Tax Residence of Company if Managing Director lives in France
Hello Valerie,
Posting this as a new thread but it’s related to my situation as managing director of a foreign company who will move to France for family reason.
1. If I will continue to be managing director of my HK company (100% shareholder and sole director) and live in France, would the company’s effective management deemed to be in France even if the company has been registered in HK and the AGM is held in Hong Kong? Will they consider the company to now be a French company? The company’s main clients are in HK, the staff works in HK, most of the work is done in HK except of the overall management which is done by me who lives in France. I read some material about the tax situation during COVID crisis where they discuss the possibility that the French government can reconsider the company’s tax residence if directors live in France habitually and in regular basis. For COVID it’s not a problem because it’s force majeure and temporary but if I continue to be the managing director while working at home in France, does it become a problem and will my company’s tax residence be reassessed?
2. If the above situation poses to be problem, what options can I take to continue being a managing director but not move the business from HK? The business has already been established for 7 years and it doesn’t make sense to move it. From your previous answers, to hire myself by the foreign company and pay social charges will be the simplest option but it doesn’t seem the best option financial wise and limits expansion. This option might also not possible if No. 1 above is true, the company’s tax residence will then be in France.
3. I am now exploring your other suggestion of setting up a SASU as subsidiary of my HK company. How exactly will this work? Can I manage the company in HK as managing director of the subsidiary in France? in this situation, the company’s tax residence can remain in HK and I have a French company that provides management to HK company? I am trying to visualize how this setup could work.
4. Is the government expecting me to move my business to France if I continue to manage it from France? It takes a lot of work to move a business and it doesn’t make sense. Is there a specific clear ruling about this situation?