A leading campaign group seeking to take Britain out of the European Union was set up by an offshore company that offers tax avoidance services to “high net worth individuals”, the Observer can reveal.

Leave.EU, which has been backed by the UK Independence party (Ukip) leader, Nigel Farage, and describes itself as “Britain’s fastest growing grassroots movement”, was incorporated in the United Kingdom as a wholly-owned subsidiary of a finance firm based in low-tax Gibraltar that specialises in “international wealth protection”.

The offshore firm STM Fidecs boasts on its website of expertise in maximising tax efficiencies for entrepreneurs and expatriates and of “structuring international groups, particularly separating and relocating intellectual property and treasury functions to low- or no-tax jurisdictions”.

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STM Fidecs’s website adds: “With its recently introduced 10% tax rate for companies, its local source basis of taxation and special tax regimes available for high net worth individuals and working expatriates, Gibraltar can provide some interesting opportunities.”

The multimllionaire Ukip donor Arron Banks, who now owns Leave.EU, was until recently a “substantial” shareholder in STM Fidecs’s parent company.

Leave.EU has asked the Electoral Commission to designate it as the official “leave” campaign, which would mean it would be given broadcasting airtime, a public grant and spending limits.

Emma Reynolds, a Labour MP and former shadow minister for Europe, questioned the patriotism of an organisation with such links to tax avoidance. She said: “Leave.EU claim to have Britain’s best interests at heart, but taxes pay for our schools and hospitals. The truth is that Britain is better off in Europe, which brings us jobs, growth and investment.”

Leave.EU – whose official name on Companies House Records is Better for the Country Ltd – was incorporated in July by STM Fidecs, which was the sole shareholder until August. Ownership then passed to Banks, a former Tory donor who defected to Ukip, pledging £1m to Farage’s party.

The father of five, who is worth around £100m, has been a director of 37 companies, three of which are dissolved and some of which are based in Gibraltar or the Isle of Man.

Banks said those campaigning to keep Britain in the EU lacked his patriotism, adding that he had “nothing to hide”. He said: “Big deal, I am an international business man and I asked STM to set up the company for me, which they did. Better for the Country Ltd is registered in the UK and subject to tax etc, like any other UK-registered company.

“It’s fully owned by me and I pay tax in the UK. To suggest I avoid tax is utter rubbish. I am a UK taxpayer and I choose to be, I have nothing to hide and have already published my cheque made payable to HMRC last year. For the ‘remain’ side to suggest I am unpatriotic is laughable, when they advocate daily UK taxpayers subsidising the EU project. I am much more patriotic than they are. I support Great Britain, they support the EU.” A spokesman added that Banks paid £1.8m in tax last year.

The Leave campaign group’s other “ambassadors” include financier Jim Mellon, who made his £850m fortune by investing in emerging markets, including Russia. It has been reported that Mellon – who is resident on the Isle of Man, where the top rate of income tax is 20% and there is no capital gains tax, wealth tax, stamp duty, death duty or inheritance tax – has donated up to £100,000 to Leave.EU.

In an interview with the Financial Times in 2012, Mellon, who also has a home in Ibiza, boasted: “I might pay $1m or $2m for a painting that I really like – for instance, a painting from the 19th-century Grand Salon in Paris.” He added: “I regularly spend £100 on a bottle of red burgundy in a restaurant – and I don’t need a deal to celebrate.”

Despite previously criticising corporations that aggressively avoid tax, Farage has also thrown his weight behind the campaign group. It is competing with the cross-party Vote Leave for official status.

Farage told activists at Ukip’s party conference: “As I see it at the moment, there is only one group that is absolutely clear what it stands for. Ukip will now stand hand in hand with Leave.EU. We will work together as a united force of Eurosceptic groups that want to leave the EU.”

David Cameron is due to provide the president of the European Council, Donald Tusk, with a letter spelling out the British government’s renegotiation terms on Tuesday.

He has pledged to offer the British public an EU referendum by the end of 2017, by which time he wants to be able to tell voters that the country’s terms of membership have been improved.