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.
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 South Africa and elsewhere in the world with which we have long-term relationships. Sovereign can also assist with account opening procedures.
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.
International Tax Planning for South Africans
Whilst the South African Reserve Bank or Exchange Control Restrictions (EXCON) are still very much a concern, there is a slow but definite tendency to erode this concept and make it more possible for South Africans to invest abroad. Furthermore, South Africa has signed a numerous amount of double taxation treaties that open the gateway for several tax planning opportunities. For those intending to emigrate from South Africa, careful planning could avoid their estates being brought into the tax net of their new home country.
Marine, including Yacht Registration
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.
Most onshore countries have provisions within their tax legislation whereby any company, no matter where it is incorporated, which is managed or controlled from within their jurisdiction will be tax resident there and taxable on its worldwide income at local rates. For example, any offshore company which had UK based directors would be tax resident in the UK and subject to UK tax on its worldwide income. Failure by the directors to declare the liability of the offshore company to UK tax would be an offence under UK law with potentially very serious financial and criminal consequences. Most onshore countries have similar provisions within their tax legislation so it will rarely be advisable for onshore resident clients to act as the directors of an offshore company. To establish that the management and control of the company does take place offshore and the company is therefore tax resident offshore as well as incorporated there we can, and habitually do, provide directors. In most cases this service is essential if legitimate tax savings are to be made.
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.
Structuring Investments into South Africa
Careful consideration must be taken when investing into South Africa. Estate duty and South African exchange controls (Excon) are two of the foremost issues. The restrictions that Excon places on non-residents are essentially of a bureaucratic nature but nevertheless need to be catered for. Also capital introduced into the country after 1 July 1997, may be repatriated at any time but proof thereof will have to be shown before it may be repatriated. The difficulty with Excon is that rules are constantly changing and it is only local banks that receive formal notification of these changes.
Investment may be by share capital or share and loan capital only. Where a portion of the investment is in loan capital, Excon approval is required. The interest on a loan from the holding company is remittable provided that the rate of interest is market related and most importantly is exempt from tax when received by non-residents. Another rule that deserves particular mention is that certain local borrowing restrictions apply to South African companies which are more than 75% foreign owned.
One needs to be aware of the local issues so that proper structuring and appropriate agreements can be drawn up to ensure that local investments are still protected offshore.