Relocating while running a business? Keep the two tax assessments separate

An entrepreneur’s relocation raises questions about both the individual and the company’s activities. Establishing personal tax residence does not automatically settle the consequences of managing the business from another country.

Describe two separate sets of circumstances

The personal plan concerns your home, family, activities and ties to each country. The company’s plan concerns its people, assets, contracts and decisions. Even where one person is central to both, the relevant information and rules are not identical.

The Romanian Fiscal Code contains individual residence criteria and separate rules on the place of effective management in Romania of foreign legal entities. When moving to another country, that country’s legislation must also be checked. The company’s position cannot be inferred solely from its shareholder’s address or personal residence certificate.

In a hypothetical example, the founder of a Romanian company moves abroad and continues approving important contracts from there. The review needs to examine actual responsibilities and practices alongside the roles of other directors. Keeping the company’s registered address unchanged is not, by itself, a complete answer.

Explain how the business will operate after the move

Where will important decisions be prepared and made? Who negotiates with counterparties, who can commit the company, and where does the team work? These questions help identify matters requiring assessment concerning company residence, a possible taxable presence and employment-related obligations.

In parallel, the ANAF guide for individuals’ tax residence explains personal documentation and procedures on arrival or departure. Coordinate that process with a review of personal income: salaries, remuneration, dividends and other sources may follow different rules. Completing a personal formality does not replace an assessment of company flows.

Governance records should reflect the real organisation. Minutes and mandates are useful when they record actual decisions and responsibilities, rather than retrospectively creating an appearance about where the business was managed.

A checklist for a coordinated plan

• Describe the individual’s, family’s and each company’s circumstances separately.
• Establish who will make important decisions and where they will work.
• List relevant contracts, mandates and personal income sources.
• Check both countries’ rules and the applicable tax treaty.
• Coordinate personal formalities with the company’s obligations review.
• Reassess the plan if responsibilities, the team or physical presence change.

Preparing before the move helps identify dependencies between decisions and the records to keep as the transition unfolds. Update the plan to reflect how relocation actually happens, especially where the transition takes time. A decision made early in the process may need revisiting when temporary arrangements become the ongoing way of working.

For a focused discussion, prepare the organisation chart, your role and intended working arrangements after relocation, alongside your personal moving timetable.

This article provides general information, not individual advice. Relocation and cross-border management require assessment of the facts, both countries’ rules and the applicable treaty.