Glossary
The terms. Brief, with sources.
What a term means, where it is regulated and why it matters for entrepreneurs from Germany, Austria and Switzerland. Linked from the guides and the country pages.
55 terms · as of 17 September 2026
1
- 183-day rule
- Two different rules carry this name. In double tax treaties it decides which state taxes salary from short foreign assignments (Article 15 OECD Model). Many states also treat you as tax resident after more than 183 days of presence. In Germany, however, a home alone is enough. Spending fewer than 183 days in Germany does not end your tax liability there.Source: BMF · DBA-Übersicht (Art. 15 OECD-MA) ↗See also: Habitual abode (gewöhnlicher Aufenthalt) Tax residence (steuerliche Ansässigkeit) 60-day rule (Cyprus) Guides: Double taxation treaties: how to use a treaty after your move Moving your residence properly: how to end your tax liability in Germany Countries: Greece · Non-Dom Bulgaria · Wohnsitz / EOOD
6
- 60-day rule (Cyprus)
- The 60-day rule makes you tax resident in Cyprus. You spend at least 60 days a year in Cyprus and no more than 183 days in any other state. You are not tax resident elsewhere and have a business, job or directorship and a home in Cyprus. All conditions apply together (as of 09/2026). A German home can still challenge Cyprus’s treaty precedence.Source: Tax Department · Steuerreform 2026 ↗See also: 183-day rule Non-dom status Tax residence (steuerliche Ansässigkeit) Tie-breaker rule Guides: Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question Moving your residence properly: how to end your tax liability in Germany Countries: Cyprus · Non-Dom
A
- Annual return
- With the annual return your company reports its key details to the register in Ireland, Malta or Cyprus each year. It confirms shareholders, directors, secretary, capital and registered office. In Malta it is due on the anniversary of registration, in Ireland and Cyprus with the financial statements. It is a register duty, not a tax return, and GCS basic administration files it.
- Apostille
- An apostille is an official certificate that lets a public document be recognised in other contracting states. It confirms the signature, seal and authority of the issuer (1961 Hague Convention). Foreign banks and registries regularly ask for it on incorporation documents, powers of attorney and register extracts. In Germany regional courts, district governments or the Federal Office of Administration issue it, depending on the document.
B
- Beneficial owner (wirtschaftlich Berechtigter)
- The beneficial owner is the person who ultimately owns or controls a company. That is anyone who directly or indirectly holds more than 25% of the capital or controls more than 25% of the votes. Anyone with comparable control counts too (section 3 GwG). Beneficial owners go into the German transparency register. Foreign registers such as the UK PSC register follow the same logic.Source: § 3 GwG ↗See also: PSC (person with significant control) BOI report (Beneficial Ownership Information) KYC (Know Your Customer) Nominee director (Treuhanddirektor) Guides: What forming abroad costs: the package, the fees and the items beside it After incorporation: annual filings, bookkeeping, registers. The compliance calendar of a company abroad Business account abroad: which documents the bank expects Countries: United Kingdom Estonia
- BOI report (Beneficial Ownership Information)
- With the BOI report a company tells the US agency FinCEN who really owns it. The basis is the Corporate Transparency Act. Under the final rule of August 2026, companies formed in the United States are permanently exempt, so your US LLC does not file one. Foreign companies registered to do business in the US still report (as of 09/2026). The bank identifies the owners as part of its own review.
C
- CFC taxation (Hinzurechnungsbesteuerung)
- CFC taxation is how Germany taxes certain low-taxed passive profits of a foreign company directly in the shareholder’s hands, as if already received (sections 7 to 13 AStG). It concerns companies controlled by people taxable in Germany. Once you move abroad it generally no longer applies, and EU companies with real local activity use the substance test.Source: §§ 7–13 AStG ↗See also: Low taxation (Niedrigbesteuerung) Passive income (passive Einkünfte) Substance test (Substanznachweis) Substance (economic substance) Guides: Choosing a legal form abroad: LLC, Ltd, OÜ or Sp. z o.o.? What forming abroad costs: the package, the fees and the items beside it After incorporation: annual filings, bookkeeping, registers. The compliance calendar of a company abroad Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question Place of management: how to run your foreign company on a sound tax footing CFC taxation: when it applies and how to set up your foreign company correctly Double taxation treaties: how to use a treaty after your move Why banks decline: the most common reasons and how to avoid them Countries: Cyprus Malta Estonia Georgia Bulgaria · Wohnsitz / EOOD
- Charging order
- A charging order is a court order that limits a personal creditor to your distributions from the LLC. Company assets and voting rights stay out of reach. In Wyoming it is the only remedy, even for a single-member LLC (W.S. 17-29-503). It protects against personal creditors, not against the company’s own creditors.
- Company secretary
- The company secretary keeps a Ltd’s registers and minutes, files the annual returns and watches register compliance. Ireland, Cyprus and Malta require one by law. In Ireland a Ltd with a single director needs a separate secretary. UK private limited companies have not needed one since 2008. The role is administration, not management.Source: CRO · Company officers ↗See also: Section 137 bond Annual return Registered office Guides: Choosing a legal form abroad: LLC, Ltd, OÜ or Sp. z o.o.? What forming abroad costs: the package, the fees and the items beside it After incorporation: annual filings, bookkeeping, registers. The compliance calendar of a company abroad Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question Countries: Cyprus Malta Ireland
- Confirmation statement
- With the confirmation statement your UK company confirms to Companies House that its register details are correct. That covers directors, shareholders, PSCs, registered office and business activity. It is due at least once a year, even for dormant companies. Filed digitally it costs GBP 50 per twelve-month payment period (as of 09/2026). It replaced the annual return in 2016 and is not a tax return.Source: GOV.UK · Filing your confirmation statement ↗See also: PSC (person with significant control) Annual return Registered office Guides: What forming abroad costs: the package, the fees and the items beside it After incorporation: annual filings, bookkeeping, registers. The compliance calendar of a company abroad Countries: United Kingdom
- Contact person (Estonia)
- The contact person is your OÜ’s mandatory Estonian address when you run the company from abroad. Only providers admitted by law and holding an Estonian address can take the role, such as notaries, law firms, auditors or licensed service providers. It receives documents from the register and the authorities, but replaces neither management nor accounting. It is the Estonian counterpart of a registered agent.Source: RIK · Establishment of a private limited company ↗See also: e-Residency Registered office Registered agent Guides: Choosing a legal form abroad: LLC, Ltd, OÜ or Sp. z o.o.? What forming abroad costs: the package, the fees and the items beside it After incorporation: annual filings, bookkeeping, registers. The compliance calendar of a company abroad Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question Place of management: how to run your foreign company on a sound tax footing Countries: Estonia
- CRS / Automatic exchange of information (AEOI)
- Under the CRS, banks automatically report accounts of foreign tax residents to the holder’s home state. The OECD standard runs through the tax administrations. In Germany the Federal Central Tax Office receives and distributes the data every year. More than 90 jurisdictions take part, including Georgia and every EU member state. So your home tax office routinely knows about your foreign account.Source: BZSt · Common Reporting Standard ↗See also: FATCA KYC (Know Your Customer) Tax residence certificate Guides: After incorporation: annual filings, bookkeeping, registers. The compliance calendar of a company abroad Double taxation treaties: how to use a treaty after your move Business account abroad: which documents the bank expects Fintech or bank? Payment providers and traditional banks compared Why banks decline: the most common reasons and how to avoid them Countries: Georgia
D
- Deregistration of residence (Abmeldung)
- Deregistration tells your municipality that you have moved abroad, within two weeks of moving out (section 17(2) BMG). For tax it is an important indication. Your unlimited tax liability ends when you in fact have neither a domicile nor a habitual abode in Germany. Deregistering and giving up the home together make a clean break.Source: § 17 BMG ↗See also: Domicile (Wohnsitz, section 8 AO) Exit tax (Wegzugsbesteuerung) Tax residence certificate Guides: Business account abroad: which documents the bank expects Exit tax: how to plan your move with a GmbH shareholding Moving your residence properly: how to end your tax liability in Germany Avoiding German exit tax: how the right structure before the move eliminates or reduces it Countries: Italy · Neue Ansässigkeit Bulgaria · Wohnsitz / EOOD
- Disregarded entity
- Disregarded entity means US federal income tax ignores your LLC and treats it as part of you. A single-member LLC is one by default unless it elects otherwise, and its income is attributed to you. For foreign owners without US business activity that usually means no US income tax, with taxation where you are resident. How your country of residence classifies the LLC follows its own law.Source: IRS · Single member limited liability companies ↗See also: Single-member LLC Form 5472 Entity classification test (Typenvergleich) Guides: Choosing a legal form abroad: LLC, Ltd, OÜ or Sp. z o.o.? After incorporation: annual filings, bookkeeping, registers. The compliance calendar of a company abroad Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question Countries: United States
- Domicile
- Domicile is the common-law term for a person’s permanent home, separate from residence and tax residence. You acquire it at birth (domicile of origin) or by settling permanently (domicile of choice). Cyprus also treats anyone as domiciled who was tax resident there in 17 of the last 20 tax years. Non-dom status then ends (as of 09/2026). Do not confuse domicile with the German Wohnsitz.
- Domicile (Wohnsitz, section 8 AO)
- You have a domicile wherever a home is actually available to you. What counts is whether you visibly keep and use it, not registration or intention (section 8 AO). If a home in Germany stays usable after your move, you remain fully taxable there. This also applies to a home kept by family or parents.Source: § 8 AO ↗See also: Habitual abode (gewöhnlicher Aufenthalt) Tax residence (steuerliche Ansässigkeit) Deregistration of residence (Abmeldung) Tie-breaker rule Guides: Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question Double taxation treaties: how to use a treaty after your move Business account abroad: which documents the bank expects Moving your residence properly: how to end your tax liability in Germany Extended limited tax liability: how to put your German interests in order before the move Countries: Poland Cyprus · Non-Dom Italy · Neue Ansässigkeit
- Double tax treaty (Doppelbesteuerungsabkommen, DBA)
- A double tax treaty decides which of two states may tax a type of income, so you do not pay twice. Germany largely follows the OECD Model Convention. The Federal Ministry of Finance publishes the treaties in force. A treaty does not lower tax by itself, it only allocates the right to tax. You get its protection only with residence and treaty entitlement in the other state.Source: BMF · DBA-Übersicht ↗See also: Tax residence (steuerliche Ansässigkeit) Tie-breaker rule Permanent establishment (Betriebsstätte) Withholding tax (Quellensteuer) Guides: Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question Place of management: how to run your foreign company on a sound tax footing CFC taxation: when it applies and how to set up your foreign company correctly Double taxation treaties: how to use a treaty after your move Exit tax: how to plan your move with a GmbH shareholding Moving your residence properly: how to end your tax liability in Germany Extended limited tax liability: how to put your German interests in order before the move Countries: Poland Greece · Non-Dom
E
- e-Residency
- e-Residency is a digital identity from the Estonian state that lets you, as a foreigner, form and run an OÜ online. You use it for Estonian online services and electronic signatures. It gives neither a residence permit nor citizenship and does not make you tax resident. Where the OÜ is taxed depends on where you run it from.Source: e-Residency · Republik Estland ↗See also: Contact person (Estonia) Tax residence (steuerliche Ansässigkeit) Place of management (Ort der Geschäftsleitung) Guides: What forming abroad costs: the package, the fees and the items beside it Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question Place of management: how to run your foreign company on a sound tax footing Why banks decline: the most common reasons and how to avoid them Countries: Estonia
- EIN (Employer Identification Number)
- The EIN is the nine-digit tax number the US tax authority IRS gives your company. Your LLC needs it for Form 5472, the account and payment providers. Without a US social security number the application runs on Form SS-4. In the GCS package we handle the application. The EIN is not a business licence.Source: IRS · Employer identification number ↗See also: Form 5472 Single-member LLC KYC (Know Your Customer) Guides: Choosing a legal form abroad: LLC, Ltd, OÜ or Sp. z o.o.? What forming abroad costs: the package, the fees and the items beside it Business account abroad: which documents the bank expects Fintech or bank? Payment providers and traditional banks compared Countries: United States
- Entity classification test (Typenvergleich)
- The classification test is how the German tax office classifies a foreign company as a corporation or a partnership. It compares management, liability, transferability of interests, capital contribution, duration and profit allocation (section 1 KStG). A US LLC can count as a corporation even though it is tax-transparent in the United States. It matters as long as you are taxable in Germany.Source: § 1 KStG ↗See also: Disregarded entity Single-member LLC CFC taxation (Hinzurechnungsbesteuerung) Guides: Choosing a legal form abroad: LLC, Ltd, OÜ or Sp. z o.o.? Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question Place of management: how to run your foreign company on a sound tax footing CFC taxation: when it applies and how to set up your foreign company correctly Exit tax: how to plan your move with a GmbH shareholding Countries: United States
- Estonian CIT (Poland)
- Under Estonian CIT your Polish company pays corporate income tax only when it distributes profits, not on retained earnings. The optional regime (ryczałt od dochodów spółek) requires individual shareholders and minimum employment. Certain income structures are excluded. Events equal to a distribution trigger the tax too, and hidden distributions are taxed earlier. The name points to Estonia, but the conditions are Polish.Source: podatki.gov.pl · CIT estoński ↗See also: Sp. z o.o. Ryczałt (lump-sum tax on revenue) Withholding tax (Quellensteuer) Guides: Choosing a legal form abroad: LLC, Ltd, OÜ or Sp. z o.o.? After incorporation: annual filings, bookkeeping, registers. The compliance calendar of a company abroad Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question Countries: Poland
- Exit tax (Wegzugsbesteuerung)
- Exit tax covers the gain in holdings of at least 1% in corporations when your unlimited tax liability in Germany ends (section 6 AStG). The shares then count as sold at fair market value. It applies to anyone who was fully taxable for at least seven of the last twelve years. If you hold no such shares, it does not affect you. Everyone else has the tax calculated before moving and plans the payment.Source: § 6 AStG ↗See also: Extended limited tax liability (erweiterte beschränkte Steuerpflicht) Domicile (Wohnsitz, section 8 AO) Tax residence (steuerliche Ansässigkeit) Deregistration of residence (Abmeldung) Guides: Choosing a legal form abroad: LLC, Ltd, OÜ or Sp. z o.o.? What forming abroad costs: the package, the fees and the items beside it Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question CFC taxation: when it applies and how to set up your foreign company correctly Double taxation treaties: how to use a treaty after your move Exit tax: how to plan your move with a GmbH shareholding Moving your residence properly: how to end your tax liability in Germany Extended limited tax liability: how to put your German interests in order before the move Avoiding German exit tax: how the right structure before the move eliminates or reduces it Countries: Cyprus · Non-Dom Italy · Neue Ansässigkeit Greece · Non-Dom
- Extended limited tax liability (erweiterte beschränkte Steuerpflicht)
- Extended limited tax liability lets Germany keep taxing certain German-source income for up to ten years after you leave (section 2 AStG, as of 09/2026). It concerns German nationals who were fully taxable for five of the ten years before leaving, move to a low-tax territory or become resident nowhere, and keep substantial economic interests in Germany. Without such interests it does not apply. Preferential taxation in the new country counts as low taxation, but on its own does not trigger the rule.Source: § 2 AStG ↗See also: Exit tax (Wegzugsbesteuerung) Low taxation (Niedrigbesteuerung) Non-dom status Flat tax for new residents (Italy) Guides: Choosing a legal form abroad: LLC, Ltd, OÜ or Sp. z o.o.? Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question CFC taxation: when it applies and how to set up your foreign company correctly Double taxation treaties: how to use a treaty after your move Moving your residence properly: how to end your tax liability in Germany Extended limited tax liability: how to put your German interests in order before the move Avoiding German exit tax: how the right structure before the move eliminates or reduces it Countries: Cyprus · Non-Dom Italy · Neue Ansässigkeit Greece · Non-Dom Bulgaria · Wohnsitz / EOOD
F
- FATCA
- FATCA is a 2010 US law that makes foreign banks report accounts of US persons to the IRS. Banks that do not report face 30% withholding tax on US-source payments. Germany applies FATCA through an intergovernmental agreement. It concerns US citizens and green-card holders worldwide, not foreign owners of a US LLC. As a German LLC owner you fall under the CRS, not FATCA.Source: IRS · Foreign Account Tax Compliance Act ↗See also: CRS / Automatic exchange of information (AEOI) KYC (Know Your Customer) EIN (Employer Identification Number) Guides: After incorporation: annual filings, bookkeeping, registers. The compliance calendar of a company abroad Business account abroad: which documents the bank expects
- Flat tax for new residents (Italy)
- New tax residents in Italy can pay a fixed annual sum on all foreign income instead of ordinary tax. For covered arrivals from 2026 it is EUR 300,000 a year, available for up to 15 tax years (as of 09/2026). Italian-source income is still taxed normally. Germany treats the regime as preferential taxation that can trigger section 2 AStG.Source: Gazzetta Ufficiale · Legge di bilancio 2026 ↗See also: Non-dom status Extended limited tax liability (erweiterte beschränkte Steuerpflicht) Exit tax (Wegzugsbesteuerung) Tax residence (steuerliche Ansässigkeit) Guides: Extended limited tax liability: how to put your German interests in order before the move Countries: Italy · Neue Ansässigkeit
- Foreign-interest notification (section 138(2) AO)
- If you are fully taxable in Germany and set up or buy a foreign company, you tell your tax office. That covers businesses, permanent establishments and partnership interests. Holdings in corporations are reported from 10% or above EUR 150,000 in cost (section 138(2) AO). The report goes with the tax return, at the latest 14 months after year end (as of 09/2026). This way the foreign company is disclosed.Source: § 138 Abs. 2 AO ↗See also: CFC taxation (Hinzurechnungsbesteuerung) Permanent establishment (Betriebsstätte) Beneficial owner (wirtschaftlich Berechtigter) Guides: Choosing a legal form abroad: LLC, Ltd, OÜ or Sp. z o.o.? What forming abroad costs: the package, the fees and the items beside it After incorporation: annual filings, bookkeeping, registers. The compliance calendar of a company abroad Place of management: how to run your foreign company on a sound tax footing Business account abroad: which documents the bank expects Countries: United Kingdom Ireland
- Form 5472
- Form 5472 is an annual information return in which your US company reports its dealings with you as a foreign owner to the IRS, such as contributions and distributions. The duty applies from 25% foreign ownership; a disregarded entity files it with a pro forma Form 1120. No tax arises from it. With the GCS guide you complete it yourself, or GCS handles it, and the USD 25,000 basic penalty for missed filings never becomes an issue (as of 09/2026).Source: IRS · Instructions for Form 5472 ↗See also: Disregarded entity EIN (Employer Identification Number) Single-member LLC Guides: Choosing a legal form abroad: LLC, Ltd, OÜ or Sp. z o.o.? What forming abroad costs: the package, the fees and the items beside it After incorporation: annual filings, bookkeeping, registers. The compliance calendar of a company abroad Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question Countries: United States
H
- Habitual abode (gewöhnlicher Aufenthalt)
- Your habitual abode is where you stay for more than a passing visit. More than six months in a row in Germany always counts. Short interruptions are ignored (section 9 AO). So you can remain fully taxable in Germany even without a home of your own.Source: § 9 AO ↗See also: Domicile (Wohnsitz, section 8 AO) Tax residence (steuerliche Ansässigkeit) 183-day rule Guides: Double taxation treaties: how to use a treaty after your move Moving your residence properly: how to end your tax liability in Germany Countries: Italy · Neue Ansässigkeit Bulgaria · Wohnsitz / EOOD
- Holding company
- A holding company exists to hold shares in other companies. In Germany, 95% of dividends from holdings of at least 10% and of capital gains are tax-free (section 8b KStG). Malta and Cyprus have similar participation exemptions. A holding is a function, not a tax exemption. Without substance of its own, its income counts as passive and can trigger CFC taxation.Source: § 8b KStG ↗See also: Passive income (passive Einkünfte) Withholding tax (Quellensteuer) Substance (economic substance) Charging order Guides: What forming abroad costs: the package, the fees and the items beside it Place of management: how to run your foreign company on a sound tax footing Business account abroad: which documents the bank expects Fintech or bank? Payment providers and traditional banks compared Avoiding German exit tax: how the right structure before the move eliminates or reduces it Countries: Cyprus Malta
I
- IP box
- An IP box lowers the tax on profits from self-developed software, patents or other intellectual property. Cyprus exempts 80% of qualifying profits, which at 15% corporate tax leaves 3%. Poland taxes qualifying IP income at 5% (as of 09/2026). The benefit is tied to your own development spending (OECD nexus approach). The low burden also counts in the German low-tax test.Source: Finanzministerium Zypern · Tax incentives ↗See also: Knowledge Development Box (KDB) Low taxation (Niedrigbesteuerung) Substance (economic substance) Guides: Choosing a legal form abroad: LLC, Ltd, OÜ or Sp. z o.o.? Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question CFC taxation: when it applies and how to set up your foreign company correctly Countries: Cyprus
K
- Knowledge Development Box (KDB)
- The Knowledge Development Box is Ireland’s IP box for profits from your own research and development. Ireland taxes qualifying profits at an effective 10% instead of 12.5%. The current extension covers accounting periods beginning before 1 January 2027 (as of 09/2026). You need your own development spending in Ireland to qualify (OECD nexus).
- KYC (Know Your Customer)
- KYC means the bank or payment provider checks who you are before opening an account, and keeps checking afterwards. It reviews identity, beneficial owners, business purpose and source of funds. The basis is FinCEN’s customer due diligence rule in the US and the anti-money-laundering directive in the EU. With complete documents the review runs smoothly; GCS prepares them, and the institution decides.Source: FinCEN · Customer Due Diligence Rule ↗See also: Source of funds (Mittelherkunft) Beneficial owner (wirtschaftlich Berechtigter) BOI report (Beneficial Ownership Information) Apostille Guides: After incorporation: annual filings, bookkeeping, registers. The compliance calendar of a company abroad Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question Business account abroad: which documents the bank expects Fintech or bank? Payment providers and traditional banks compared Countries: Georgia United Kingdom
L
- Low taxation (Niedrigbesteuerung)
- A country counts as low-taxed when your foreign company pays little tax there on passive income. The threshold is an income-tax burden below 15% (section 8(5) AStG, as of 09/2026). What counts is the tax actually due after reliefs and refunds, not the headline rate. So even a country with a 15% headline rate can be low-taxed for your company.Source: § 8 Abs. 5 AStG ↗See also: CFC taxation (Hinzurechnungsbesteuerung) Passive income (passive Einkünfte) Extended limited tax liability (erweiterte beschränkte Steuerpflicht) Guides: Choosing a legal form abroad: LLC, Ltd, OÜ or Sp. z o.o.? Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question CFC taxation: when it applies and how to set up your foreign company correctly Extended limited tax liability: how to put your German interests in order before the move Countries: Cyprus Malta Poland Bulgaria · Wohnsitz / EOOD
N
- Nominee director (Treuhanddirektor)
- A nominee director is formally registered as director but acts on the real owner’s instructions. For tax and banking, what counts is who actually decides (section 10 AO). GCS therefore relies on clear structures in which you yourself are on the register. GCS formation packages do not include a nominee director.Source: § 10 AO ↗See also: Place of management (Ort der Geschäftsleitung) Substance (economic substance) Beneficial owner (wirtschaftlich Berechtigter) Guides: What forming abroad costs: the package, the fees and the items beside it After incorporation: annual filings, bookkeeping, registers. The compliance calendar of a company abroad Place of management: how to run your foreign company on a sound tax footing Fintech or bank? Payment providers and traditional banks compared Why banks decline: the most common reasons and how to avoid them Countries: Cyprus
- Non-dom status
- Non-dom is a tax status for people who live in a state without being domiciled there. In Cyprus it frees dividends and interest from the Special Defence Contribution. Since the 2026 reform it can be extended by up to two further five-year periods, at EUR 250,000 each (as of 09/2026). Greece also calls its Article 5A flat tax non-dom. Germany treats the status as preferential taxation (section 2 AStG).Source: Tax Department · Steuerreform 2026 ↗See also: Domicile 60-day rule (Cyprus) Extended limited tax liability (erweiterte beschränkte Steuerpflicht) Tax residence (steuerliche Ansässigkeit) Guides: Choosing a legal form abroad: LLC, Ltd, OÜ or Sp. z o.o.? After incorporation: annual filings, bookkeeping, registers. The compliance calendar of a company abroad Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question Exit tax: how to plan your move with a GmbH shareholding Extended limited tax liability: how to put your German interests in order before the move Countries: Cyprus · Non-Dom Greece · Non-Dom
O
- Operating agreement
- The operating agreement is the internal contract of your US LLC. It covers ownership, management, voting, distributions and exit, and it is not filed with the state. Banks usually ask for it when opening an account. A single-member LLC should have one too, and the GCS package includes it.Source: IRS · Limited Liability Company (LLC) ↗See also: Single-member LLC Registered agent Charging order Entity classification test (Typenvergleich) Guides: Choosing a legal form abroad: LLC, Ltd, OÜ or Sp. z o.o.? What forming abroad costs: the package, the fees and the items beside it Place of management: how to run your foreign company on a sound tax footing Business account abroad: which documents the bank expects Why banks decline: the most common reasons and how to avoid them Countries: United States
P
- Passive income (passive Einkünfte)
- Passive income is income of your foreign company that German law does not treat as genuine business. Anything not on the statutory list of active income is passive and can trigger CFC taxation (section 8(1) AStG). Typical examples are interest, royalties, certain services you help perform and income without substance. So the list decides, not what you call your business model.
- Permanent establishment (Betriebsstätte)
- A permanent establishment is any fixed place where your company does business on a lasting basis, such as an office or a warehouse (section 12 AO). Tax treaties usually define it more narrowly. The state of the permanent establishment taxes the profit earned there. A home office in lasting use can also be one.Source: § 12 AO ↗See also: Place of management (Ort der Geschäftsleitung) Double tax treaty (Doppelbesteuerungsabkommen, DBA) Substance (economic substance) Guides: Choosing a legal form abroad: LLC, Ltd, OÜ or Sp. z o.o.? Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question Place of management: how to run your foreign company on a sound tax footing Double taxation treaties: how to use a treaty after your move Extended limited tax liability: how to put your German interests in order before the move Avoiding German exit tax: how the right structure before the move eliminates or reduces it Countries: United Kingdom Estonia
- Place of management (Ort der Geschäftsleitung)
- The place of management is where the key decisions for the day-to-day business are actually taken (section 10 AO). A company is taxed there, whatever its seat or legal form. If you live location-independently or abroad and decide from there, your company is managed from there too. If you live and decide in Germany, the profits are taxed in Germany.Source: § 10 AO ↗See also: Permanent establishment (Betriebsstätte) Nominee director (Treuhanddirektor) Substance (economic substance) Tax residence (steuerliche Ansässigkeit) Guides: Choosing a legal form abroad: LLC, Ltd, OÜ or Sp. z o.o.? After incorporation: annual filings, bookkeeping, registers. The compliance calendar of a company abroad Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question Place of management: how to run your foreign company on a sound tax footing Fintech or bank? Payment providers and traditional banks compared Why banks decline: the most common reasons and how to avoid them Exit tax: how to plan your move with a GmbH shareholding Avoiding German exit tax: how the right structure before the move eliminates or reduces it Countries: Cyprus Malta Poland United Kingdom Estonia Ireland
- PSC (person with significant control)
- PSC is the UK counterpart of a company’s beneficial owner. Anyone holding more than 25% of the shares or votes, or able to appoint and remove directors, is entered. So is anyone with other significant influence. The public PSC register at Companies House shows name, month of birth and nationality, and identities are verified. A UK Ltd therefore offers no anonymity.Source: GOV.UK · People with significant control ↗See also: Beneficial owner (wirtschaftlich Berechtigter) Confirmation statement BOI report (Beneficial Ownership Information) Guides: Choosing a legal form abroad: LLC, Ltd, OÜ or Sp. z o.o.? After incorporation: annual filings, bookkeeping, registers. The compliance calendar of a company abroad Countries: United Kingdom
R
- Registered agent
- The registered agent receives lawsuits, official service and government mail for your US LLC. The state of formation requires a person or firm with a physical address in that state. It is neither a manager nor a business address. The GCS package includes it for the first twelve months, and basic administration covers it afterwards.Source: Wyoming Secretary of State · Business FAQ ↗See also: Registered office Operating agreement Single-member LLC Guides: Choosing a legal form abroad: LLC, Ltd, OÜ or Sp. z o.o.? What forming abroad costs: the package, the fees and the items beside it After incorporation: annual filings, bookkeeping, registers. The compliance calendar of a company abroad Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question Place of management: how to run your foreign company on a sound tax footing Business account abroad: which documents the bank expects Countries: United States
- Registered office
- The registered office is your company’s official, public address on the register. It exists in the UK, Ireland, Cyprus and Malta. In the UK it must be a physical address in the part of the country where the company is registered. Post and official letters arrive there, but it creates neither an office nor the place of management.Source: GOV.UK · Registered office address ↗See also: Registered agent Substance (economic substance) Place of management (Ort der Geschäftsleitung) Company secretary Guides: Choosing a legal form abroad: LLC, Ltd, OÜ or Sp. z o.o.? Place of management: how to run your foreign company on a sound tax footing Countries: United Kingdom Ireland
- Ryczałt (lump-sum tax on revenue)
- Under ryczałt you pay tax on revenue as a Polish sole trader (JDG) without deducting costs. The fixed rate depends on the activity and ranges from 3% to 17%, for example 8.5% for many services, 12% for specified IT services or 15%. The entry threshold is generally EUR 2 million of prior-year revenue (as of 09/2026). Social contributions (ZUS) come on top. Your activity classification (PKWiU) decides your rate.
S
- Section 137 bond
- The Section 137 bond is an insurance bond that lets your Irish company do without an EEA-resident director. The EUR 25,000 bond runs for two years at a time (section 137 Companies Act 2014, as of 09/2026). It covers fines and tax debts owed to the CRO and Revenue. It replaces a local director, but not management in Ireland.Source: CRO · Company officers ↗See also: Company secretary Nominee director (Treuhanddirektor) Substance (economic substance) Guides: Choosing a legal form abroad: LLC, Ltd, OÜ or Sp. z o.o.? What forming abroad costs: the package, the fees and the items beside it After incorporation: annual filings, bookkeeping, registers. The compliance calendar of a company abroad Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question Countries: Ireland
- Share capital (Stammkapital)
- Share capital is the money or assets shareholders put into their company, as recorded in the register. Legal minimums vary widely. An Estonian OÜ with one shareholder needs EUR 0.01, a Polish Sp. z o.o. PLN 5,000. A German GmbH needs EUR 25,000 (as of 09/2026). The capital stays your company’s property and is not part of any formation fee.
- Single-member LLC
- A single-member LLC is a US LLC with only one owner and the most popular form for location-independent entrepreneurs. For federal income tax it is a disregarded entity unless it elects otherwise (Form 8832). Limited liability stays intact. With a foreign owner it files Form 5472 each year.Source: IRS · Single member limited liability companies ↗See also: Disregarded entity Operating agreement Charging order Entity classification test (Typenvergleich) Guides: Choosing a legal form abroad: LLC, Ltd, OÜ or Sp. z o.o.? Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question Countries: United States
- Small Business Status (Georgia)
- With Small Business Status, individual entrepreneurs in Georgia generally pay only 1% tax on qualifying turnover. Special rules apply above GEL 500,000, and certain activities are excluded (Tax Code of Georgia, as of 09/2026). The status does not apply to an LLC. It suits entrepreneurs who live and work in Georgia.
- Source of funds (Mittelherkunft)
- Source of funds means you show the bank where the money you deposit or put into your company comes from. For larger fortunes the bank also asks how your wealth was built (source of wealth). Banks must ask under the EU anti-money-laundering directive (Directive 2015/849) and similar rules. Keep payslips, tax assessments, sale contracts or dividend resolutions ready.Source: Richtlinie (EU) 2015/849 ↗See also: KYC (Know Your Customer) Beneficial owner (wirtschaftlich Berechtigter) CRS / Automatic exchange of information (AEOI) Guides: What forming abroad costs: the package, the fees and the items beside it Business account abroad: which documents the bank expects Why banks decline: the most common reasons and how to avoid them Countries: Georgia
- Sp. z o.o.
- The Sp. z o.o. is the Polish limited liability company, in full Spółka z ograniczoną odpowiedzialnością. It needs at least PLN 5,000 share capital, full accounting and register filings. Corporate income tax is generally 19%, or 9% for eligible small or new taxpayers. Dividends to individuals are generally taxed at 19% (as of 09/2026). It is the alternative to the sole trader (JDG), where you are personally liable.Source: Biznes.gov.pl · Kapitał zakładowy ↗See also: Share capital (Stammkapital) Estonian CIT (Poland) Ryczałt (lump-sum tax on revenue) Place of management (Ort der Geschäftsleitung) Guides: Choosing a legal form abroad: LLC, Ltd, OÜ or Sp. z o.o.? What forming abroad costs: the package, the fees and the items beside it After incorporation: annual filings, bookkeeping, registers. The compliance calendar of a company abroad Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question Countries: Poland
- Substance (economic substance)
- Substance means your company really exists in its home state, with its own premises, qualified staff and decisions taken locally. Contracts and bank accounts in the company’s name are part of it. Substance decides the place of management, the substance test (section 8(2) AStG) and treaty entitlement. A registered office and a letterbox are not substance.Source: § 8 Abs. 2 AStG ↗See also: Substance test (Substanznachweis) Place of management (Ort der Geschäftsleitung) Nominee director (Treuhanddirektor) Registered office Guides: What forming abroad costs: the package, the fees and the items beside it After incorporation: annual filings, bookkeeping, registers. The compliance calendar of a company abroad Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question Place of management: how to run your foreign company on a sound tax footing CFC taxation: when it applies and how to set up your foreign company correctly Why banks decline: the most common reasons and how to avoid them Avoiding German exit tax: how the right structure before the move eliminates or reduces it Countries: Estonia
- Substance test (Substanznachweis)
- The substance test lets you prove that your EU or EEA company genuinely operates where it is based. With its seat or management there and substantial economic activity, CFC taxation does not apply (section 8(2) AStG). Staff, premises, equipment and real decisions on site make the case. The test is available to companies in the EU and EEA.Source: § 8 Abs. 2 AStG ↗See also: CFC taxation (Hinzurechnungsbesteuerung) Substance (economic substance) Place of management (Ort der Geschäftsleitung) Guides: Choosing a legal form abroad: LLC, Ltd, OÜ or Sp. z o.o.? Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question CFC taxation: when it applies and how to set up your foreign company correctly Countries: Cyprus Ireland Bulgaria · Wohnsitz / EOOD
T
- Tax residence (steuerliche Ansässigkeit)
- Your tax residence is the state that may tax your worldwide income. In Germany a domicile or habitual abode is enough (section 1 EStG). For companies the registered seat or the place of management counts. Your residence decides which treaty applies and which state takes precedence when two states claim you.Source: § 1 EStG ↗See also: Domicile (Wohnsitz, section 8 AO) Habitual abode (gewöhnlicher Aufenthalt) Tie-breaker rule Tax residence certificate Guides: Double taxation treaties: how to use a treaty after your move Business account abroad: which documents the bank expects Moving your residence properly: how to end your tax liability in Germany Countries: Cyprus · Non-Dom Italy · Neue Ansässigkeit Greece · Non-Dom Bulgaria · Wohnsitz / EOOD
- Tax residence certificate
- A tax residence certificate is a tax administration’s confirmation that you or your company are tax resident in its state. It refers to residence within the meaning of a double tax treaty. You need it to claim reduced withholding tax abroad or to prove residence to banks. A foreign certificate does not bind the German tax office, which checks domicile and centre of life itself.Source: BMF · DBA-Übersicht ↗See also: Tax residence (steuerliche Ansässigkeit) Double tax treaty (Doppelbesteuerungsabkommen, DBA) Withholding tax (Quellensteuer) CRS / Automatic exchange of information (AEOI) Guides: Double taxation treaties: how to use a treaty after your move Business account abroad: which documents the bank expects Why banks decline: the most common reasons and how to avoid them Moving your residence properly: how to end your tax liability in Germany Countries: Georgia Greece · Non-Dom
- Tie-breaker rule
- The tie-breaker rule decides which state may tax you when both treat you as resident. The treaty applies a fixed order (Article 4(2) OECD Model Convention). First comes the permanent home, then the centre of vital interests, habitual abode and nationality. Finally the authorities reach a mutual agreement. If you keep a home in Germany, the centre of vital interests usually decides.Source: BMF · DBA-Übersicht (Art. 4 OECD-MA) ↗See also: Tax residence (steuerliche Ansässigkeit) Double tax treaty (Doppelbesteuerungsabkommen, DBA) Domicile (Wohnsitz, section 8 AO) Habitual abode (gewöhnlicher Aufenthalt) Guides: Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question Double taxation treaties: how to use a treaty after your move Moving your residence properly: how to end your tax liability in Germany Countries: Cyprus · Non-Dom Italy · Neue Ansässigkeit Greece · Non-Dom
W
- Withholding tax (Quellensteuer)
- Withholding tax is taken off by the payer before you get the money, typically on dividends, interest and royalties. In Germany this is the 25% capital gains withholding tax plus solidarity surcharge (section 43 EStG). Georgia and Bulgaria generally withhold 5% on dividends. Cyprus and Malta usually withhold nothing on distributions to non-residents (as of 09/2026). A treaty usually cuts the rate only on application with a residence certificate.Source: § 43 EStG ↗See also: Double tax treaty (Doppelbesteuerungsabkommen, DBA) Tax residence certificate Holding company Guides: Choosing a legal form abroad: LLC, Ltd, OÜ or Sp. z o.o.? What forming abroad costs: the package, the fees and the items beside it Which company suits whom: the US LLC, Cyprus, Bulgaria, Estonia, Poland and the residence question Double taxation treaties: how to use a treaty after your move Extended limited tax liability: how to put your German interests in order before the move Countries: Malta
Guides