PE rules for Swiss or US Corporation

[Marzio]

In order for a business to have a permanent establishment in country A it has to register a branch there and carry on business there. If the business is buying and selling financial instruments on international exchanges via a company registered in Switzerland and a stock broker registered in the US, article 7 won't apply for Hungary.

Why do you think in the DTA between CH and HU they differentiated between a place of management and a branch?

Because you can have a place of management without a branch so a PE could be created even without registering a branch.

Also it's in OP best interest to create a PE in Hungary because HU levies 9% taxes instead of ~12% (depending in which canton the company is formed) in CH.

No dividends but wouldn't the DTA apply to regular business income too?

DTA only applies to dividends, interest and royalties.

 

[JohnLocke]

Swiss companies require a lot of substance and a resident director (for ltd.s). So they will be Swiss resident in any case.
It can be very well possible that such a company will regarded as domestic company in high tax EU place, depending on management etc..

Totally agree. If the Swiss company is managed in Switzerland you will only pay corporate tax in Switzerland and not anywhere else.

Be sure to structure the company correct to avoid any troubles. Substance i.e. real office etc and Management must be in Switzerland.

 

[miketrnd]

Interesting. I was under the impression the requirement was more like a local nominee director.

Swiss Nominee Signatory fulfills legal requirements of being an official point of contact of the company in Switzerland for local authorities, however they do not require to have a 'director' title or engage in company's business.

That's from one of the service providers