Start up Hubs and Substance

Substance

Substance has become very important and there has been a global move towards companies needing to demonstrate ‘economic substance’. These substance requirements are being applied in an increasing number of jurisdictions around the world, and are particularly relevant in low tax jurisdictions. Start-up Hubs have become a phenomenon in most countries with their main objective to provide work space and support for entrepreneurs, innovators, and small business.

The definition of “economic substance” is relatively straightforward: ‘companies tax resident in a particular jurisdiction need to demonstrate genuine local substance in that jurisdiction’.

Dixcart are fully conversant with the substance requirements in the jurisdictions where we have offices and we have set up ‘Start-up hubs’ – Dixcart Business Centres – to provide companies with a ‘soft landing’, when they establish themselves overseas. These offer serviced offices and the availability of professional services, if required.

Dixcart Business Centres are available in: Cyprus, Guernsey, Isle of Man, Malta, and the UK.

Generally legislation in each jurisdiction introduces a three-stage process:

To identify companies carrying out “relevant activities”; and
To impose substance requirements on companies undertaking relevant activities; and
To enforce the substance

Companies undertaking the following relevant activities are subject to economic substance requirements:

Banking
Distribution/Service Centres
Finance and Leasing
Fund Management
Headquarters
Holding Companies
Insurance
Intellectual Property Holding
Shipping

Please contact: advice@dixcart.com if you have any questions, in relation to substance and start-up hubs.

We can provide you with comprehensive details of the substance requirements in each of the jurisdictions where we operate a Dixcart office and can provide you with information if you need assistance establishing a company and/or if you require serviced office space.

Companies undertaking the following relevant activities are subject to economic substance requirements: