# Running UK Ltd Business from Spain



## minty75 (May 10, 2011)

Hi, 

I have come across this website and have been trawling through it for information over the last few weeks and have found out a lot of the information we need to move. I would like to say it is nice when you read through other posts and find out that people are asking all the same questions we have. 

My family which consists of my wife and I, our two boys (2 & 4) and then grandparents (early 60’s) are all moving to Southern Spain towards the end of the year. We are looking between Malaga down to San Roque and no further than 30 minutes inland from there. 

I am hoping someone can answer the following question related to running your own UK business but living in Spain. 

Anyway on to my question.

We are in the lucky situation of running our own online UK ltd company which we have been doing for the last 8 years and as this can be run from anywhere in the world we have decided that for lifestyle choices the right place is Spain. We currently pay all our taxes in the UK and our earnings are made up of a small wage each and the rest is paid through dividends. We could easily just be paid through dividends. 

Our business is run from home so we have no need for business premises and the way our business is set up no one ever knows the location we work from. We have a serviced office and address in London and all our calls are answered by a receptionist and our mail is forwarded on by them. 

If we move to Spain I assume as the company is based in the UK and only doing business in the UK we would still have to pay Corporation tax to the UK. Would I be right in thinking if we were residents in Spain we would then have to pay tax on our income from dividends in Spain? Is my understanding of that correct and if so does anyone know % tax rate our dividends would come under. 

Also we have a family member that is also employed by the company that would move with us and would it be easiest to set them up as an Autonomo or can they just be employed by a UK company but pay their tax in Spain? 

Also a question I have wondered if spending 183 days in any country makes you resident, how does anyone know that you have spent those days in that country (what with European borders not being monitored anymore?)

Any advice anyone can give is most welcome 

Thanks for your help in advance

Minty


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## 90199 (Mar 21, 2010)

One simple answer to your tax question. Please seek expert advice from an accountant in the U.K. and an accountant in Spain.

Regarding residencia in Spain, you will need a N.I.E. number, Spain cannot work without a number, but it is no big pain obtaining the same and it does make life so much simpler. I needed mine to report a fault on the telephone, absolutely bonkers, but that is Spain. However my main advantage is that being a resident of the Canary Islands, my internal Spanish air and ferry fares are half price!!

Good luck with your move,

Hepa


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## Alcalaina (Aug 6, 2010)

minty75 said:


> Also a question I have wondered if spending 183 days in any country makes you resident, how does anyone know that you have spent those days in that country (what with European borders not being monitored anymore?)
> 
> Minty


Remember those machine-readable passports that are scanned every time you leave and enter the UK ...? 

But seriously, like any form of tax declaration there is an element of trust.


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## gus-lopez (Jan 4, 2010)

"Also a question I have wondered if spending 183 days in any country makes you resident, how does anyone know that you have spent those days in that country (what with European borders not being monitored anymore?) "

The onus is on you to prove you haven't , not on them to prove you have !


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## minty75 (May 10, 2011)

Alcalaina said:


> Remember those machine-readable passports that are scanned every time you leave and enter the UK ...?
> 
> But seriously, like any form of tax declaration there is an element of trust.




I understand that if you are flying, but if you are using Eurotunnel or ferries or even just driving from one European country to another your passport is never scanned. As I said I earn my money over the internet and as long as I have an internet connection I could work. Just an analogy but if I was to buy a camper van and drive around Europe only spending a month at a time in a country, which country should I pay my tax in? I am assuming the UK as I am originally a UK citizen but I do think with the morden world and the way people can now work it is very difficult to pin down exactly which country you are earning and therefore paying tax in.


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## minty75 (May 10, 2011)

Hepa said:


> One simple answer to your tax question. Please seek expert advice from an accountant in the U.K. and an accountant in Spain.
> 
> Regarding residencia in Spain, you will need a N.I.E. number, Spain cannot work without a number, but it is no big pain obtaining the same and it does make life so much simpler. I needed mine to report a fault on the telephone, absolutely bonkers, but that is Spain. However my main advantage is that being a resident of the Canary Islands, my internal Spanish air and ferry fares are half price!!
> 
> ...


Thanks Hepa, 

I am speaking with my current accountant in the UK and I am out in Spain in July so I think I will organise a meeting with a Spanish accountant that specialises in this area for advice.


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## Stravinsky (Aug 12, 2007)

minty75 said:


> Also a question I have wondered if spending 183 days in any country makes you resident, how does anyone know that you have spent those days in that country (what with European borders not being monitored anymore?)


I think maybe you are confusing fiscal residency with the residency that is now signing on the list of foreigners. They are two different things

I run a UK based online Ltd Company from here. Yes you have to pay corporation tax on the company as it is a UK Ltd Company. As stated, go see accountants .. in general though if you become a tax resident here then you will have a tax burden here.


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## lynn (Sep 25, 2008)

The 183 day rule is not the only criteria for deciding where you should be paying your tax. They also take into account where your main residence is, where your children go to school etc etc.


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## DunWorkin (Sep 2, 2010)

Hi Minty, welcome to the forum.

We were in a very similar situation to you. We ran an internet business in the UK for 30 years. It was not a limited company but a partnership (my husband and myself).

We moved to Spain in 2004 and, until recently, continued to run the business. All our clients were UK based and we invoiced in GBP. Our business bank account is also in the UK.

We pay our income tax in the UK and have continued using our same UK accountant. 

Every year, as part of our tax return, we have to state when and for how long we have been in the UK. We have never been asked to prove this.


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## minty75 (May 10, 2011)

Stravinsky said:


> I think maybe you are confusing fiscal residency with the residency that is now signing on the list of foreigners. They are two different things
> 
> I run a UK based online Ltd Company from here. Yes you have to pay corporation tax on the company as it is a UK Ltd Company. As stated, go see accountants .. in general though if you become a tax resident here then you will have a tax burden here.





Hi Stravinsky, 

Thanks for your reply. I was messing around with some figures to see if we just drew a wage from the company and paid taxes in Spain and our liability works out about £2K more a year living in Spain but I could live with that. I did see either on this forum or another forum someone saying if you are the main Directors (My wife and I own 100% of the business) and your main place of residence is Spain then you need to open up a branch in Spain. Does that sound correct to you? Again to re-iterate all our business is done in the UK with UK company's and we wouldn't be doing any business in Spain, although of course we would be living there. 

Just wanted to pick your brain as you are obviously in a similar situation as us. 

Thanks 

Minty


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## 90199 (Mar 21, 2010)

How glad I am that I am retired Reading this thread , it sounds very complicated

Hepa


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## Stravinsky (Aug 12, 2007)

minty75 said:


> Hi Stravinsky,
> 
> Thanks for your reply. I was messing around with some figures to see if we just drew a wage from the company and paid taxes in Spain and our liability works out about £2K more a year living in Spain but I could live with that. I did see either on this forum or another forum someone saying if you are the main Directors (My wife and I own 100% of the business) and your main place of residence is Spain then you need to open up a branch in Spain. Does that sound correct to you? Again to re-iterate all our business is done in the UK with UK company's and we wouldn't be doing any business in Spain, although of course we would be living there.
> 
> ...


I can see no logical reason why you would have to open a branch in Spain ... and in fact with the business I run it would be pointless. I have "members" all over the world, but none here so what would be the point

The tax levels here are indeed higher than the UK. But of course normal business expenses coming out of the business are not taxable 

Look into salary versus directors bonus.

In fact my business is a UK Limited Company with more than one director. One of them lives in the UK, I am shown as living in Spain. The UK company pays UK corporation tax in the UK, and that is not an issue for the Spanish tax man to even be worried about as it is a UK company, not an individual.


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