In every case you must be proactive and forward looking, and see what it would cost to set up in your chosen jurisdiction with some economic substance. Historically economic substance was a problem for bigger companies and ‘little people’ you could open a bvi and operate it from practically anywhere and nobody worried. Now its all about economic substance in your chosen jurisdiction or you can expect your company sooner or later will be treated as transparent for tax purposes. If you are using tax treaties to reduce taxes then thats another subject again. The days of walking away when troubles arise are almost gone… everything is recorded these days and tax penalties are retrospective. Beneficial ownership recording and tax info sharing is the norm now. If you own a company in country x as the sole owner, but you reside in country y, and if you have no economic substance in country x, then its a transparent structure and you really need to be sure about all the tax implications. Really simple things can cause headaches. For example, if your company owns a product that it sells and you want to transfer ownership of that product from one country to another then one question is, is tax applied for that transfer of property and if yes how much and how must it be reported to the tax office? These days the old flag theory is almost dead and likely to get you into hot water if economic substance is not satisfied. One option that has a lot going for it today for people who are not wealthy enough to buy a citizenship or residency package based on good tax planning is to learn all about your preferred country to operate your business and live there long enough each year to prove its your centre of business activity and home. Thats the only way I can see to get some certainty about your true tax situation, and avoid troubles later. For this you want a country that you actually like to live in, with a simplified non-complex tax system and a good number of tax treaties, and where the locals welcome foreigners. It is not uncommon for locals to be indifferent to foreigners, or worse still smiling on the face but underneath actually antagonistic. Look out for this type of scenario in countries that were colonies or otherwise were ruled by foreigners not that long ago.