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I am a freelancer and I'm looking for the best country to incorporate in. Reading through the various DTAs, I see the term "permanent establishment" used everywhere.

Consulting with a lawyer, I was informed that if my personal residence is outside the country of incorporation, it counts as a PE of the company. Therefore, it is liable for taxation in the country of personal residence.

In my mind, this makes the whole point of looking for a better tax deal abroad moot. If my home country wants to tax me through the nose, why would I incorporate abroad and pay even more?

Have I got this straight or am I missing something?

PS: I am searching within the EU only.

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You are not missing something. To get to enjoy the Tax-loopholes you have to be a big Multinational (or be willing to move).

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