1. Tax issues on setting up overseas Robert Langston Tax Partner robert.langston@saffery.com 020 7841 4129

2. Forms of doing business Representative office Permanent establishment Subsidiary Joint venture

3. Representative office Limited activities No local filing requirements Fees may be subject to withholding tax UK tax on profits (with credit for withholding tax) Payroll tax requirements

4. Withholding tax on fees (1) £ Fee100 Costs(80) Profit20 Overseas withholding tax @ 30%30 UK tax on profit @ 20%4 less credit for overseas withholding tax(4) 0 Total tax30

5. Withholding tax on fees (2) £ Fee100 Costs(80) Overseas withholding tax @ 30%(30) Loss(10) Loss set against other UK profits10 Reduction in tax on other UK profits2 Total tax28

6. Permanent establishment Fixed place of business or dependent agent Overseas tax on profits Unlikely to be withholding tax on fees Overseas filing requirements UK tax on profits (with credit for overseas tax) –Subject to election for companies Likely to be UK and overseas tax on disposal

7. Subsidiary Overseas tax on profits Unlikely to be withholding tax on fees Overseas filing requirements No UK tax on distribution of profits to company Unlikely to be tax on disposal by company Incentivisation of local employees