Forming a company abroad is quick. The more interesting question comes afterwards: where will it be at home for tax purposes? The answer is simpler than many people think. A company belongs, for tax purposes, where it is run. Once you understand that, you can set up your structure correctly from day one.
This article shows how to put the place of management where it belongs. It applies to every legal form, from the US LLC to the Estonian OÜ. And it shows why the place of management simply follows the person who makes the decisions.
Seat and management: two connecting factors
Every company has a seat. That is the place named in its articles, so for a foreign company it is the state of incorporation. It also has a place of management. That is where the day-to-day decisions are made.
Germany taxes a company on all its profits if either of the two lies in Germany (section 1 KStG). For your foreign company the seat is clearly abroad. The place of management is therefore what counts. It is a factual place, not a contractual one. That is good news: you can shape it yourself.
In short: for tax purposes, what counts is where your company is actually run.
How the place of management shows
The day-to-day business is what matters. Where do you approve offers, set prices, negotiate contracts and instruct the bank? The annual shareholders’ meeting plays hardly any role. Three questions bring clarity:
- Who decides? Usually you, as founder and managing director.
- Where do you decide? Where you usually work.
- What shows this? Emails, calendars, contracts and travel show where you work.
With a single managing director, that keeps things simple. Management lies where that person lives and works. If they move to Dubai, Limassol or Tallinn and run the company from there, the place of management moves with them (section 10 AO).
In short: management lies where you, as the decision-maker, usually work.
The US LLC: flexible for location-independent entrepreneurs
The US LLC is our main product, and for good reason. It is known worldwide, quick to form and can be run entirely online. A single-member LLC is transparent for US income tax. Without business activity in the United States, a foreign owner usually pays no US federal income tax. Taxation follows the owner’s place of residence (USA country page).
That is exactly why the LLC suits two groups so well:
- Entrepreneurs without a fixed tax residence who work from changing places.
- Entrepreneurs resident in a country without income tax on this income, such as the United Arab Emirates (UAE government portal).
The LLC does not need a US connection. Your customers can be anywhere. If you stay resident in Germany, Austria or Switzerland, the profits are taxed there. The German tax office classifies the LLC using the entity comparison (Typenvergleich). Formation costs €1,800, ongoing administration €1,200.
In short: for tax purposes the LLC follows you to where you live, which is why it suits location-independent entrepreneurs so well.
Registered office and agent: what they do
A registered office is your company’s official address. A registered agent in the United States or a contact person in Estonia receives official mail. That matters for company law, and GCS provides it in every package.
These services do not move the place of management, because nobody makes decisions there. The same applies to e-Residency, the digital access to the Estonian register. You set the place of management yourself through where you work.
In short: the address and agent satisfy company law; the place of management follows where you work.
Permanent establishment: what remains in Germany after the move
Once management lies abroad, a smaller question remains. If the company keeps an office, a warehouse or an agent in Germany, Germany may tax the profit of that permanent establishment (section 12 AO). If you leave no office and no agent behind when you move, that question is settled too.
Running the company from home is not prohibited, by the way. The profits are then taxed in Germany, with the usual returns there. That can be a deliberate choice, for instance for the transition period before the move.
In short: if you leave no office and no agent in Germany, the move gives you a clean break.
Germany, Austria, Switzerland
Austria uses the same yardstick. What counts is the centre of top-level business direction (section 27 BAO). Switzerland looks to the seat or effective administration (Article 50 DBG). A Swiss fiduciary adviser clarifies cantonal specifics.
The same logic therefore applies to readers from all three countries. If you run the company from your new home, it belongs there for tax purposes.
In short: Austria and Switzerland also look at where the company is actually run.
Our recommendation
For location-independent entrepreneurs we recommend the US LLC. It fits especially well if you have no fixed tax residence or live in a country without income tax on this income. The LLC is formed from €1,800 and runs without any presence in the United States. Which company suits which profile is shown in Which company suits whom.
If you are planning an EU corporation, the order is: move your residence first, then incorporate. Suitable residence models are listed under /residency, such as Cyprus with non-dom status or Bulgaria with 10% income tax (as of 09/2026). You then form the company at your new home, for example the Cypriot Ltd from €4,500 or the OÜ from €650. All countries are listed under /jurisdictions.
Two points belong in the plan when you leave Germany. If you hold shares in a corporation, clarify exit taxation beforehand. If German nationals keep larger economic interests in Germany, review extended limited tax liability. How to make the move itself clean is covered in Moving your residence properly.
GCS plans the sequence, forms the company and coordinates the tax advisers in both countries.
What to do now
Write down in three sentences who runs your company, from where and from when. The right structure follows almost by itself. If you live location-independently or in a country without income tax, talk to us about the US LLC. If you are planning a move within the EU, settle your new home first; how GCS plans a move of residence is set out on the service page. Your tax adviser assesses your individual case.