Can an EU biz register an LLC in UK, but operate from the local country?

Can an EU biz register an LLC in UK, but...

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A sales consultant based in an EU country wants register an LLC here in the UK, but run the main consulting arm of the business out of local EU country. He feels that the 'prestige' of a UK-registered company will add credibility and put his business ahead of the local competition. In future, he hopes to expand to Europe and UK. Through his contacts, he has a permanent address in the UK available to use to register the LLC, and base the accounts function via a bookkeeper here in the UK to do the invoicing and admin work. The business development & consulting work will be done from his home country, where he lives & resides. Any employees he takes on will most probably be based from the local EU country.

Two questions:

1. Is this arrangement possible, assuming he legitimately registers an LLC in the UK and plans to pay CT here?

2. As his turnover exceeds the VAT threshold (£81K), he will charge VAT on the services as a taxable supply at the UK rate of 20%. Any purchases made will most likely be local (subject to 25% VAT). If he buys stationary locally for example, can he reclaim the input VAT paid at the 25% rate against the output VAT collect from consulting fees paid by his clients, or will the stationary be treated as if he purchased it in the UK?

Many thanks

Replies (3)

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By User deleted
13th Sep 2014 07:52

1. Yes he can register a limited company (as an LLC is known here) and as you have rightly said it will pay tax on its worldwide income and gains. However, do check the local tax laws and the tax treaty as well so it isn't taxed where the director lives in.

2. His company will need to be registered in the UK for VAT before it could charge VAT. If the supply is about services and the place of supply is outside the UK, the taxman may refuse registration in the UK. Even if registered for VAT in the UK you can't straightway claim back VAT paid in other EU countries - there're some form filling and processes involved. 

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By zebaa
13th Sep 2014 08:53

What about a EU company?

He could also form a EU company. You need to go into this a lot more to see if it is really worthwhile. My guess is, for a consultant, most likely not.

For a basic overview try the link below.

 

http://en.wikipedia.org/wiki/European_Company_Regulation

 

 

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By The Innkeeper
13th Sep 2014 23:38

An LLC
Is actually a company incorporated in one of the states in the USA

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