For most self-employed expats, the home-country company is the first real obstacle when moving abroad. Social charges on compensation, corporate tax, dividend taxation, compliance obligations, domiciliation rules: the effective tax burden of an entity whose owner lives somewhere else is rarely what you imagined, and the administrative friction is almost always higher.

This guide walks through when to close your home-country company versus keep it running, how to do it properly in the main home jurisdictions (US, UK, Canada, Australia, France), the tax timing that can save or cost you a fortune, and how to set up a new structure abroad without tripping the anti-avoidance rules. For destination ideas, see our entrepreneur abroad guide.

First Question: Close or Keep?

Not every expat needs to close their home-country company. The decision depends on three things.

  1. Where your clients are. If 80 percent of your revenue comes from your home country, keeping a local entity often simplifies invoicing, VAT and trust. A non-resident owner can usually continue to own a home-country company.
  2. Your personal tax residency. Once you break home-country residency, the home company may still be taxable locally, but dividends, salary and capital gains are now assessed under tax treaties and your new country of residence.
  3. Compliance cost versus tax savings. A dormant or low-activity home company often has minimum compliance costs of USD 2,000 to 5,000 per year. If your tax savings from relocation are modest, this overhead can wipe them out.

Keep the home company when: the bulk of clients are local, your new country has weak banking or reputation, or you want an optionality to return within 2 to 3 years.

Close the home company when: you are moving indefinitely, your clients are international or follow you, compliance costs are substantial, and your new country has a more efficient structure.

Dissolution Procedures by Home Country

United States: LLC, S-Corp, C-Corp

Americans cannot escape US tax on worldwide income via expatriation alone (citizenship-based taxation remains), but they can dissolve their business entity.

LLC (single-member or multi-member): File dissolution articles with the state (e.g., Delaware Division of Corporations, California Secretary of State). Publish notice where required (New York, Arizona). File final federal return (Form 1065 for partnerships, Schedule C for SMLLCs) with “Final Return” box checked. Close EIN with the IRS via letter. Total cost: USD 150 to 1,000 depending on state. Timeline: 1 to 3 months.

S-Corp or C-Corp: Shareholder resolution, articles of dissolution, final Form 1120/1120-S, final state franchise tax return, EIN closure. In California, S-Corps owe the USD 800 annual minimum franchise tax until formally dissolved, so timing matters.

Capital gains and distributions: Distributions in dissolution are taxed as capital gains for C-Corp shareholders and as ordinary income / capital gain mix for S-Corp and LLC owners. The SBA dissolution guide and the IRS closing a business page are solid starting points.

Key pitfall for expats: state residency taint. California, New York and New Jersey aggressively claim residency for owners of in-state entities. Dissolving early reduces exposure.

United Kingdom: Limited Company

The UK process is well-documented on gov.uk’s close your company page.

Members’ Voluntary Liquidation (MVL): If the company is solvent and has retained profits, MVL is usually the most tax-efficient route. A licensed insolvency practitioner distributes assets as capital, which can qualify for Business Asset Disposal Relief (10 percent CGT up to GBP 1 million lifetime limit). Cost: GBP 2,000 to 7,000. Timeline: 4 to 9 months.

Strike-off (DS01): Simpler and cheaper (GBP 33 filing fee, 2 to 4 months) but distributions above GBP 25,000 are taxed as dividends, not capital. Suitable only for small reserves.

HMRC clearance: Request clearance before distributing. File final Corporation Tax return, VAT deregistration if applicable, and close PAYE.

Key pitfall for expats: Targeted Anti-Avoidance Rule (TAAR) can reclassify capital distributions as dividends if you restart a similar trade within two years. If your intent is to move abroad and continue a similar activity, structure carefully.

Canada: Corporation (Federal or Provincial)

Voluntary dissolution: File articles of dissolution with Corporations Canada (federal) or the relevant provincial registrar. File final T2 corporate return, clear GST/HST and payroll accounts with CRA, cancel business number.

Deemed disposition on emigration: Under the CRA’s section 128.1 deemed disposition rules, when you cease Canadian residency, you are deemed to have disposed of most property (including private company shares) at fair market value. This can trigger a substantial capital gain. You may elect to defer payment by posting security.

Capital Dividend Account (CDA): Canadian corporations can distribute tax-free CDA balances on dissolution. Max out CDA extraction before breaking residency.

Cost: CAD 200 to 2,000 filing fees, plus CAD 3,000 to 10,000 in accounting and tax advice. Timeline: 3 to 9 months.

Key pitfall for expats: breaking Canadian residency without clearing the Section 128.1 deemed disposition creates departure tax exposure without the offset benefits.

Australia: Pty Ltd

Members’ Voluntary Liquidation: A licensed liquidator distributes assets. Qualifies for CGT discount and potentially the small business CGT concessions (15-year exemption, retirement exemption, 50 percent active asset reduction).

Deregistration (Form 6010): Simpler and cheaper if the company is truly dormant and assets are under AUD 1,000. ASIC fee: AUD 44. Timeline: 2 to 4 months.

ATO clearance: Final company income tax return, final BAS/GST, PAYG withholding finalisation. The ATO business close-down page has the full checklist.

Key pitfall for expats: the CGT event on shares when you cease Australian residency under Subdivision 855-B is similar to Canada’s departure tax. Plan the order carefully.

France: SASU, SARL, EURL

The SASU is the preferred solo structure for French entrepreneurs. Dissolution has more steps than Anglo systems but is well-defined.

Salary compensation taxation: Social contributions for the president (assimilated to an employee) run 60 to 80 percent of gross salary depending on the bracket. For a net salary of EUR 5,000, employer cost is around EUR 8,500 to 9,000.

Dividend compensation: Dividends are first subject to corporate tax (15 percent up to EUR 42,500 profit, 25 percent above), then the 30 percent flat tax (17.2 percent social levies + 12.8 percent income tax). Of EUR 100 in profit, about EUR 57 net remains, an effective rate near 43 percent.

Dissolution-liquidation procedure:

  1. Dissolution decision by the sole shareholder (EUR 300 to 800 in legal or accounting fees, or DIY).
  2. Publication in a Legal Gazette (JAL) in the company’s department. EUR 150 to 250, 24 to 72 hours.
  3. Filing with the Commercial Court Registry via infogreffe.fr. Around EUR 192. Processing: 5 to 15 business days.
  4. Liquidation operations: collecting receivables, paying debts (URSSAF, tax authorities, VAT), closing bank accounts. 1 to 3 months.
  5. Liquidation closure: second shareholder decision, second JAL publication, deregistration filing. EUR 150 to 250 publication + EUR 14 registry fees.

Total cost: EUR 1,000 to 2,200. Total timeline: 2 to 4 months minimum.

Key pitfall for expats: if you are still a French tax resident on the liquidation closure date, the 30 percent flat tax applies on the full liquidation bonus. Breaking tax residency cleanly before liquidation can shift taxation to your new country of residence under the applicable treaty, sometimes to zero or very low.

Timing: The Single Most Important Decision

Across every country, the order of operations shapes your final tax bill more than any other single decision.

Scenario A: Break Residency BEFORE Closing (Usually Best)

If you become a non-resident of your home country before closing the entity, the final liquidation or distribution is usually taxed under the new country’s rules, or under the applicable tax treaty. In many cases, this means reduced or zero taxation on the final distribution, especially if your new country does not tax capital gains or liquidation distributions (examples: UAE, Georgia, Panama, some cantons of Switzerland).

Essential condition: the residency break must be real and effective before the dissolution date. You must have transferred your habitual home, your main personal and economic ties, and stopped conducting the activity from the home country.

Main risk: if the tax authority (IRS, HMRC, CRA, ATO, DGFiP) determines residency did not genuinely shift, they will reclassify and apply home-country tax on the full amount, often with interest and penalties.

Scenario B: Close BEFORE Leaving

If you dissolve while still a resident, the distribution is taxed fully under home rules. This is the simplest path administratively but the worst tax outcome if your company has substantial reserves.

Acceptable when the final distribution is small, or when you want a clean, unambiguous break without treaty risk.

Departure Tax / Exit Tax: The Trap Nobody Sees Coming

Most developed countries have some form of exit tax or deemed disposition on accrued capital gains when you cease residency.

  • Canada: Section 128.1 deemed disposition at fair market value.
  • Australia: CGT event I1 under Subdivision 104-I.
  • France: exit tax on shares held by residents owning more than 50 percent of a company, or with shares above EUR 800,000, since 2011 (see impots.gouv.fr exit tax guidance).
  • United States: “expatriation tax” under Section 877A applies to certain covered expatriates who renounce citizenship or long-term green cards (does not apply to temporary residents abroad).
  • United Kingdom: no pure exit tax, but temporary non-residence rules can claw back gains if you return within 5 years.

Planning tip: before breaking residency, get a valuation of your shares. Crystallise any elections, pay or defer exit tax deliberately. The difference between doing this with 12 months of planning versus 2 weeks of planning can be six figures.

Setting Up the New Structure Abroad

Once the home entity is closed (or parked), you typically want a new vehicle in or near your new country of residence. A quick comparison of the most popular expat structures:

Estonia: OU (Osauhing)

Formation: EUR 190 state fee via e-Residency, possible in 24 hours online. Minimum capital EUR 2,500 (can be unpaid). Taxation: 0 percent CIT on reinvested profits, 22 percent on distributed profits (2025 rate). Full EU access. Pros: fully digital, lowest admin in the EU, credible internationally. Cons: not ideal if your clients or operations are heavily local to another country.

See our Estonia guide.

United Arab Emirates: LLC or Free Zone Company

Formation: USD 3,000 to 15,000 depending on free zone. No minimum capital for most free zones. Taxation: 9 percent CIT above AED 375,000 (small business relief below), 0 percent income tax. No dividend withholding. Pros: very low taxation, prestigious, world-class infrastructure. Cons: high setup and annual license fees (USD 2,000 to 6,000/year), banking friction.

See our Dubai / UAE guide.

United Kingdom: Limited Company (as a non-resident)

Formation: GBP 50 online at Companies House. No minimum capital. Taxation: 25 percent CIT (19 percent small profits rate to GBP 50,000). Non-resident directors can run the company, but central management must be outside the UK to avoid UK tax residency of the company itself. Pros: fast, cheap, globally trusted. Cons: if management stays UK-resident, the company becomes UK tax resident.

United States: Delaware or Wyoming LLC (as a non-resident)

Formation: USD 100 to 300 via Delaware Division of Corporations or Wyoming Secretary of State. Same-day. Taxation: a non-US-owned single-member LLC is generally a pass-through. If no US-sourced income and no effectively connected income, federal tax can be zero. Form 5472 + 1120 required annually. Pros: low cost, respected internationally, Stripe/Wise friendly. Cons: compliance is trickier than it looks (FBAR, BOI, state franchise tax).

Georgia: LLC or Individual Entrepreneur

Formation: USD 50 to 200, 1 day, no minimum capital. Taxation: 15 percent CIT on distributed profits only (Estonia-style), or 1 percent turnover tax for Individual Entrepreneur under Small Business Status up to GEL 500,000. Pros: fast, cheap, extremely low effective rate for IT and consulting. Cons: less treaty coverage, developing banking.

See our Georgia guide.

Comparison Table

Criterion FR SASU UK Ltd US LLC EE OU UAE Free Zone GE LLC
Formation cost ~EUR 300 GBP 50 USD 100-300 EUR 190 USD 3k-15k USD 50-200
Annual admin cost EUR 1.5k-3k GBP 500-2k USD 500-2k EUR 1k-2k USD 2k-6k USD 300-500
Effective CIT 15-25% 19-25% 0% (pass-through) 0%/22% on distrib. 0-9% 0-15%
Owner compensation burden 60-80% charges Dividends flex. Self-employment tax issue Moderate None Low (1% IE)
International credibility High (EU) Maximum Maximum High (EU) Moderate Low

Transferring Clients and Contracts

The practical hand-off is often underestimated.

  • Contract novation: ongoing contracts with the old entity must be transferred (tripartite assignment) or terminated and restarted with the new entity. Some clients require updated KYC, vendor onboarding, insurance certificates.
  • Intellectual property: trademarks, copyrights, domain names, software codebases must be assigned from the old entity to the new one before dissolution. Assignment can itself have taxable value in some jurisdictions.
  • Track record: keep contracts, invoices and delivery proofs from the closed entity. Future clients may still request historical references.
  • Client communication: notify clients 2 to 3 months ahead so their AP, procurement and compliance teams can update records.

Document Retention After Closure

Every jurisdiction requires records to be kept for years after dissolution.

Store in encrypted cloud plus a second local backup. You may need them in a tax audit, which can occur up to 3 to 6 years after closure under standard rules, and longer where fraud is suspected.

Fatal Mistakes to Avoid

  1. Closing before establishing new tax residency. The single most common trap. If you are still a home-country tax resident on the liquidation date, full domestic tax applies regardless of your intentions.
  2. Forgetting anti-avoidance rules. UK TAAR, US Section 367, French CFC (Articles 209 B CGI), Canada FAPI, and Australian CFC rules all can pull foreign company income back into home taxation if you control a low-tax foreign structure holding passive income.
  3. Skipping economic substance. The UAE, Cayman, BVI and others have substance rules since 2019. A shell with no local staff, office, or real management is increasingly risky.
  4. Underestimating total timeline. From decision to close, through liquidation, new entity setup, and clean residency break, plan 6 to 12 months for a clean operation.
  5. Forgetting exit tax filings. Canada’s T1243, Australia’s CGT event I1 disclosure, France’s 2074-ET form, US Form 8854 for renunciants. Missing these creates expensive tails.
  6. Neglecting social security clearance. In Europe especially, unwinding URSSAF, NI, or equivalent is separate from tax and has its own deadlines.

For deeper destination research before recreating your activity, see our entrepreneur abroad guide, our starting a company abroad article, and the country-specific pages.