Countries that do not deem Foreign Corporations a Local Resident?

[BerlusconiSchmidt]

What countries, according to their written laws, do not automatically deem a foreign company also a local Resident company for Tax purposes IF the sole Director of that Foreign company is a resident of this specific country?

For example: 100% Shareholder and Director of a UAE company, resident in Australia, the company would automatically be deemed a local Tax resident and hereby taxed at the local corporate tax rate.


What countries explicitly do NOT apply this rule and clearly say offshore companies remain such, and are not taxable locally, regardless of the residency of the Director and center of management?

 

[Sols]

Costa Rica and Panama and are examples. Place of incorporation determines tax residence. They are territorial tax jurisdictions, which means taxation is based where the activities of the company takes place and profits derive from — regardless of tax residence.

Hong Kong is similar.

 

[daniels27]

Costa Rica and Panama and are examples. Place of incorporation determines tax residence. They are territorial tax jurisdictions, which means taxation is based where the activities of the company takes place and profits derive from — regardless of tax residence.

Hong Kong is similar.

What means similar? As far as I know, you need to pay tax in Hong Kong when you manage a company from there:

https://www.cr.gov.hk/en/faq/non-hk-company/registered.htm

(You get around the audit though.)

 

[Sols]

What means similar?

Similar in that the fundamental principle is territorial tax and that tax residence isn't really a factor considered, instead it's the location of where business activities take place.

All three might technically have a risk that your income is deemed taxable if the sole director moves there. Only Hong Kong seems to actually be doing anything about it, though. Costa Rica and Panama are far less concerned.

Hence similar, but not the same.

 

[daniels27]

Similar in that the fundamental principle is territorial tax and that tax residence isn't really a factor considered, instead it's the location of where business activities take place.

All three might technically have a risk that your income is deemed taxable if the sole director moves there. Only Hong Kong seems to actually be doing anything about it, though. Costa Rica and Panama are far less concerned.

Hence similar, but not the same.

Yes, but in Hong Kong still many get away with their Bahamas company run from Hong Kong without troubles. But I would be careful there.