Company registration when working in many EU countries?

Question

Normally, if you work in single EU country as contractor, you are treated like its tax resident and you are required to register company there. (This at least apply to Germany in Poland, where you are tax resident, if you spend over a half of year each year on their territory).

But say, I'd work as contractor 4 months in Germany, 4 months in Poland and 4 months in Czech Republic. In none of that countries I'd spend more than the half of that year, so in neither of them I'm tax resident.

• Does it mean, that I'm then free to choose in which EU country I'd register my company?

• For example, can I register in country, where the tax regulations are the most attractive for me, say, in Luxembourg?

Answer 1

If you believe the Single European Market propaganda, you would be right to believe that a company incorporated in any EU state can undertake work in any other EU state - in which case LUX (or EI, NL) may be the answer to your question.

However, the SEM is rarely straightforward in practice, and I know from first hand experience that using your own contractor company in Germany (even if incorporated in DE, never mind LUX) is quite tricky as you have to comply with the various labour laws. This can make it non-viable, and most contractors end up working via management companies.

In terms of tax, there is a major difference between tax residence and tax domicile - so even if you register your company (domicile) in (eg) LUX it may be resident in multiple countries simultaneously.

You need to take proper legal advice...