In most jurisdictions there is a requirement under local company legislation that directors should prepare accounts and present them to the shareholders at the Annual General Meeting. However, where there is no tax to be assessed on the profits of the company, there is rarely a requirement to present the accounts to any government authority or file them on the public register. Even if the accounts do not need auditing it is good business practice for them to be prepared in accordance with the relevant companies law so that all shareholders and directors have access to – and can be seen to have access to – relevant financial information upon which proper business decisions can be made.
Sovereign Corporate Services provides full accounting and finance services for a wide range of businesses. All members of our team are qualified chartered accountants who are experienced in providing professional bookkeeping services for the maintenance of company accounts as well as the preparation of financial reports. We also provide audit assistance.
Sovereign Asset Management (SAM) was formed as a stand-alone fully regulated asset management company to provide investment advice and other asset management services to Sovereign Group clients. The firm is based in Gibraltar and regulated by the Gibraltar Financial Services Commission (GFSC). SAM is consequently authorised to passport its services into other EU countries.
Gibraltar-based RegisterAnAircraft.com (RANA) is the aviation division of The Sovereign Group. Combining the experience acquired over 20 years in the field of aircraft registration and offshore company management, RANA offers a complete range of professional and highly tailored services to aircraft owners and operators worldwide.
Sovereign is able provide introductions to a number of banks in the UAE and elsewhere in the world with which we have long-term relationships. Sovereign can also assist with account opening procedures.
Employee Benefit Trusts (EBTs)
An EBT is a discretionary trust established to incentivise and help retain a company’s staff. The beneficiaries are the employees and former employees, or their dependents. Contributions to an EBT can be made by the company itself or by individuals associated with the company, typically its directors and/or shareholders.
It is possible for a UK-domiciled person to transfer shares in a company to its EBT without triggering an inheritance tax (IHT) charge. The shares settled into an EBT will no longer form part of the individual’s estate on death. Provided that the trust deed is carefully drafted and managed correctly by professional trustees, the ten-yearly charges and exit charges applicable to UK discretionary trusts should not apply.
An EBT is governed by UK law. It can be set up and administered in Gibraltar, the Isle of Man, Guernsey or Malta. As an EU member state, Malta provides an extra layer of planning should an individual/settlor return to the UK at some stage. Sovereign’s Dubai office can assist with the setup of these trusts so please contact us for more information.
Insurance is one of the most effective ways to manage risks and protect your assets, and is a vital part of the wealth management process. Gibraltar-based Sovereign Insurance Services (SIS) provides a full range of insurance broking services – from home, contents, travel, accident and life cover through to more complex products such as “key man”, professional indemnity and kidnap and ransom cover – at the most competitive pricing levels available in the international insurance markets. SIS is licensed by the Gibraltar Financial Services Commission to act as an insurance intermediary for general insurance business within the European Economic Area (EEA) but also has strategic partnership arrangements with a series of underwriters and brokers throughout the international insurance community so as to be able to meet a client’s insurance requirements anywhere in the world.
International Tax Planning – It is relatively straightforward to set up or purchase a company but it is vital to get proper advice on how to structure the ownership of that company, how it should be administered and how to organise its commercial arrangements. Every case is different and a high level of expertise is required to ensure that the advice is up-to-date, effective and fully compliant. Once we have understood your personal and business requirements, Sovereign is in a unique position, through its global network of offices, to advise on a suitable structure which will meet those needs and should result in significant tax savings.
Gibraltar-based RegisterAYacht.com (RAY) is the marine division of the Sovereign Group. It was formed in 2000 to provide marine corporate and administration services to yacht owners, as well as to maritime law firms, yacht managers and brokers and other professional firms involved in the yachting industry. Initially established to register vessels under the British Red Ensign, RAY is now registering, administering and managing yachts – both pleasure and commercial – on a worldwide basis.
Overseas Property Ownership
Sovereign assists many of its clients with the acquisition of real estate worldwide. We advise on tax and structuring and can manage the transaction process and financing arrangements. With our regional knowledge of property ownership laws and regulations, along with our tax planning expertise, we can help you reduce any potential exposure. Most people who own or intend to own property abroad will not be fully conversant with local legal procedures or taxes – stamp duties, municipal and wealth taxes – and may not fully recognise the longer term implications in terms of potential exposures to capital gains tax, inheritance tax or forced heirship rules. Substantial benefits may be derived through the use of corporate, trust or foundation structures to address these issues.
By outsourcing your payroll you can free up your valuable time and resources to concentrate on the important business of running your company. Sovereign can provide a comprehensive yet flexible outsourced payroll service tailored to each of our client’s specific requirements.
Pension plans are an important component of all wealth planning. Sovereign offers a range of retirement savings solutions and pension plans including Qualifying Recognised Overseas Pension Scheme (QROPS), Qualifying Non-UK Pension Scheme (QNUPS) and other retirement savings options.
Under UK legislation, effective from April 2006, expatriates or UK residents who have a demonstrable intention to move overseas may transfer the value of their UK pension rights to a non–UK pension scheme and thus potentially avoid exposure to UK tax and many of the UK pension fund restrictions. Sovereign has developed a market-leading range of HMRC-recognised pension products, including QROPS and QNUPS, in the world’s leading jurisdictions for pension transfers – Gibraltar, the Isle of Man and Malta.
An international retirement savings plan is a low cost, highly efficient method to plan your retirement and long-term future. It enables you to accumulate wealth to fit your financial circumstances as they change. There is no need for a regular fixed monthly commitment as assets can be added to the plan at any time. Free from income or capital gains tax, retirement fund growth will be maximised from the outset. International retirement savings plans can be established as individual plans, joint plans for spouses or as multi-member plans.
Most onshore countries have provisions in their tax legislation whereby any company, no matter where it is incorporated, that is managed or controlled from within their jurisdiction will be tax resident there and taxable on its worldwide income at local rates. Clients will therefore need to show that the management and control of a company takes place in the UAE, a tax-free jurisdiction. In the case of free zone companies, this must be an individual. Sovereign will generally provide directors.
Trademark and Intellectual Property Services
The intellectual property (IP) associated with a business name or system can be one of its most valuable assets – but only if it is properly protected. Any business that wishes to establish a national or international identity should take steps to protect the use of its name, logo or other IP, such as patent rights, formulae/processes, designs, trademarks, franchises, licence agreements, “know-how” and copyrights. Given the importance of IP to modern businesses, Sovereign has established an intellectual property division that specialises in registration, monitoring, advice and proactive assistance.
Income from IP rights may be derived by way of royalties. As with other sources of income, the tax planning of IP should focus on maximising the after-tax profits. To ensure that arrangements made to receive royalties are effectively constructed, it is necessary to analyse how various countries treat the payments of royalties, whether tax is withheld on such payments and how the income receipts and expenditures are treated.
Trusts have many applications and advantages, including the protection and preserving of assets, tax planning or just avoiding the expense and delays of obtaining probate under a will. They also provide a high degree of confidentiality. The use of trusts as a means of holding and passing on family wealth, even for modest estates, has increased dramatically in recent years.
Unlike a company, a trust is not a legal entity. It is best described as a relationship; an arrangement whereby property is transferred from one person (the settlor) to another person (the trustee) who holds the property for the benefit of specified people or objects (the beneficiaries). A trust deed sets out the terms and conditions upon which the trustees must hold and administer the trust assets. The trust deed also sets out the rights and interests of the beneficiaries.
Whilst the UAE is not a traditional “trust jurisdiction”, Sovereign administers trusts from its Dubai office and our licensed trust corporations in Gibraltar, Guernsey, the Isle of Man and the Turks and Caicos Islands can provide services. Fees for drafting a trust deed and for the provision of trustee services will be quoted on a case-by-case basis. For more information on the setting up of a trust and how it can assist you and your family, please speak to a consultant.
UAE property holding structures
The general rule in the UAE is that inheritance issues related to Muslims shall be dealt with in accordance with Shari’ah principles, and for others, the law of the deceased’s home country should apply. However ultimately it is up to the UAE courts to decide which law would apply, on a case-by-case basis.
The application of Shari’ah law on inheritance can be circumvented by purchasing / transferring the property into the name of an offshore company. If the investors are husband and wife, both the spouses can be made equal shareholders in the company. The Memorandum of Association can include a clause stipulating that upon the death of one of the shareholders, the other shareholder becomes the sole owner of the company, who in turn “owns” the property.
Since 1 January 2011, the Jebel Ali Free Zone (JAFZA) offshore company is the only offshore company that is permitted to own property in Dubai. To ensure the asset is shielded from local inheritance laws, the shares of a JAFZA company are put into a non-UAE offshore company, normally a BVI company. This then fall under Common Law and simplifies the inheritance procedures significantly.