A company can remain incorporated in one country while the people who actually run it move somewhere else.
War makes that possibility unusually visible.
A director leaves for safety. A founder starts making strategic decisions from another jurisdiction. Employees begin working remotely from homes abroad. Contracts are negotiated and signed from places that were never part of the original operating model.
The registered office may not change.
The tax facts can.
Key takeaways
- Incorporation, corporate residence, effective management and permanent establishment are different questions. Moving a director or employee does not automatically answer any of them.
- What matters is what actually moved. Strategic decision-making, authority to bind the company, employees, workplaces and business functions can each create different tax consequences.
- Emergency relocation should be documented as carefully as deliberate relocation. Temporary facts, real board practice and the duration of the move can become central evidence later.
Why exile creates a company-level question
A company is a legal person, but it acts through human beings.
Directors decide strategy. Founders approve commitments. Employees perform functions. Authorised people sign contracts. Offices and homes can become places from which business is carried on.
When those people move, the company’s factual footprint can change even if no corporate filing records a migration.
That creates at least three separate questions:
- Is the company still resident only where it was previously resident?
- Has the place of central or effective management changed?
- Has activity in the new country created a permanent establishment or another local tax obligation?
Those questions must not be merged.
United Kingdom: central management and control
UK guidance provides a clear example of a management-based residence concept.
HMRC states that a company incorporated outside the UK can nevertheless be UK resident if its central management and control is exercised in the United Kingdom.
The test is factual.
It looks for the place where the highest level of control of the business actually abides. Formal board minutes can be evidence, but they are not decisive if the real strategic decisions are made elsewhere.
Imagine a foreign company whose founder-director relocates to London because of a conflict.
If that founder continues to determine business strategy, approve major contracts, control financing and make the company’s highest-level decisions from the UK, the relocation can create a UK residence question even though the company remains incorporated abroad.
The answer would depend on the facts, domestic law and any applicable treaty.
The point is the mechanism, not the automatic outcome.
United Arab Emirates: effective management and control
The UAE uses different statutory language but asks a related factual question.
The Federal Tax Authority states that a juridical person incorporated outside the UAE can be treated as a UAE resident where it is effectively managed and controlled in the UAE.
One of the central factors is where key management and commercial decisions that are necessary for the conduct of the business are regularly and predominantly made.
A foreign founder who relocates to Dubai or Abu Dhabi and continues running the enterprise from there can therefore create a UAE residence question.
Again, the result is not determined by the visa, the laptop or the registered office.
It depends on the substance of management.
The FTA also recognises that a company can be resident in more than one jurisdiction under domestic rules and that an applicable double-tax treaty may then have to resolve the overlap.
Permanent establishment is a different layer
Corporate residence asks where the company itself is resident.
Permanent establishment asks whether a non-resident enterprise has enough business presence in another jurisdiction for that jurisdiction to tax attributable business profits.
The OECD’s 2025 update to the Model Tax Convention added guidance on cross-border remote work, particularly the circumstances in which a home office may constitute a place of business.
This is especially relevant after involuntary relocation.
An employee working abroad for a few weeks during an emergency is not the same fact pattern as a senior employee who works indefinitely from a home that the enterprise expects or requires them to use.
The duration, commercial reason, degree of permanence and business use of the location all matter.
Treaty wording and domestic law remain decisive.
The mechanism: the company travels through its people
The transmission mechanism can be described as:
war or emergency → key people relocate → management and business functions move in practice → new domestic tax nexus becomes possible → treaty analysis may be required.
Different people create different risks.
A junior employee working remotely may create payroll or employment issues without moving central management.
A chief executive may not create a fixed-place PE but may materially affect company-residence analysis.
A sales executive who habitually concludes contracts can raise an agency-PE question.
A founder who does all three can concentrate several risks in one person.
The strongest countercase
Not every emergency relocation changes the tax position.
A move may be short. Strategic decisions may continue to be made by a functioning board elsewhere. The new home may be used only because of extraordinary circumstances and not be at the disposal of the enterprise. A treaty may preserve residence in the original state.
Authorities also have to distinguish emergency facts from a genuine long-term relocation of management.
This is why the date on which someone crossed a border rarely answers the whole question.
The quality and duration of the facts matter more.
Scenarios, not forecasts
Under temporary exile, key people move for safety but governance and core business functions remain anchored in the original jurisdiction.
Under management migration, the emergency location gradually becomes the real place from which strategic decisions are made.
Under distributed management, directors and functions remain spread across several jurisdictions, making the factual and treaty analysis more complex rather than moving cleanly to one country.
Observable triggers include board attendance, decision logs, signing authority, location of senior executives, duration of remote work, availability of premises and changes in payroll or registrations.
Practical consequences
A company affected by forced relocation should document the change while it is happening.
Record where directors are physically located when major decisions are made. Keep contemporaneous board minutes that reflect reality. Review signing authority. Identify employees working from foreign homes. Track the duration and business purpose of those arrangements.
Do not assume that incorporation solves residence.
Do not assume that a residence conclusion solves permanent establishment.
And do not treat a temporary emergency as permanently irrelevant simply because nobody intended to move the company.
International tax follows facts that can change faster than corporate paperwork.
Sources
- HMRC, Company residence — central management and control: https://www.gov.uk/hmrc-internal-manuals/international-manual/intm120060
- HMRC, Company residence overview: https://www.gov.uk/hmrc-internal-manuals/international-manual/intm120030
- UAE Federal Tax Authority, Resident Juridical Person: https://www.tax.gov.ae/en/taxes/corporate.tax/corporate.tax.topics/resident.juridical.person.aspx
- UAE Federal Tax Authority, Effectively managed and controlled in UAE: https://tax.gov.ae/en/taxes/corporate.tax/corporate.tax.topics/effectively.managed.and.controlled.in.uae.aspx
- OECD, 2025 Update to the Model Tax Convention — cross-border remote work, 19 November 2025: https://www.oecd.org/en/about/news/press-releases/2025/11/oecd-updates-model-tax-convention-to-reflect-rise-of-cross-border-remote-work-and-clarify-taxation-of-natural-resources.html
Disclaimer
This Insight provides general international-tax analysis. It is not tax or legal advice. Corporate residence and permanent-establishment conclusions depend on domestic legislation, applicable treaty wording, actual governance, the functions performed in each country and the specific facts of the relocation.
