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Introducing Jean Luc and his business: Jean Luc is 56 years old, and lives and works in fashion in a little village close to Paris. When one thinks about Paris and fashion the images that come up are usually au couture, top models, top designers, and very expensive, fine and floating clothing. Jean Luc doesn’t fit into this catwalk image. Although Jean Luc has a fashion company, the twist is that his fashion company is dedicated fashion for bikers. Jean Luc makes very good looking, quite expensive clothing for bikers out of leather and other similar materials, which are then beautifully tattoo styled embroidered on the back. It looks very similar to stuff that Harley Davison do.
Jean luc gets part of his stock produced in France, but mainly in eastern Europe. He gives the producers the designs in local producing factories. The designs get produces as quite small series. For instance, jackets: although there are around 50 pieces per series, which is a small number, the hand embroidery that each piece involves makes each piece unique.
Fashion for bikers: Jean Luc creates products with this concept such as jackets, trousers, boots, all sorts of accessories for example wallets, hats, and scarves. Jean Luc’s business is quite big, it’s a 3 million euros turnover business. However, it’s not a massive operation: he is a niche producer. People who come to his store, which is about an hour drive from the Charles De Gaulles Airport, go to a small village, and they pretty much come just to visit his store. People who visit his store have to know about it. One isn’t very likely to casually stroll by and enter at a flight of fancy as it is quite remote. Bikers know his store from word of mouth and biker guides as Jean Luc has been featured in a number of guides for bikers. This insider feel goes very well with the exclusivity of the designs and bikers feel they are buying something special, a piece of biking culture when they visit his store to either buy something for themselves or as a gift to someone. 
A vision: Jean luc has built up the company for many years. He has now reached an age where he is considering semi-retirement. He doesn’t actually want to sell the business. Because Jean Luc really enjoys creating the designs and working, he envisioned a situation in which he is involved with the business, but doesn’t have to put in all the hours that it requires to run a business. he doesn't want to have to sit an office and deal with things like managing his staff, managing his store, or going on business related tips. Instead, he would like to take it easy, take his wife on a couple of bike rides through Europe and simply enjoy himself. In order to achieve this vision Jean Luc has been working towards a transition period. His son has agreed to become a general manager for a while before taking over the business for good in the future.
Expanding the business: Jean Luc had been selling a substantial amount of his stock over the internet. Furthermore, he has partners in a number of countries; affiliates, who sell his bespoke biker clothing. However, the biggest chunk of the business still involves bikers from Paris or bikers driving through Paris to visit his store.
Jean Luc and his son agreed to focus more on the international expansion of the business. They don’t want to do that much business in france any more as they see that there is a big potential for their goods throughout the world. This applies mainly to Europe but also to Asia, where they can sense a great interest. Finding St Matthew eAccounting: Jean Luc and his son recognised that in orer to go ahead with the expansion plans the legal structure of a sole trading business in France was not going to work in their favour in the long term and that it is not the most beneficial solution for them. Many French entrepreneurs are setting up an LTD in the UK. This is due to the fact that setting up and running a business is very expensive, laborious, and requires a lot of administrative effort in France. Going for the option of setting up an Ltd in the UK is a common solution to ease their administrative burden and to a lesser extent optimise their tax situation in France. Jean Luc and his son had heard about this from friends and decided to research whether the option of having a business in UK could be beneficial for their situation. As St Matthew does a lot of google advertising and SEO in French in France, they came across our site whilst researching on the internet, the site, came along for a meeting and asked us for advice on what to do. A solution for Jean Luc: This is not the bog standard situation. In terms of the size of businesses we usually work for, Jean Luc counts as one of our larger clients. We therefore came up with is a solution that we believe was quite unique and that allows Jean Luc to fully benefit from the already established structures as well as the planned expansions.
We proceeded in the following manner: - Keeping the French business in France for tax purposes.
- Setting up the UK LTD company and basing the business that is done outside of France, the selling of products over the internet or international trade, in the UK.
- Setting up an offshore trust on the Channel Islands that holds the intellectual property of the designs.
This means: The intellectual property of Jean Luc's business is held in the trust overseas, and the UK limited company pays a licence fee to the trust for using these designs whenever something is sold overseas.
So how does that work? There is an arrangement between the trust and the limited company for a certain licence agreement, the fees are paid and because it gets paid into the trust, the fees are really tax free. This is fully legal in the UK, there is no problem there, as long as the funds in the trust are not remitted anywhere else. However, the trust generates interest and gives Jean Luc the situation in which he can build up capital in a way that does not require him to put in a lot of hours.
How we help Jean Luc: We have certain contacts in the channel islands that allows us to help Jean Luc to establish this trust on the channel islands. It is initially quite complicated to transfer the IT from the French business to the offshore trust if the IT has some value in the books already. However, that was luckily not the case with Jean Luc, which made things a lot easier. Contracts between the UK Ltd and the trust needed to be set up, for which we have specialized lawyers that we knows and who work with us on a regular basis to help with these kind of transactions. The other services we provide are VAT, help maintaining the trust, help with the export licence, which is required when you sell goods overseas from and to the European Union, as well as the usual year end accounts. Jean Luc now: The total process took around three months. Another three months later Jean Luc was in a position to hand over the management of his company to his son. Accprding to their sucession Jean Luc was still involved in the business to help his son get used to everything. At the same time Jean Luc is managing to happily reduce his hours on an increased basis. So all of this has been quite a success story and Jean Luc is a happy French client and we hope he will be for a long time. Find out more about our services: To find out more about how the VAT Advice and Offshore Company Service that Jean Luc is using with us could fascilitate your own business situation, we invite you to join us in an initial consultation over the phone. This includes an assessment and analysis of your situation. Our services apply to many business related situations, however, if we come to the conclusion that our service is not the right solution for you, we will not take you on as a client.
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