Scotland - LP/Other jurisdictions

Scotland is a part of the United Kingdom, a leading global financial and business centre and an important jurisdiction for international tax planning. The UK is known internationally as a jurisdiction with a standard level of taxation; hence it has no image of a ‘tax haven’. At the same time, the UK law provides for the possibility to incorporate and use companies with zero tax rate - LP (Limited Partnership).

An LP is a partnership of at least two members that is incorporated by filing registration forms (form LP 5) with the Registrar of Companies of Scotland. Accordingly, after incorporation procedures are fulfilled, the Registrar issues a Certificate of Incorporation, as well as all other corporate documents are executed - general powers of attorney, trust declarations, etc. 

Scottish LP’s with foreign members that do not carry on any commercial operations in the UK and receive no revenue in its territory are not liable to taxation there. Under the UK tax laws, an LP is not considered as a separate tax subject in the country, and taxes on profit derived by the LP shall be paid by its members (''Partners'') on a pro rata basis in accordance with their interest in the LP, at the place of their residence. 

For example, a Scottish LP with a Panama company and a BVI company as partners, which receives income abroad, is exempted from taxes in the UK, and the partners pay taxes in the countries of their incorporation, if provided for by the law of the relevant country. As on the BVI and in Panama the tax rate is 0%, in this case general tax of the Scottish LP amounts to 0%.

Therefore, a Scottish LP with appropriate corporate structure and nominee partners from tax-free jurisdictions will be a perfect business instrument with zero tax rate.