Glossary

Countries count the days differently. Spain and Uruguay look at more than 183 days in a calendar year; Georgia and the UAE count 183 days in any 12-month period, and Greece more than 183 days in any 12-month period. Partial days, short absences and the tax year used all matter.

The day count is rarely the only test. A permanent home, family or main economic interests can make you resident with fewer days, and some countries offer shorter routes, such as the Cyprus 60-day rule or the UAE's 90-day test for residence-permit holders with a home or work there. Staying under 183 days somewhere does not by itself end your residence in another country.

AML rules follow the standards of the Financial Action Task Force (FATF) and require regulated firms to identify clients and beneficial owners, monitor transactions, keep records and report suspicious activity to the national financial intelligence unit. Firms that fail face heavy fines, which is why their checks can feel strict.

Jurisdictions are rated too: the FATF's grey list names countries under increased monitoring, and banks treat counterparties there with extra care. The Cayman Islands, for example, was removed from the grey list on 27 October 2023.

The apostille is issued by a designated authority in the country where the document was issued and replaces the longer chain of consular legalisation. It confirms the signature and seal, not the content, and countries outside the convention still require legalisation.

Residency and citizenship files rely on it. Paraguay requires every civil record to be issued, apostilled and consistent before filing, and Panama asks for an apostilled criminal record certificate with a Spanish translation. Some documents are only accepted if recently issued, so the order of steps matters.

Formally the special regime for inbound workers, it is named after the footballer who used it. Above EUR 600,000 the rate is 47%, savings income is taxed at 19% to 30%, and wealth tax applies only to assets located in Spain. It requires five years of non-residence before the move.

The election has to be made within six months of the start date on the Social Security registration, using form 149. Eligibility depends on the type of activity and is checked by the tax authority.

Anti-money-laundering rules require banks, formation agents and many registers to identify the ultimate beneficial owner, usually anyone holding 25% or more of the shares or votes, or anyone who controls the entity by other means. Where nobody passes the threshold, a senior manager is often recorded instead.

Expect every bank and payment institution to ask for an ownership chart down to the individuals, with identity documents and proof of address for each beneficial owner. Nominee arrangements do not change who the beneficial owner is, and hiding one is a reason for a bank to decline or close an account.

The BVI levies no corporate income or capital gains tax on these companies. Since 2 January 2025 every company files its beneficial owners holding 10% or more with the Registrar, out of public view, and it files an annual financial return with its registered agent within nine months of the year end.

Companies carrying on a relevant activity, such as holding, finance and leasing, headquarters or intellectual property, must meet the economic substance test and report within six months after each financial period. As of October 2026 the BVI is on Annex II of the EU list of non-cooperative jurisdictions, not Annex I.

The established programmes are in the Caribbean, with St Kitts and Nevis, Antigua and Barbuda, Grenada, Saint Lucia and Dominica, alongside a small number of others such as Türkiye and Vanuatu. Applicants usually choose between a government fund contribution and an approved investment such as real estate, and can often include close family.

Every programme vets applicants and family members, and approval is never guaranteed. A second passport can add travel freedom and a plan B, but it does not change where you pay tax: that follows where you live.

Under CRS a financial institution identifies where each account holder, and each controlling person behind a company, is tax resident, then reports balances, interest, dividends and sale proceeds once a year. The authorities exchange the reports automatically with the countries concerned. Most financial centres take part; the United States uses its own regime, FATCA, instead.

In practice CRS ended traditional bank secrecy for tax purposes. When you open an account you sign a self-certification of your tax residency, and the bank reports on that basis. A structure that only works if nobody finds out does not work.

In Hong Kong an individual secretary must ordinarily live in Hong Kong and a corporate secretary must have an office there; a sole director cannot also act as company secretary. The secretary keeps the statutory registers, files annual returns and changes with the Companies Registry and keeps the minutes.

Other jurisdictions are more relaxed: a UK private company, for example, does not have to appoint a secretary. Where one is required, non-resident founders usually appoint a licensed corporate service provider.

Most high-tax countries have CFC rules, and EU member states must apply them to companies under the Anti-Tax Avoidance Directive. The details differ: the control threshold, what counts as low taxation and which income is caught, often passive income such as interest, royalties and dividends.

CFC rules are the main reason a zero-tax company does not by itself reduce its owner's tax. Owners of BVI or Estonian companies, for example, are usually taxed in their country of residence, often under these rules, so the rules of that country decide the outcome.

An international transfer often passes through one or more correspondent or intermediary banks, each of which screens the payment and may deduct a charge. US dollar payments, for example, generally clear through banks with US dollar accounts in the United States.

Correspondent banks apply their own risk rules on top of the sending bank's. That is why a payment can be delayed or returned even when your own bank has accepted the client, and why banks in smaller financial centres are cautious about clients who could put those relationships at risk.

Thresholds differ: Greece asks for EUR 3,500 net a month, Portugal's D8 visa EUR 3,680 a month in 2026, Malta's Nomad Residence Permit a gross income from EUR 42,000 a year, and Spain 200% of its monthly minimum wage, with extra amounts for family members.

Living in a country on such a permit can make you tax resident there, and some offer special treatment: Malta taxes nomad income at 0% for the first 12 months and 10% afterwards. Permits usually exclude or limit work for local clients; Spain allows freelancers up to 20% Spanish clients.

It is the default for an LLC with one owner unless it elects corporate treatment. The LLC itself is not a separate taxpayer: whether US tax arises depends on whether the owner has US-source or effectively connected income, which for many foreign owners serving clients from abroad is not the case.

Disregarded does not mean invisible. A foreign-owned disregarded entity must still file Form 5472 with a pro forma Form 1120 every year, by fax or mail, and the owner's country of residence usually taxes the profits as the owner's own income.

Most treaties follow the OECD model. They decide which country may tax business profits, dividends, interest, royalties, pensions and gains, cap withholding taxes, and require the country of residence to give relief by exemption or credit.

When both countries treat a person as resident, the treaty's tie-breaker applies in order: a permanent home, the centre of vital interests (where personal and economic ties are closest), the habitual abode and finally nationality. Treaty benefits usually require a tax residency certificate, and anti-abuse rules deny them to arrangements without substance.

A decision is due within 30 days, the card can be collected at a pickup point two to five weeks later, and the digital ID is valid for five years.

e-Residency does not give visa-free travel or change where you pay personal tax. The company it lets you run is an Estonian OÜ, which needs an Estonian legal address or a licensed contact person, and its tax position depends on where it is actually managed.

Several low-tax jurisdictions have formal economic substance rules for companies doing certain activities, such as holding, financing or intellectual property, and treaties and anti-avoidance rules elsewhere look at the same question: is the company really run from where it says it is?

Substance also matters for banking. A company with local directors who make the decisions, proper bookkeeping and a business that matches its location is easier to bank than a registration with nothing behind it. When you choose a jurisdiction, plan the substance you can actually provide.

EMIs hold client funds in safeguarded accounts rather than as deposits, so they are not covered by bank deposit insurance, and they do not offer loans. In exchange they are often quicker to onboard international companies, support many currencies and connect to modern payment rails.

For many founders an EMI is the first operating account, with a traditional bank added later for larger balances or credit. Our network includes EMIs alongside banks; which one suits depends on your industry, currencies and the countries you trade with.

The IRS issues an EIN free of charge (USD 0). Online applications require a US Social Security Number or ITIN; owners without one apply by phone, fax or mail, which takes longer.

Despite the name, a company needs an EIN even if it has no employees, and every foreign-owned single-member LLC needs one to file Form 5472.

EDD usually means senior management approval, a documented source of wealth and source of funds, closer monitoring of transactions and more frequent reviews. Anti-money-laundering laws require it in defined cases, and firms add their own risk triggers, such as certain industries or nominee arrangements.

Being subject to EDD is not a refusal. It means more documents and a longer onboarding, so files that explain the structure, ownership and money flows from the start move faster.

An EOOD is registered in the Commercial Register of the Registry Agency. Since 1 January 2026 the minimum capital is €1 and new registrations are decided by the end of the next working day. The version with two or more members is called an OOD.

Bulgaria taxes company profits at 10% and dividends paid to individuals at 5%. Combined with personal residence in Bulgaria, where personal income tax is a flat 10%, it is a common model for online service, consulting and export businesses, provided the company is really run from Bulgaria.

The Council of the EU keeps Annex I, the list itself, and Annex II, a watch list of jurisdictions with open commitments. As of the update of 9 October 2026, the British Virgin Islands is on Annex II, not Annex I, and the Cayman Islands is not listed, having been removed on 6 October 2020.

Listing has practical consequences: member states apply measures such as higher withholding taxes or denied deductions, Cyprus charges 17% withholding on dividends to companies in EU-listed jurisdictions, and banks review listed jurisdictions more closely.

An exempted company can obtain an undertaking that no Cayman tax will apply to it for up to 30 years from approval. It is the standard vehicle for investment funds and often sits next to a BVI company in fund structures.

Beneficial owners holding 25% or more are recorded under the Beneficial Ownership Transparency Act, in force since 31 July 2024, entities with a relevant activity file an economic substance return within 12 months of the year end, and the Cayman Islands has not been on the EU list of non-cooperative jurisdictions since 6 October 2020.

An exit tax treats the assets as sold on the day of departure, so the gain built up during residence is taxed even though nothing was sold. Under the Anti-Tax Avoidance Directive, EU member states must apply exit taxation to companies that move their tax residence or transfer assets out of the country, usually with the option to pay in instalments.

For individuals the rules depend on the country being left: some tax substantial shareholdings, others have no exit tax at all. Those rules apply at the moment of departure, so they are part of planning any move or redomiciliation.

FATCA dates from 2010 and works largely through intergovernmental agreements: banks report US persons' accounts either directly to the IRS or through their own tax authority. Institutions that do not comply face a 30% withholding on certain US-source payments, which is why banks everywhere ask whether you are a US person.

US persons include citizens and green card holders living abroad, and companies with US owners can be reportable too. FATCA is the US counterpart of the Common Reporting Standard, in which the United States does not take part.

Bulgaria taxes personal income at a flat 10% (15% for sole traders) and Georgia at a flat 20%, with Georgian residents' foreign-source income exempt. A flat rate makes the tax easy to predict but says nothing about what is taxable, so the tax base and residence rules matter as much as the rate.

Lump-sum regimes work differently: Italy's new-resident regime charges EUR 300,000 a year on foreign income, plus EUR 50,000 per family member, and Greece's Article 5A regime EUR 100,000 a year for up to 15 years, subject to an investment of EUR 500,000 in Greece.

Reportable transactions include capital contributions, loans, payments and distributions between the LLC and its foreign owner. The return is due even when no tax is owed, and foreign-owned disregarded entities cannot file it electronically: it goes by fax or mail.

The penalty for not filing is USD 25,000 per failure, which makes it the most expensive filing a small LLC can miss.

A Qualifying Free Zone Person pays 0% on qualifying income and 9% on other taxable income, with no zero band for the non-qualifying part; an ordinary taxable person pays 0% on the first AED 375,000 and 9% above. Meeting the qualifying conditions, including adequate substance in the zone, is what makes the 0% rate apply.

Free zone companies are licensed by a specific zone; mainland companies are needed to trade directly with UAE customers, run physical retail or sign many local contracts. Either type can sponsor residence visas for its owners.

Golden visa programmes set an investment route and amount, and grant a renewable residence permit to the investor and often the family. The UAE, for example, grants a 10-year golden visa to qualifying property investors. Several European programmes have narrowed or closed their property routes in recent years, so the options change often.

A golden visa gives the right to live in a country; it does not by itself make you tax resident there, and it does not give a passport. Some programmes can lead to citizenship after years of residence, under the normal naturalisation rules.

Holding companies separate operating risk from accumulated profits, make it easier to sell or bring in investors at group level and can receive dividends tax-efficiently where the law exempts them. A Cyprus company, for example, generally receives dividends exempt from corporate tax, and BVI business companies are widely used as neutral holding vehicles.

Where the holding company is managed, and whether it has substance there, decides where it is tax resident and whether treaty benefits apply. Several jurisdictions, the BVI among them, list holding as a relevant activity under their economic substance rules.

An IBAN starts with a two-letter country code and two check digits, followed by the national account number. It is mandatory for euro payments in the SEPA area and used in many other countries; the United States, for example, does not use IBANs.

The SWIFT or BIC code identifies the bank itself in international transfers, while the IBAN identifies the account. An IBAN issued by an electronic money institution works for payments like a bank's, but the money is safeguarded rather than covered by deposit insurance.

IFICI, the incentive for scientific research and innovation, replaced the non-habitual resident (NHR) regime, which closed to new entrants in 2024. It also exempts most foreign income except pensions.

It is limited to people who were not tax resident in Portugal in the previous five years and work in eligible roles or companies, such as research, start-ups and certain export or investment companies. Most retirees and remote employees fall outside it.

KYC typically means a passport, proof of address, the purpose of the account, expected volumes and countries, and the source of funds. Know your business (KYB) adds the company's documents, ownership chart, activity, licences and the people who control it, down to every beneficial owner.

KYC is not a one-off: banks refresh it periodically and when activity changes, and an unexplained change in volumes or counterparties can trigger new questions or an account review.

By default a single-member LLC is a disregarded entity and an LLC with two or more members is taxed as a partnership; either can elect to be taxed as a corporation. Non-US founders often form LLCs in states with light upkeep, such as Wyoming, whose annual report licence tax starts at USD 60 a year.

The name is used elsewhere for different things: a Georgian LLC, for instance, is an ordinary company taxed at 15% on distributed profits. In the US sense, the LLC's flexibility comes with annual information filings, such as Form 5472 for foreign-owned single-member LLCs.

Electronic money institutions offer most multi-currency accounts, and traditional banks offer them to larger clients. Local details, such as a UK sort code, a eurozone IBAN or a US routing number, let customers pay as if domestically, which lowers costs and speeds up collections.

Providers still apply full KYC, and some currencies or countries may be restricted for certain industries. The account's legal home decides which deposit protection, if any, applies.

Nominees are used for privacy on public registers, to meet local director requirements or for administrative convenience. They do not change who the beneficial owner is: registers of beneficial owners and every bank's KYC record the real owner behind them.

A nominee director who only signs what the owner decides can also move the company's place of effective management to the owner's country, with tax consequences. Banks treat undisclosed nominee arrangements as a red flag.

Domicile is a legal idea separate from residence: broadly, the country you regard as your permanent home. A person can be tax resident in a country without being domiciled there, and a few countries tax such non-domiciled residents more lightly.

Cyprus is the best-known example today: tax residents who are not domiciled in Cyprus are exempt from its special defence contribution on dividends and interest, until they become deemed domiciled after long residence. The United Kingdom replaced its non-dom rules with a residence-based regime in April 2025. Each regime has its own conditions, so the label alone says little.

It requires 400% of the IPREM index per month for the main applicant, plus 100% per family member, and health cover from an insurer authorised in Spain; with the 2026 IPREM of EUR 600 a month, that is EUR 2,400 a month. The first permit lasts one year, renewals run for two years, and each renewal requires more than 183 days a year in Spain.

Portugal's D7 visa is the closest equivalent, with a 2026 threshold of EUR 920 a month for the main applicant. Living in either country on such a permit generally makes you tax resident there, taxed on worldwide income.

The term is informal. Legally the vehicles are, for example, a BVI business company or a Cayman exempted company, neither of which pays corporate income tax locally. They are widely used for holding, investment and fund structures.

Offshore no longer means secret or untaxed: beneficial owners are filed with the authorities, account data is exchanged under CRS and FATCA, economic substance rules apply to relevant activities, and the owners' countries tax the profits under CFC or management rules. Banks accept such companies when the structure has a clear purpose.

Hong Kong taxes only profits arising in or derived from Hong Kong. An offshore claim needs evidence of where the profit-producing activities took place, such as where contracts were negotiated and services performed, and the Inland Revenue Department reviews it.

Many owners simply pay the two-tier profits tax, 8.25% on the first HK$2,000,000 and 16.5% above, because the rate is moderate and the position is easier to explain to banks. Income accepted as offshore may still be taxable in the country where the work is actually done.

The minimum share capital is one cent (€0.01), paid in before registration, and the Business Register reviews expedited applications by the next working day. Distributed profits are taxed at 22/78 of the net amount, equal to 22% of the gross distribution; the rise to 24% planned for 2026 was cancelled.

Every OÜ needs an Estonian legal address or a licensed contact person, files an annual report within six months of its year end and, when it pays salaries or dividends, a TSD return by the 10th of the following month.

Tax treaties define the concept: typically an office, branch, workshop or a person who habitually concludes contracts for the company. Once a permanent establishment exists, the country where it is located can tax the profits attributable to it, even though the company is resident elsewhere.

For founders the common risk is running a foreign company from home. An Estonian company managed from another country, for example, will probably have a permanent establishment there, and US tax becomes relevant when business is carried on in the United States through people, dependent agents or premises.

Routes vary: Mexico grants it after four years of temporary residence, Portugal after five years with basic Portuguese (A2), and Spain's long-term residence follows five years of continuous legal residence. Panama's Friendly Nations route has a two-year provisional phase before permanent residence, and Malta's Permanent Residence Programme grants it directly against an investment.

Permanent residence can still be lost through long absences, and it does not give a passport. Naturalisation follows separate rules and often takes longer.

A company incorporated in one country can become tax resident in another if its board meets and decides there. That is why a company formed in a low-tax jurisdiction but run day to day from the owner's home country is often taxed in the home country, regardless of where it is registered.

Other countries look first at incorporation: a UK company is UK resident under section 14 of the Corporation Tax Act 2009, and since 2026 a company incorporated in Cyprus is resident there by default unless a tax treaty provides otherwise. Where two countries both claim a company, the treaty's tie-breaker decides.

Heads of state, ministers, senior judges, members of parliament, senior officers of state-owned companies and ambassadors are typical PEPs, in their own country or abroad. Banks screen every client and beneficial owner against PEP databases at onboarding and periodically afterwards.

PEP status does not bar anyone from banking or investment programmes, but it means enhanced due diligence, senior approval and a closer look at the source of wealth. Declaring it upfront avoids it surfacing later as an unexplained match.

Redomiciliation, also called re-domiciliation or continuation, transfers a company's registration to a new jurisdiction without dissolving it. The alternative, closing the old company and forming a new one, means new contracts, new bank accounts and often a tax event, which is why founders who outgrow a jurisdiction ask about redomiciliation first.

It only works where the law of the old jurisdiction allows companies to leave and the law of the new one allows them to arrive. Hong Kong, for example, opened an inward regime in 2025. Banks still treat the move as a change to review: expect updated documents and questions about why the company moved.

In the British Virgin Islands every company must have a licensed registered agent, which keeps its records, files its register of members and beneficial ownership information with the Registrar and receives its annual financial return within nine months of the year end. Cayman exempted companies likewise use a licensed provider for their registered office.

In the United States each state requires an LLC to name a registered agent with an address in that state to accept legal documents. If the agent resigns or is not paid, the company can fall out of good standing, which banks notice.

Programmes differ in what they grant. Malta's Permanent Residence Programme gives permanent residence against a EUR 37,000 contribution and a qualifying home; Greece's golden visa is a 5-year renewable permit from EUR 400,000 in real estate outside the main areas; Panama's Qualified Investor route starts at USD 300,000 in new property.

Applicants can usually include family as dependants, typically a spouse and children and sometimes parents, and every applicant goes through due diligence. Residency by investment gives the right to live in a country; tax residency and citizenship follow their own rules.

Banks, citizenship programmes and property transactions ask for evidence of the source of funds: bank statements, contracts, dividend resolutions, sale agreements or tax returns that link the money to its origin. Grenada, for example, has required a source-of-funds attestation for citizenship applications since 10 November 2025.

Source of funds is narrower than source of wealth: it concerns this money, while source of wealth explains how the person built their overall net worth. Both have to be consistent with each other and with the client's profile.

Private banks, citizenship and residency programmes and enhanced due diligence reviews ask for an account of how the wealth arose, supported by documents such as audited accounts, company sale contracts, dividend records or tax returns. Saint Lucia's programme, for example, requires declared financial resources of at least USD 350,000, by sworn affidavit.

Gaps are the usual problem: wealth built through a lightly documented company or a cash business is hard to evidence years later. Clean accounts and dividend records make the question easier to answer when it comes.

For individuals, many countries use a day count, often 183 days in a year, alongside tests such as a permanent home, family ties or where your economic interests lie. Some countries offer shorter routes, such as the Cyprus 60-day rule, provided every condition is met. Tax residency is separate from a residence permit or a passport.

For companies, tax residency usually follows the place of incorporation or the place where the company is effectively managed. When two countries both claim a person or company, a tax treaty decides which one prevails. Banks ask for your tax residency under the Common Reporting Standard, so it has to be accurate.

Periods differ: Paraguay grants temporary residence for up to two years, extendable once for the same period; Mexico's lasts up to four years; Portugal's first permit runs for two years, followed by renewals of three. Most permits limit time spent abroad and must be renewed before they expire.

Time on a temporary permit usually counts towards permanent residence and, later, naturalisation. A residence permit and tax residency are separate: tax residency depends on each country's own tests.

Most countries tax their residents on worldwide income. Territorial systems tax only what is earned locally: Hong Kong taxes profits arising in or derived from Hong Kong, and Paraguay taxes individuals on Paraguayan-source income only. Georgia exempts its residents' foreign-source income.

Territorial does not mean tax-free. The source of income is decided by where the work is done and the business is run, not by where the bank account is, and your previous country of residence may still tax you until you have left it properly. Take advice on both sides before relying on it.

Thresholds and access differ. The British Virgin Islands has required filings for owners of 10% or more since 2 January 2025, kept out of public view, with legitimate-interest access to owners of 25% or more since 1 April 2026. The Cayman Islands uses a 25% threshold under its Beneficial Ownership Transparency Act, in force since 31 July 2024, and in the UK people with significant control are recorded at Companies House.

US-formed companies no longer file federal beneficial ownership reports under a FinCEN final rule effective 14 August 2026. A register entry never replaces a bank's own checks: banks still identify every beneficial owner themselves, and a mismatch between the register and the bank's file raises questions.

Rates on dividends vary widely. Georgia withholds 5%, Cyprus generally 0% on dividends to non-residents (with exceptions for EU-listed and low-tax jurisdictions), and the UK nothing on ordinary dividends. Once an Estonian company has paid its 22/78 corporate tax, Estonia withholds nothing further on dividends to non-resident individuals.

A tax treaty can reduce the rate, usually on presentation of a tax residency certificate. Withholding tax is often creditable in the recipient's country of residence, but only up to the tax due there, so it matters for the overall cost of a structure.

Most countries, including Portugal, Spain, Cyprus and Mexico, tax their residents on worldwide income. Relief for double taxation comes through tax treaties or unilateral credits, and some countries soften the rule for newcomers with special regimes, such as non-dom status in Cyprus or the Beckham regime in Spain.

The United States also taxes its citizens on worldwide income wherever they live, which is unusual. The opposite model is territorial taxation, which taxes only local-source income.