Real Estate Investing: Registration Required for Out-Of-State or Overseas Corporation?
Corporations can generally be established in any state or, in fact, any country around the world and operate in any of the 50 U. S. states or any foreign country. In any U. S. state, all corporations other than the ones incorporated inside a state are, from that state’s point of view, considered ‘foreign’ corporations (whether they are from a neighboring state or established across the Rockies or registered in another country).
Similar classifications apply in most other countries around the world albeit often with less room for manoeuver.
The question of domicile or whether there is a requirement for an additional registration in a second (or further) jurisdiction determines numerous matters from taxation to local business licenses and similar.
Thus, it is important to know which activities constitute ‘having a place of business or trade’ or — in Europe — whether a local ‘Betriebsstaette’ or domestic branch office is triggered under a country’s tax code or applicable DTTs (double taxation treaties). Definitions may vary between local tax codes and the (often somewhat wider) DTTs as certain countries try to ‘force’ businesses under their taxation for domestic revenue increases. It is, therefore, crucial to know the intricacies of both local tax laws and DTTs.
Owning real estate or operating internet servers are typical matters where ‘trade or business’ or ‘Betriebsstaette’ (Germany) or ‘Fast driftsstaelle’ (Sweden) and similar matters play an important part.
