK. 

UK Director Responsibilities and Associated Fees

Many might think that a professional at Dixcart would be willing to be named as a UK resident director, sign a bank application, and then occasionally sign things as and when requested. 

In reality, if you are a director, you have onerous responsibilities and really need to understand the business, take the key decisions for that business, and ensure that you manage and control that business. 

Clearly one would take the advice of clients, but at the end of the day the ‘buck stops’ with the director. That is why the cost of this service normal carries a risk fee of £5,000 per annum plus a charge for the director’s time costs. In addition, Dixcart would only be willing to accept the position if Dixcart UK did all of the; accounting, company secretarial and tax compliance services for the company. For a relatively quiet holding company the total annual cost is likely to be a minimum £20,000 per annum plus VAT at 20%.  For a trading company the cost is likely to be greater.

The First Year of Operation

In the first year the costs would be higher because you would also have set up fees including; company formation, VAT registration, ICO registration and dealing with commercial contracts and shareholders agreements. The time spent dealing with the potential bank is also likely to be significant, without the guarantee of successfully opening an account.

What are the Banks Looking For?

The banks will typically want to see a business plan that clearly sets out the business opportunity and has budgets and cash flows. They will expect to know who the likely customers and suppliers will be and the size and frequency of deals. They often want to meet the people behind the business and understand how their business is to be done and be confident that there are sufficient human resources to run the business from the UK. Clients are more likely to be successful if they try and open the account with a UK correspondent of the home country bankers.

There are some industries and geographic locations that most banks just will not do business with. Any structure that looks like its prime purpose is tax planning, they will not be keen on either.

Tax Residency Needs to be Considered

The question of tax can be problematic, where the company is in effect being run from outside the UK, as it is likely to mean that, even if you have UK resident directors, the company may be tax resident in the jurisdiction of the individuals managing the day-to-day activity of the company. 

UK companies are tax resident in the UK by virtue of the place of their incorporation. The exception to the rule is where a double tax treaty deems them to be resident in another country. This would typically happen where there is a tie breaker clause in the double tax treaty with the UK, and management and control are not in the UK.

Re-domiciliation of Companies to the UK

The UK is keen to attract genuine businesses to the UK. As well as attracting new businesses the UK is interested in attracting existing businesses to move to the UK. The UK has recently carried out consultation on the introduction of legislation to permit the re-domiciliation of foreign companies into the UK.

Normally when an overseas business wants to set up in the UK, they will want to send people from their own organisation to get things going. There are various visas that can be applied for, and the UK company will need to apply for a sponsor licence. Our Dixcart immigration lawyers can assist with advice regarding visas and guide you through the application process.

What can Dixcart do to Help?

For genuine businesses, with a well thought out business proposal Dixcart can definitely be of help. 

We are a team of Accountants, Lawyers, Taxation, and Immigration advisors who work together to assist new businesses successfully establish themselves in UK. We also operate a business centre with high quality fully furnished offices of varying sizes.

If you wish to discuss setting up a business in the UK, please contact Laurence Binge at the Dixcart office in the UK: advice.uk@dixcart.com.

Action Still Needed

The Deadline Has Passed – Action Still Needed

The deadline of 31 January 2023, for the registration of overseas entities with property interests in the UK, with Companies House has now past.

An estimated 13,000 relevant overseas entities had not registered by the deadline, approximately 40% of the total. 

Considerable work needs to be committed to the verification process, before an application for registration can be made.  

In addition, overseas entities that owned a qualifying estate on February 28, 2022 and have subsequently disposed of their interest, are also caught by the rules.

A summary is listed below. For comprehensive detail, please see our previous article here.

Who needs to register?

The beneficial owner of any overseas entity (being a corporate body, partnership or other legal person) governed by the laws of a country or territory outside of the United Kingdom that owns, leases or disposes of qualifying real estate.

Submission of information and verification

The register is a digital service with information submitted in English.

Before any application for first registration or later updating applications/rectifications and amendments can take place, the information will be subject to formal verification by a relevant person.

Broadly, a relevant person includes an independent legal professional, financial institutions, auditors, estate agents, auction platforms etc. 

Once the information has been verified the relevant person will need to confirm to the  Companies House Registrar that it has completed verification in accordance with the new Act and regulations and provide a  statement complying with Part 2 (5) of The Register of Overseas Entities (VPI) Regulations 2022.  If the relevant entity has made no relevant dispositions between 28 February 2022 and the date the application is made, the application must state this.

The information itself must be retained by the relevant person for a period of 5 years.

What happens once registration is accepted?

Companies House then publish the identity on a public register and assign a unique Overseas Entity ID. The name of the relevant entity and their agent will be available to the public on the Companies House website. The Overseas Entity ID will be required by the Land Registry before it registers any dealings relating to real estate in England & Wales.

The 2022 Act requires registered entities to update their information annually.

Secondary legislation allows individuals to be able to protect some of their information from public disclosure in limited circumstances (if it can be shown that an individual, or the people they reside, with will be at serious risk of violence or intimidation).

Failure to comply with registration and/or within the time limits imposed?

In England and Wales a person guilty of an offence is liable on summary conviction to a daily fine of up to £2,500 or unlimited fines and a prison sentence of up to 5 years. Failure to register will also prevent any dealings with the real estate in question.

What can Dixcart do to help you?

We can keep you up to date of the latest developments, assist and advise you on your obligations and aid in collecting the required information.

We can also verify the required information for you and make the application for registration to Companies House and communicate the unique Overseas Entity ID number to you as well as process annual returns.

Additional Measures in the Future

Following the introduction of the  Economic Crime (Transparency and Enforcement) 2022 Act (“ECTE ACT”), which came into force on 01 August 2022, the UK Government is now seeking further measures with the introduction of the Economic Crime and Corporate Transparency Bill, which is already past Committee stage in the House of Commons. 

The register of overseas entities will be amended to maintain consistency with changes intended to the Companies Act 2006.

Amongst the other far reaching and significant changes intended by the Bill are:

• reforms to Companies House including the introduction of identity verification for all new and existing registered company directors
• reforms to prevent the abuse of limited partnerships by tightening registration requirements and increasing transparency
• additional powers to seize and recover suspected criminal crypto assets by boosting criminal confiscation powers
• reforms to give businesses more confidence to share information in order to tackle money laundering and other economic crime
• new intelligence gathering powers for law enforcement and removal of nugatory burdens on business.

Additional Information

If you have any questions or think you may need to register your overseas entity, please get in touch with the Dixcart office in the UK: advice.uk@dixcart.com.

Malta Enterprise currently offers an variety of diverse funding options, aimed at developing and enhancing small to medium sized businesses on the island. In this article we focus on the Soft Loan. It is designed to support existing businesses to; accelerate plans to establish new products, enter a new geographic market, address environmental concerns, and/or digitise processes.

Companies that meet the requirements can benefit from a Soft Loan covering part of the funding requirements, up to €1,000,000.

How Does it Work?

An eligible undertaking may be supported through a soft loan to:

a) facilitate a development or expansion project based on a business plan to develop a new product or enter a new geographic market

b) address environmental issues such as; water usage, water treatment, waste treatment, reduction, and reuse

c) optimise business processes through digitalisation and advanced technologies

d) projects aimed to achieve a high level of sustainability

Supported projects must have an implementation period which is not longer than eighteen months and the loan may cover up to 75% of the costs related to the proposed project, including the; procurement of assets, wage costs, know-how and other non-recurring costs.

Details About the Loan

It is important to note that the loan is by way of collateral, secured by a special ‘hypothec’ covering at least fifty percent (50%) of the loan amount. The loan amount cannot exceed:

a) €1,000,000maximum fundingthat must be repaid over a five year term. For organisations involved in road freight transport, the maximum funding is €500,000.

b) Alternatively, if the loan is to be re-paid over ten years, the maximum funding is €500,000, or €250,000 for organisations involved in road freight transport.

Interest Rate

Interest Rate

Malta Enterprise charges a very competitive rate of interest that is not lower than 0.5%, established after considering the project and the prevailing European Central Bank reference rate.

The amount not covered by the loan issued by Malta Enterprise, must be financed through a loan issued through a commercial bank and/or through the reserves of the organisation, or other funds considered to be the organisation’s own funds, which must be specifically allocated to the project and deposited with a Commercial Bank.

The loan is repayable within a period of five years, or ten years as outlined above, and Malta Enterprise may agree a moratorium of a maximum twenty-four months for the loan to the relevant organisation, as long as the repayment remains scheduled to be completed within the five or ten year period, as applicable.

Additional Assistance in Malta

This support measure can be combined with the other assistance, such as: The Research and Development Grant: https://www.dixcart.com/setting-up-a-company-in-the-eu-malta-funding-solutions/

How Can We Help You?

Dixcart Malta have a wealth of experience across financial services, offering legal and regulatory compliance insight and helping to implement transformational technology and organisational change. 

Our team of professionals can assist you with the application process and make recommendations with regards to the funding being proposed, as well as preparing the relevant paperwork to ensure a smooth and seamless process, to obtain the relevant finance required.

We will guide you each step of the way and detail the specific criteria required, depending on the activity of the company.

Additional Information

For further information about Malta and the assistance available to companies, please contact Jonathan Vassallo, at the Dixcart office in Malta: advice.malta@dixcart.com. Alternatively, please speak to your usual Dixcart contact.