EU citizens have the right to free movement and residence within the union. Obviously, this right triggers responsibilities and compliance with local standards. As such, individuals who exceed holiday terms in a different member state must register with a local ministry of interior. Registration leads to the approval or decline of a residence permit. The freedom of movement does not only apply to individuals. Legal entities may also utilize the fundamental freedoms laid down in the TFEU.
Article 21 of the TFEU allows all citizens of the European Union to move and reside freely within the territory of the member states. It is specifically states in this article that there may be limitations and conditions laid down in the Treaties and by measures adopted to give these treaties effect. EU citizenship therewith introduces several all-embracing advantages for its residents.
Corporate residence differs from personal and individual residence. These days, the ‘virtual’ character of business allows customers to buy products all over the world. Citizens of the European Union benefit from the internal market that forbids barriers limiting free movement. The result is that purchases within the internal market are more favorable compared with providers outside the block. Corporate residence in one of the member states therewith is interesting from different perspectives. However, in general, a corporate residence in a member state does not influence personal residency.
Recent years showed disruption of traditional business, education and employment triggered a larger following of location independent workers. In particular this group of people need a thorough understanding of community law and the legal frameworks involved. For example, the principle of anti-discrimination is strengthened by a number of treaties that avoid double charges. For example, double taxation is only allowed under exceptional circumstances.
Those who seek the most appropriate location for international company formation or personal residence need to ascertain the local social security framework in case things go wrong. Social environments often tax residents to support its welfare system. In line with this safety net, low tax and zero tax jurisdictions provide limited protection to their citizens, tax residents and other non-resident but local investors. Low corporate costs allow business professionals to grow fast but leave residents in times of crises in despair.
Residence, domicile and passporting rights provide opportunities. These opportunities are not suitable in all circumstances and may even be inapplicable for some. As a consequence, residence is a complex assay that requires close examination and an exact match with individual needs. Failure to comply with the applicable rules may trigger severe consequences. Therefore, the choice for personal or corporate residency is not as easy and straightforward as one may think, and decisions should not be taken overnight.