Glossary
Permanent establishment
A fixed place of business — an office, branch or dependent agent — that makes a foreign company taxable in a country even without a local entity.
A permanent establishment (PE) is the threshold at which a country decides a foreign company has enough presence to be taxed there — typically a fixed place of business, a branch, a construction site over a certain duration, or a person who habitually concludes contracts on the company's behalf.
Why it matters
You can accidentally create a PE — and a local tax bill — simply by running your foreign company, hiring staff or signing deals from another country. It is one of the main ways a “tax-free” structure springs a leak.
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