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Glossary

Place of effective management

Where a company's real strategic decisions are made — many countries treat a company as tax-resident there, regardless of where it is registered.

Registration is only half of corporate tax residency. Most countries also look at where a company is effectively managed and controlled — where the directors actually meet and make decisions. A company incorporated offshore but run from your home country can be treated as tax-resident, and taxed, at home.

Why it matters

This is the rule that defeats the “register a company in a 0% country and pay no tax” shortcut. If you manage the company from where you live, that is usually where it — and often you — will be taxed.

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