// Already Structured Offshore?
You relocated. You set up an offshore company. You thought you were done. But your home country's CFC rules, exit taxes, and extended liability provisions don't care where you live — they care where you came from. Germany's AStG reaches 10 years after departure. The US taxes citizens worldwide, forever. The UK's SRT catches more people than they expect. Your offshore structure may be creating a tax liability back home that you don't even know about.
Book Your Consultation// The Problem
Germany's Außensteuergesetz is one of the strictest CFC regimes in the world. §2: extended limited tax liability for 10 years after departure if you move to a low-tax country. §6: exit tax (Wegzugsbesteuerung) on unrealized share gains above 1%. §7-14: CFC attribution of passive income from controlled foreign companies taxed below 25%. Moving to Dubai, Singapore, or Cyprus doesn't automatically free you. Germany follows you.
The Statutory Residence Test uses a day-count system with tie-breakers — but the "sufficient ties" test means 90 days in the UK can make you resident if you keep a home, spouse, or children there. UK CFC rules attribute profits of controlled foreign companies earning UK-connected income. Non-dom status is being reformed. The remittance basis is expensive (£30K/£60K charge). Many "non-residents" are actually still UK tax resident.
US citizens and green card holders are taxed on worldwide income regardless of where they live. FATCA forces every bank on earth to report US person accounts. Subpart F and GILTI attribute offshore company income to US shareholders. PFIC rules penalize passive foreign investments. The only escape is renunciation — which triggers exit tax on covered expatriates (net worth >$2M). Even non-US persons with US-source income need careful structuring.
// The Solution
CFC rules have exceptions. Exit taxes have deferrals. Extended liability has limits. We find the gaps that apply to your situation.
Most CFC regimes exempt companies with genuine economic substance. Germany's AStG exempts EU/EEA companies with real economic activity. The UK exempts CFCs that pass the "managed and controlled" test in the foreign jurisdiction. If your offshore company has real employees, real office space, and real decision-making locally — CFC attribution is often avoided. We build substance into your structure from day one.
CFC rules primarily target passive income. Dividends, interest, royalties, rental income — that's what CFC rules catch. Active business income (trading, services, manufacturing) is often exempt or subject to higher thresholds. Restructuring your revenue streams to ensure active income classification can eliminate CFC exposure entirely. The line between active and passive is technical — and we know where it is.
Proper deregistration + genuine establishment elsewhere. Half the CFC problems we see stem from incomplete residency breaks. The German apartment you kept "just in case." The UK home your spouse still lives in. The US green card you never formally abandoned. A clean break requires: terminate domestic dwelling, establish genuine foreign residency, document the transition, notify all relevant authorities. We manage the entire process.
Double tax treaties can override domestic CFC rules — sometimes. Some treaties contain provisions that limit CFC taxation. The Germany-Singapore DTA, for example, has specific provisions for business profits. Treaty shopping rules (BEPS MLI) have closed some routes, but treaty-based structuring remains powerful when done correctly. We analyze the specific treaty network for your situation.
Pay less, defer, or eliminate. Germany's Wegzugsbesteuerung (§6 AStG) can be deferred for moves within the EU/EEA — interest-free, across 7 years. Restructuring share ownership before departure can reduce the taxable base. Some exits are better done in stages. The US exit tax has a $866K exemption (2024). We model the exact cost and often find ways to reduce it significantly.
Some destinations neutralize CFC risk entirely. Moving from Germany to Portugal (EU — no extended liability under §2 AStG). From the UK to a non-treaty country with genuine establishment. Your destination matters as much as your departure. We select jurisdictions that break the CFC chain for your specific home country.
Most entrepreneurs discover CFC exposure when a tax authority letter arrives — by then, penalties are already accruing. 30-minute consultation to map your specific exposure by home country, residency status, and corporate structure.
// Case Study
A German e-commerce founder moved to Dubai in 2023. Set up a Singapore Pte Ltd for his Amazon business. Revenue: $2.5M. Thought he was paying 0% tax. Reality: Germany's AStG §2 extended limited tax liability applied — he'd moved to a low-tax country (UAE) within 10 years and still had "substantial economic interests" via his German Amazon marketplace revenue. His Singapore company's profits were partially attributable to Germany under §7 AStG (CFC rules, below 25% threshold). Estimated German tax exposure: €180K+ in back taxes and interest. After restructuring: established genuine substance in Singapore (local employee, office, board meetings), restructured revenue streams to qualify for active income exemption, and filed a ruling request with German tax authority. Exposure eliminated prospectively, prior years settled at reduced amount.
"Moved to Dubai, thought I was done with German tax forever. Two years later, my Steuerberater called — the Finanzamt was asking questions about my Singapore company. AStG exposure was €180K. After restructuring with proper substance and active income classification, we settled the past and eliminated future exposure. Should have done this before I left Germany."
// Country-Specific
AStG §2: Extended limited tax liability for 10 years if you move to a low-tax jurisdiction.
§6: Exit tax on unrealized gains (shares >1%). Deferral for EU/EEA moves.
§7-14: CFC attribution if foreign company taxed below 25%.
Key: Substance in EU/EEA exempts from most provisions. Non-EU moves require careful planning years in advance.
SRT: Statutory Residence Test — day count + ties test. 90+ days with 3 ties = UK resident.
CFC: UK-connected income attribution. Profits artificially diverted from UK.
Non-dom: Remittance basis available but costly (£30K/£60K charge). Reform coming.
Key: Clean break requires no UK home, limited days, minimal ties.
Citizenship-based: Worldwide taxation regardless of residency. Only Eritrea does the same.
Subpart F + GILTI: Offshore company income attributed to US shareholders.
FATCA: Global bank reporting to IRS.
Exit tax: Mark-to-market on covered expatriates (>$2M net worth).
Key: Only renunciation ends US tax obligations — and it triggers exit tax.
CFC: Attribution of passive and tainted income from controlled foreign companies in listed countries.
Active income test: If >95% active, CFC rules don't apply. Threshold is strict.
CGT: Capital gains tax on worldwide assets for residents. Departure requires CGT event I1 (deemed disposal).
Key: Clean break requires genuine departure + no intention to return within 5 years.
Art. 209 B CGI: CFC rules for French companies controlling foreign entities taxed at <60% of French rate.
Exit tax: Tax on unrealized gains when leaving France (shares >€800K or >50% of a company).
Deferral: Available for EU/EEA moves, expires after 2 years for non-EU.
Key: France's exit tax has been reformed repeatedly. Current rules require specialist advice.
FAPI: Foreign Accrual Property Income — passive income from controlled foreign affiliates taxed currently in Canada.
Departure tax: Deemed disposition of all assets at fair market value on departure.
Returning resident: Re-entering Canada re-establishes worldwide taxation.
Key: Canada's departure tax is immediate (no deferral for non-treaty moves). Plan exit timing carefully.
// FAQ
Controlled Foreign Corporation (CFC) rules allow your home country to tax profits sitting in your offshore company — even if you never pay yourself a dividend. If you control the company and it earns passive income (or all income, depending on the country), your home country attributes those profits to you personally and taxes them at domestic rates. Germany, the UK, US, Australia, France, and most OECD countries have CFC regimes. Each works differently. We structure around the specific rules that apply to your nationality and residency.
Germany's Außensteuergesetz (AStG) has extended taxation rules that can apply for up to 10 years after you leave Germany — even if you're no longer tax resident. §2 AStG applies extended limited tax liability if you move to a low-tax country and maintain 'substantial economic interests' in Germany. §6 AStG triggers an exit tax on unrealized gains when you leave. And §7-14 AStG CFC rules apply if you control a foreign company earning passive income taxed below 25%. Moving to Dubai doesn't automatically free you from German tax. Book a consultation to check your specific exposure.
Dubai has 0% personal income tax. But that only matters for income sourced from or paid into the UAE. Your home country's CFC rules look at where you control the company from, not where the company is. If you're a German national who moved to Dubai 2 years ago and still controls a Singapore trading company, Germany's AStG may still attribute those profits to you under extended limited tax liability (§2 AStG). The UAE-Germany DTA doesn't override domestic CFC rules. You need a clean residency break AND proper corporate structure. We ensure both.
Exit tax (Wegzugsbesteuerung in Germany, §6 AStG) taxes unrealized capital gains on shares when you leave the country. Germany taxes the notional gain on shares worth >1% of a corporation as if you sold them on departure day. The US has its own version for covered expatriates (net worth >$2M). Some countries offer deferral within the EU/EEA. Exit tax must be factored into any relocation plan — sometimes it's worth paying, sometimes deferral or restructuring avoids it entirely. We model the numbers before you move.
Breaking tax residency requires more than booking a flight. You need to terminate your domestic dwelling (sell or sublet — not just leave it empty), establish genuine residency elsewhere (lease, utilities, local bank, visa), spend the required number of days in the new jurisdiction, and document everything. Many countries have tie-breaker rules in double tax treaties. Germany's 'habitual abode' test and the UK's Statutory Residence Test are notoriously tricky. We ensure your residency break is clean and defensible.
More than you think. US citizens owe FBAR and FATCA reporting worldwide for life. German expatriates may owe Feststellungserklärung for up to 10 years under extended limited tax liability. UK has reporting for non-dom status and remittance basis claims. CRS (Common Reporting Standard) means your bank in Singapore automatically reports to your home country's tax authority. Failure to report is often penalized more severely than the underlying tax. We map all surviving obligations.
// Related Solutions
CFC exposure compounds — interest and penalties accrue from the day the obligation arose, not the day you were caught. A proactive review costs a fraction of a retrospective settlement. Book a consultation — 30 minutes to map your exposure.