Place of effective management and substance before the foreign structure is challenged.

Client benefit

Concrete client benefits.

• The client sees whether the foreign entity is actually managed abroad.
• Board and decision routines are established before transactions start.
• Tax risk from German or other management locations is documented.
• The substance file supports banking and Corporate Tax positions.
• Operational roles, signatures and bank access become consistent.

Tax classification.

Place of effective management can shift tax residence or create additional taxation. It also interacts with permanent establishment rules, CFC, treaty residence and Free Zone substance requirements.

• Actual decision-making by managing directors or board.
• Frequency, location and documentation of meetings.
• Contract negotiation, banking access and strategic control.
• Permanent establishment and dependent-agent risk.
• CFC, Corporate Tax and Free Zone substance requirements.

Ongoing substance administration.

Substance must be maintained through regular meetings, minutes, local resources, contract files, staff records and tax/accounts evidence.

• Meeting calendar and minute book.
• Decision log for contracts, investments and distributions.
• Local office, staff or service-provider documentation.
• Bank access, signature and approval trail.

Set-up and implementation process.

• Map actual decision-makers and workflows.
• Identify management-risk facts and gaps.
• Define board routine, approval matrix and local substance.
• Prepare substance evidence and document templates.
• Review annually and when business model changes.

Typical mistakes.

• Board minutes are signed abroad while decisions are made in Germany.
• A local address is used without real operational activity.
• Bank access and contracts show a different management location.
• Service providers act without documented authority.
• Substance is built only after a tax authority asks questions.

What Kanzlei Meyers & Partner AG delivers.

• Place-of-management risk memo.
• Substance gap analysis.
• Board routine and approval matrix.
• Minute and decision-log templates.
• Permanent establishment and CFC interface note.
• Annual substance review.

Documents for the first review.

• Corporate chart and director list.
• Contracts, invoices and bank mandates.
• Meeting history and decision records.
• Office, staff and service-provider agreements.
• Owner and manager residence details.
• Tax filings and accounting records.

Result of the initial consultation.

The first review ends with a documented decision file: target structure, tax assumptions, exclusion points, implementation sequence, document list and clear next steps.

• Decision matrix with recommended structure and rejected alternatives.
• Tax and compliance workstream with open points, deadlines and responsible parties.
• Implementation plan for entity formation, banking, governance and ongoing administration.

Legal position and limits.

The tax residence and management location of a company depend on facts. A registered seat or nominee function does not by itself create substance.

Frequently asked questions.

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