01 · Personal tax residence
Where is the owner personally resident under the domestic rules of the relevant countries? If more than one state claims residence, does an applicable treaty change the position for treaty purposes?
Professional perimeter. LEXONYX performs cross-border factual and structural analysis, mapping, project coordination and integration of specialist conclusions. Jurisdiction-specific legal and tax conclusions are provided by appropriately qualified professionals in the relevant jurisdictions where required.
CROSS-BORDER TAX ARCHITECTURE
Tax Residency and CFC in Cross-Border Structures
Personal tax residence, company tax residence and CFC exposure are separate legal questions. We map the facts behind all three, identify where they interact and coordinate the jurisdiction-specific conclusions needed for the structure.
A founder moves, directors begin working from another country, a foreign holding company accumulates profits, ownership changes or distributions are planned. The corporate chart may look unchanged while several tax analyses now need to be reopened.
THREE SEPARATE GATES
Do not collapse residence and CFC into one test
The same facts can matter across several workstreams, but each legal question has its own connecting factors, statutory conditions and evidence.
02 · Company tax residence
Where is the entity resident under the domestic rules applicable to its legal form — incorporation, statutory seat, management or other connecting factors? If two states claim residence, the applicable treaty may require a separate analysis.
03 · CFC exposure
If the company remains foreign, does the owner’s country nevertheless attribute some of its income under domestic CFC rules? Control, entity classification, income type, taxation and available exceptions must be tested separately.
WHEN A REVIEW IS NEEDED
Typical triggers in an international structure
Founder or shareholder relocation
The owner enters a new tax system while foreign entities, retained profits and existing governance remain in place.
Management moves across borders
Directors, founders or key decision-makers begin carrying out recurring management functions from another country.
New holding or ownership layer
A foreign company is inserted above operating businesses, investments or IP and the owner-country consequences were not mapped first.
Ownership or control changes
Shares, voting rights, economic entitlements, family ownership or indirect interests change the control analysis.
Profits and distributions change
Retained earnings, dividends, interest, remuneration or other owner-level flows alter the tax and evidence picture.
Bank, investor or tax review
An external reviewer asks whether the declared residence, management, ownership and flow narrative matches the operating reality.
CURRENT-STATE FACT MAP
What we establish before drawing conclusions
A residence or CFC conclusion is only as reliable as the factual model underneath it.
Owner: where the founder or shareholder lives, works and is taxed; relevant moves and dates.
Entities: legal forms, jurisdictions of incorporation, statutory seats and tax registrations.
Management: who makes recurring decisions, where authority is exercised and how the board actually works.
Ownership & control: direct and indirect interests, voting rights, economic entitlements and relevant related-person facts.
Income & tax: income categories, actual foreign tax, retained profits and prior CFC positions.
Flows: dividends, remuneration, interest, loans, related-party payments and expected distributions.
Evidence: minutes, authorities, contracts, banking access, accounting records and the chronology of decisions.
Connected jurisdictions: owner country, company jurisdictions, team locations, PE exposure and treaty interfaces.
GERMANY INTERFACE
When Germany becomes one of the connected jurisdictions
For an individual, German unlimited income-tax liability can arise where the person has a Wohnsitz or gewöhnlichen Aufenthalt in Germany under § 1 EStG and §§ 8–9 AO. That personal nexus does not by itself answer the residence of a foreign company or whether German CFC rules apply.
On the company side, management facts can require a separate German corporate-residence analysis; § 10 AO defines Geschäftsleitung as the centre of business management. If the entity remains foreign for the relevant analysis, German CFC rules under §§ 7 ff. AStG can become a separate owner-level workstream, subject to their own statutory conditions.
The sequence matters: individual nexus → entity classification and company-residence facts → foreign-company status → ownership/control → income and CFC tests.
STRUCTURAL INTERFACES
Residence and CFC rarely sit alone
The workstream must be connected to the rest of the structure without treating adjacent issues as the same legal test.
Management
Company-residence questions can become more important than CFC if ongoing management has moved with the founder.
Permanent establishment
A company may remain resident abroad while functions performed in another country create a separate PE analysis.
Distributions
Dividends and other owner payments require their own source, residence, treaty and domestic-tax analysis.
Substance & governance
Evidence should reflect the functions and decision-making model that actually exists; documents are not a substitute for operating reality.
Banking, KYC & CRS
CRS tax-residence classifications, KYC/UBO records, source-of-wealth evidence and the banking transaction narrative should not contradict the factual tax and ownership structure.
Restructuring
Changing ownership or management to solve one tax issue can create another. Sequence and local validation matter.
TECHNICAL ROUTES
Use the landing page to identify the issue — then go deeper
WHAT THE CLIENT RECEIVES
A structured question map before local conclusions
Residence map
Personal and entity residence questions separated by jurisdiction, legal form and relevant dates.
Ownership & control map
Direct and indirect interests, rights and related-person facts relevant to owner-country CFC analysis.
Income & distribution map
Income categories, retained profits, foreign tax and expected owner-level flows placed into the correct workstreams.
Evidence map
What supports the stated management, residence, control and economic model — and where the record is incomplete.
Specialist question list
Precisely framed questions for the qualified tax or legal specialists who must confirm jurisdiction-specific conclusions.
Implementation sequence
What should be confirmed, documented, changed or monitored first, without solving one interface in isolation.
FAQ
Tax residency and CFC — key distinctions
Are personal tax residence, company tax residence and CFC the same issue?
No. They are separate legal questions. Personal residence concerns the individual; company residence concerns the entity under the applicable domestic law and, where relevant, treaty framework; CFC rules are owner-country rules that may apply to interests in foreign entities when their statutory conditions are met.
What does “CFC tax” mean?
There is no single global CFC tax. Domestic CFC regimes can bring specified income of a controlled foreign entity into a resident owner's tax base or otherwise impose owner-level consequences when statutory conditions are met. Control, income categories, low-tax tests, exemptions, attribution and filing differ by jurisdiction.
Does a founder moving country automatically change the tax residence of a foreign company?
No. A founder's move is a trigger for a fresh factual and legal review, not an automatic residence transfer. The relevant company-residence test depends on the applicable domestic law, the entity's legal classification, where management functions are actually exercised and any applicable treaty rules.
Can CFC rules apply even if the foreign company remains resident abroad?
Potentially yes. Company residence and CFC are separate analyses. A company can remain foreign for the relevant residence analysis while the owner's country still requires a CFC test under its own domestic rules.
Is an ownership percentage enough to determine CFC exposure?
No. Ownership percentage is only one input. Depending on the applicable CFC regime, the analysis may also involve direct and indirect interests, voting or economic rights, related persons, coordinated conduct, entity classification, income type, taxation and statutory exceptions. The relevant owner-country rules must therefore be tested before a CFC conclusion is reached.
What does LEXONYX deliver in a residency and CFC review?
LEXONYX maps the owner, entities, residence facts, management, control, income, distributions and connected jurisdictions; identifies which legal and tax questions must be answered in each jurisdiction; coordinates appropriately qualified specialists where required; and integrates the conclusions into a structural and implementation roadmap.
STRUCTURE REVIEW
Need to understand where residence and CFC questions sit in your structure?
Send the ownership chart, jurisdictions, recent or planned moves, where decisions are made, what foreign entities earn and which distributions are expected. We will map the workstreams and identify the jurisdiction-specific conclusions that need to be confirmed.
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