Scotland offers a Limited Partnership (LP) commonly referred to as a SLP that can be categorized as an offshore company, though it has been a feature of the Scottish financial system for over a century and though bears some resemblances to your traditional tax haven, has some important differences.
Scotland is relatively unknown in the world of tax havens, though the offshore or non-resident company formation industry is very strong and is quite an attractive offshore centre that offers many of the same advantages.The United Kingdom is a global financial and business leader and is the centre of a number of international trade and commercial enterprises.
Similarly, though the UK is known to have a relatively standard tax rate, and as such is not considered a ‘tax haven’, yet it gives individuals and companies the opportunity to incorporate as an LP with a zero corporate tax. There is what is called a UK LLP or English LLP which is, however, different from the Scottish LP.
A Limited Partnership is an agreement that is made with at least two partners and though an LP, upon its formation becomes a separate legal entity, for tax purposes it is transparent. Therefore, it is free from all UK taxation if all of its income and activities are made overseas, though it is the responsibility of the partners to pay taxes within their country of residence. A Scotland LP is governed by the Partnership Act of 1890 which lays down the foundation and regulations of the company.
A properly structured Scottish LP partnered with appropriate international companies, together with nominee services will create a respectable international offshore corporate structure that will give both confidentiality and respectability while remaining completely tax free.
For more information about Scotland as an offshore jurisdiction see here.
Table of Contents:
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|Scotland LP||Corporate Details|
|Type of Entity||Limited Partnership (LP)
|Type of Law||Common Law|
|Governed by||Partnership Act 1890
Limited Partnerships Act 1907
|Registered Office in Dominica||Yes|
|Shelf company availability||Yes|
|Our time to establish a new company||3-4 Days|
|Minimum government fees (excluding taxation)||20 GBP|
|Access to Double Taxation Treaties||No|
|Share capital or equivalent|
|Standard currency||Pounds Sterling|
|Minimum paid up||GBP 2|
|Usual authorized||GBP 1000|
|Bearer shares allowed||No|
|No par value shares allowed||No|
|Publicly accessible records||No|
|Location of meetings||Anywhere|
|Corporate directorship allowed||Yes|
|Publicly accessible records||No|
|Corporate shareholder allowed||Yes|
|Location of meetings||Anywhere|
|Local or qualified||No|
|Requirements to prepare||Yes|
|Requirements to file accounts||No|
|Publicly accessible accounts||Yes|
|Recurring Government Costs|
|Minimum Annual Tax||GBP 100|
|Annual Return Filing Fee||GBP 15|
|Requirement to file annual return||Yes|
|Migration of domicile permitted||No
In order to form a SLP a registration form or LP must be filled and signed by all the partners in the proposed company. The following information must be included:
Please note: Overseas limited partnerships cannot be registered. The business address must be an area of the UK/Scotland where the principal place of business is situated. After registration it is then possible to change the area of principal business.
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In order to register a company, this is what the process will look like:
You can open a corporate bank account in most countries around the world with a Scottish company. We have banking connections in dozens of countries, though the ones we recommend will be dependent on your situation as some banks require in-person visits, higher capital, more due diligence, and references, while others have minimal requirements.
We suggest getting in touch for a consultation as there are many variables that go into finding the best place to open a bank account for your company.
Scottish Limited Partnership’s are transparent entities, in that for UK tax purposes that are not treated as being taxable entities by the HMRC, though it is a separate legal entity and can enter into contracts and own assets, sue and be sued.
For all SLP companies that do not carry out any operations within the UK and/or Scotland, and do not derived any income from within the UK and Scotland, and are whose members are not UK residents are exempt from paying local UK corporate tax.
All profits or income derived from the SLP are distributed to the limited partners, which remains untaxed, if given the conditions above. Furthermore, there are no taxes on dividends, interests, royalties, rents, compensations, bonuses or commissions.
Anonymity, Confidentiality and Disclosure
All financial records are publicly. The disclosure of beneficial ownership are not required to be submitted to authorities, though it must be submitted to the Registered Agent, which is held on a confidential basis. Nominees members are allowed to be used.
The benefits of a limited liability is that, all limited partners are liable only to the amount of the contribution within the company.
There is a minimum required capital of GBP 2 with a usual authorized amount of GBP 1000.
Financial Statements required
Not required to file accounts with the Revenue Service, but a SLP must prepare accounts, and have detailed accounts which show the good standing of the company.
A company sectary is not required
Company meetings of an SLP may take place anywhere in the world
Principal Corporate Legislation
The principal pieces of corporate legislation that related to SLP’s are the Partnerships Act of 1890 and the Limited Partnerships Act 1907
Type of Law
It is required that a SLP have at least (2) two partners. One partner must be named the General Partner who takes on the responsibility of management of the company and are obliged to take on the debts and responsibilities of the SLP, whereas other partners entering into the SLP would be classified as a limited partner, whose responsibilities are limited to the amount contributed to the SLP and are not liable for any expenses or debts taken on in the future.
A Partner may leave the company without the LP needing to dissolve. A Partnership agreement should be made upon the entering into and formation of an SLP so as to have clearly defined regulations, profit distributions and policies outlined between members. If any changes are made concerning the role of any of the partners, the Register of Companies must be notified within seven days of the changes being made.
There are a few restrictions on trading and doing business in such areas including but not limited to: insurance, assurance reinsurance, fund management, collective investment schemes, and trust management.
There are no exchange controls in Scotland
Powers of the Company
A SLP is a separate legal entity, though for tax purposes it is considered to be tax transparent, that is the tax burden is based upon the individuals or partners of the company who pay taxes individually in their home country.
Registered Office required
A registered office is required to be kept in Scotland
No local presence required, but the place of business is first registered in Scotland, where then it can be transferred to any other country.
There are no audit requirements for a SLP
It is required that an SLP file an annual return ever (12) months from the date of the company’s formation. A SLP must submit the relevant tax declaration form (form SA800) to HMRC annually.
Shelf Companies available
Yes Shelf companies are available.
Time required to form offshore company
3 – 4 days for initial registration, the whole process may take between 4-6 weeks
The name of the company can not used words including, but not limited to: bank, building society, royal, trust company, trustee company, royal, chamber, cooperative etc.
Language of Name
Names of Company requiring a special licence or permission
A company may not use the words including, but not limited to: bank, insurance, trust without the appropriate licence. For a complete list of names please contact the Companies Registry.
Permitted limited liability suffixes
A SLP must have ‘Limited Partnership’ or its abbreviation L.P. after the name of the company
Access to Double Tax Treaties
A SLP does not have access to UK/Scotland’s Double Taxation Treaties.
Government Annual Fee
Businesses register a company in Scotland because international corporate structures provide asset protection and tax reduction possibilities that are found only in non-resident legal structures. Scotland offers both a safe and stable offshore jurisdiction with strong confidentiality laws, a favorable tax regime and the ability to benefit from a corporate business environment that is decidedly business-centric.
The government and regulatory bodies seek to attract regional and international businesses by providing business-friendly policies to attract investors and entrepreneurs into the country.
Scotland company registration costs vary, which is why we do not include them on our website. Prices depend on the legal and corporate services required, as well as secretary, auditing and signatory services which are often needed (though not always) if you are incorporating a non-resident company.
Registration and incorporation fees for 1st-year companies vary anywhere from 1000-5000USD with 2nd-year fees ranging anywhere from 500-2000USD. However, even these figures are not always the case, as all of this depends on the services required, so beware of any service provider that states their fees exactly, as you will be disappointed in seeing that number change. Get in touch for a price quote.
In order to set up an offshore company in Scotland, you need to fulfill the necessary requirements which mean: (1) pay registration costs (2) get your company name approved (3) submit company documents (Articles of Incorporation, Memorandum of Association etc...) (4) appoint a director(s)/member(s) and (5) get a registered office and secretary if applicable.
Once your company is formed you can open a corporate bank account which will require KYC and AML verification. All of the steps above can be done virtually, except some countries do require physical in-person visits in order to open a bank account. Get in touch to know the details, as this changes regularly. Once all these steps are completed you will have the incorporation documents sent to your physical address.
Opening a business bank account is definitely possible and is one of the main reasons why businesses open a foreign corporation in the first place. However, it often can be the most challenging part of any offshore incorporation process because of the requirements and documents needed in order to satisfy Anti Money Laundering (AML) and Know Your Customer (KYC) laws.
That being said, some jurisdictions are harder than others and we will assist you through the entire process.
Yes, we can! Offshore Protection has been establishing companies around the world for nearly three decades. We have engaged in client legal and corporate services, including opening companies, offshore trusts, getting financial licenses, and accounts in dozens of countries around the world. Get in touch to find out more.
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*Note for U.S. citizens: US citizens are limited in their tax reduction possibilities due to FATCA and CFC laws. Opening an offshore company can increase privacy and asset protection, but you can not eliminate your taxes without giving up your citizenship. If you are a US citizen you are obligated to pay taxes on all worldwide income. Read more here about FATCA and CFC laws.
Disclaimer: Offshore Protection strives to keep information on this website updated, however, laws and circumstances are subject to change. All information on this website is for reference purposes only and does not constitute legal or tax advice. Contact Offshore Protection for specific advice regarding your situation.
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