Compliance Residency or Tax Residency? The Difference That Decides Where You Pay, and Where You Can Bank

Status as of 22 October 2026: based on the OECD Common Reporting Standard and its Commentary, the OECD's guidance on tax residency and on residence and citizenship by investment schemes, Council Directive 2014/107/EU (DAC2) and Council Directive (EU) 2023/2226 (DAC8), Article 21c of Directive 2013/36/EU as inserted by Directive (EU) 2024/1619 (CRD VI), Article 16 of Directive 2014/92/EU on payment accounts, Article 4 of the OECD Model Tax Convention, sections 8 and 9 of the German Fiscal Code and section 1 of the German Income Tax Act, section 2 of the German Foreign Tax Act, Article 7 of the Romanian Fiscal Code (Law 227/2015), the Cyprus Income Tax Law, Article 116 of Argentina's Income Tax Law, the Tax Code of Georgia, Panama's Fiscal Code and Paraguay's Law 6380 of 2019. We will update this guide when the rules change.

Somewhere over the Atlantic, at eleven thousand metres, a woman closes her laptop after a board call. She sold her first company four years ago. Since then she has spent a spring in Asunción, a summer on the Adriatic, an autumn in Tbilisi and a winter wherever the light was good. In her wallet: a Paraguayan cédula, a Georgian residence card, a passport. In her inbox: statements from three banks in three legal systems. What she does not have is a tax office that considers her its property.

She is not hiding. She left her old country by the book, filed the forms, gave up the flat, and since then she has simply never stayed long enough anywhere for any state's residence test to reach her. No state taxes her worldwide income because no state has a legal claim to it. That is not a loophole. That is what happens when you take the rules seriously and stop handing over a claim you were never obliged to give.

Most people never even see this option, because they confuse two different things. A compliance residency and a tax residency are two different documents, issued by two different authorities, answering two different questions. One question is: may you stay here? The other is: must you pay here? Confuse them and you either pay twice, or you believe you have left a country that still considers you its taxpayer. Separate them and the world opens: you can collect doors without collecting bills, and you can decide whether you want a tax home at all.

Two terms the international community uses. A compliance residency is a legal residence status, usually a residence permit with a local ID card and often a local tax number, that gives you official documents for banks, brokers and authorities. In law it is simply a residence permit. Your tax residency is the state that may tax your worldwide income under its own tax law. The first is about documents and the right to stay; the second is about the bill. A compliance residency is never a fake address: it is a real legal status that must be kept alive and declared honestly.

This guide is written for people who treat the state as a service provider: something you choose, compare and, when the offer is poor, leave. Exit beats complaint. Free people read the rules. Then they use them.

The short version

• A compliance residency is immigration law. In legal terms it is a residence permit. It gives you the right to enter, stay and often work in a country. It is issued by a migration authority.
• Tax residency is tax law. It decides which state may tax your worldwide income. Each state sets its own test, usually based on a home, the centre of your life or days of physical presence.
• The OECD says it plainly. The mere right to reside in a jurisdiction, temporary or permanent, does not automatically make you a tax resident there, and it does not by itself end your tax residency in your former country.
• Some permits do pull you into tax residency. Argentina, for example, treats foreigners as tax residents once they obtain permanent residence. Read the tax law of every country before you collect its card.
• Banks ask about tax residency, not about your cards. Under the Common Reporting Standard you self-certify every jurisdiction where you are tax resident. Banks may rely on that statement unless they have reason to doubt it.
• Two proven routes. Route one: the perpetual traveller (PT) path, with no fixed tax residency, compliance residencies for banking and documents, and no country's threshold ever reached. Route two: one chosen tax home, often territorial or low-tax, plus several compliance residencies as keys. Both are lawful when done properly; the right one is the one that fits your life.

Compliance residency and tax residency: two documents, two questions

A compliance residency answers the question "may you stay?" It is an administrative authorisation under immigration law. In Panama it is issued by the National Migration Service, in Paraguay by the Dirección Nacional de Migraciones, in Georgia by the Public Service Development Agency. It comes as a card, a sticker or a resolution, with a number and an expiry date or a permanent status. It tells border police and landlords that you are lawfully there. It may oblige you to visit from time to time to keep it alive. It does not, in itself, tell anyone where your income is taxed.

Tax residency answers the question "must you pay?" It is a status under tax law, determined by each state's own rules. A tax resident is usually taxed on worldwide income; a non-resident only on income from sources in that state. No card proves it on its own. The proof is a set of facts: where your permanent home is, where your family lives, where you spend your days, where your economic interests sit. A tax residence certificate, issued by a tax authority on request, records the conclusion that authority has drawn from those facts.

The two can coincide. A German who moves to a country, rents a flat, moves the family and lives there all year will usually hold both a residence permit and tax residency in that country. But they can also come apart completely, in both directions:

• Permit without tax residency. You hold a permanent residence card in Paraguay, visit once a year, and live elsewhere. Under Paraguayan tax law you are very unlikely to be resident there for tax purposes on those facts alone.
• Tax residency without a permit. An EU citizen who moves within the EU needs no residence permit in the immigration sense, only a registration certificate. Yet after more than six months in Germany, or 183 days in Romania, that person is a tax resident.

The Organisation for Economic Co-operation and Development (OECD), which designed the global standard for exchanging bank data between tax authorities, put this into a single sentence on its tax residency portal: the mere right to reside in a given jurisdiction, on a permanent or temporary basis, or the fact of holding its citizenship, does not automatically mean that a person shall be considered a tax resident there, nor that tax residency in the former jurisdiction is extinguished. Keep that sentence. It protects you from two expensive illusions at once.

The conclusion. A compliance residency is a key. Tax residency is the address where a state sends its bill, and only a state whose own test reaches you can send one. You may hold many keys. Whether any bill arrives, and from whom, is a matter of design.

How states decide where you are tax resident

Every state writes its own test, and most tests look at facts, not paperwork. The details matter, because they decide whether your old country still has its hand on your income.

Germany. You are subject to unlimited income tax liability if you have a residence (Wohnsitz) or your habitual abode (gewöhnlicher Aufenthalt) in Germany (section 1 of the Income Tax Act). A Wohnsitz exists wherever you keep a dwelling under circumstances suggesting you will keep and use it (section 8 of the Fiscal Code). That is why a flat in Munich you "occasionally" use can keep you German for tax purposes even after you have deregistered at the town hall. Habitual abode is presumed after more than six months of continuous stay (section 9). For German citizens who leave for a low-tax country while keeping essential economic interests in Germany, section 2 of the Foreign Tax Act can extend a limited tax liability on German-source income for up to ten years after departure.

Romania. Article 7 point 28 of the Fiscal Code treats an individual as resident if any one of these is true: domicile in Romania, the centre of vital interests in Romania, or presence in Romania for more than 183 days in any twelve-month period ending in the tax year. The centre of vital interests test catches people who move their body but leave their family and business behind.

Cyprus. An individual is tax resident after more than 183 days in a calendar year, or under the 60-day rule, which requires at least 60 days in Cyprus, a business, employment or office in Cyprus, a permanent home there, and not spending more than 183 days in any other single state. A resident who is not domiciled in Cyprus pays no SDC on dividends and interest under the non-dom regime. We explain both rules in our guides to Cyprus tax residency and non-dom status and the 60-day rule calendar.

Argentina: the counterexample. Article 116 of Argentina's Income Tax Law treats foreign nationals as tax residents once they have obtained permanent residence, or after twelve months of stay under temporary authorisations. Here the permit and the tax status are deliberately linked. Argentine tax residents are taxed on worldwide income. Anyone collecting Argentine residence as a Plan B must plan the timing and the exit from that status with an Argentine adviser. Our Argentina citizenship guide covers the route.

When two states both claim you. Tax treaties based on Article 4 of the OECD Model Tax Convention resolve dual residence with a ladder: permanent home first, then the centre of vital interests, then habitual abode, then nationality, and finally agreement between the two tax authorities. The ladder works only where a treaty exists between the two states, and only for the taxes the treaty covers. Germany and Romania both have treaties with many countries; whether one exists with your Plan B country is a fact to check, not to assume.

Bold rule to remember. Your old country does not lose interest in you when you obtain a card elsewhere. It loses interest when its own test no longer catches you.

The test decides, not the card. We check yours before you move a single euro. Book a consultation.

The compliance residency that does not send a bill

Here is where the opportunity sits. Several countries that offer accessible residence also tax individuals mainly on income from local sources. For a person who holds the permit but lives and earns elsewhere, the permit opens a door without opening a tax file worth worrying about. Even for a person who does move there, foreign-source income is often outside the local tax net.

Panama. Panama's tax system is territorial: income tax applies to income from sources within Panama (Article 694 of the Fiscal Code). Income earned abroad is generally not Panamanian taxable income. The country offers several residence routes, from the Friendly Nations permit to investor routes, which we compare in our Panama Plan B episode.

Paraguay. Paraguay's personal income tax under Law 6380 of 2019 is built on the source principle: it targets income from Paraguayan sources. Temporary and permanent residence are accessible and comparatively inexpensive. Our Paraguay Plan B episode explains the documents, the timeline and the visits needed to keep the status alive.

Georgia. The Tax Code of Georgia exempts a resident individual's foreign-source income from personal income tax (Article 82). Georgia also allows a high net worth individual to become tax resident without 183 days of presence, which is the subject of our Georgia HNWI guide. For the residence routes themselves, see our Georgia Plan B episode.

Argentina. The opposite design, as shown above: residence leads to tax residence, and residents pay on worldwide income. Valuable as a door, never by accident as a home.

Mexico, Montenegro, Turkey and the Philippines each have their own mix of residence routes and tax tests. We wrote one episode for each in the Plan B series: Mexico, Montenegro, Turkey and the Philippines.

Read that list as a menu of doors. Each one works for you on its own terms. One thing to know: while you still live in Germany or Romania, those states tax your worldwide income whatever cards you hold, so the cards pay off fully once the exit is done. A cédula from Asunción does not cancel a flat in Frankfurt; giving up the flat does.

Step one for every route: leave properly

Your freedom starts with a clean exit. Whichever route you choose, the old country's rules on leaving decide when its claim ends. The classic error is a person who obtains a residence card abroad and assumes the old tax residency has ended. It has not, unless the facts have changed.

Consider what the German and Romanian tests look at. A flat kept available. A spouse and children still at the old address. A company managed from the old kitchen table. More than six months, or more than 183 days, still spent in the old country. Any one of these can keep you resident there, whatever card sits in your wallet.

The exit therefore has its own checklist:

1. End the home, or make it clearly unavailable. In Germany a let-out flat at arm's length is very different from a furnished flat waiting for you.
2. Move the centre of your life. Family, daily routine, doctors, clubs, the place you return to.
3. Count the days, with evidence: flights, entry stamps, rental contracts, card payments.
4. Deregister formally where the law provides for it, and tell the tax authority in the form it expects. In Romania: file form Z017 with ANAF 30 days before you leave, then the tax residence certificate from your new country where one is issued; in Germany, deregistration at the residents' office plus a final tax return.
5. Check exit taxes before you go. Germany's section 6 of the Foreign Tax Act taxes unrealised gains on substantial shareholdings in companies when you leave; planning comes before the move, not after.
6. Take a new tax home that a reasonable person would accept, with a tax residence certificate where the new country issues one.

Germans who want the full sequence can read our Germany to Cyprus step-by-step guide. The logic is the same wherever you go: first the exit, then the arrival, with paperwork for both.

Do it in the right order and nobody has a reason to question it. Let's plan your exit.

Banks: what the rules really say

We often hear the same story from people at the start of this journey: "Once you live in the EU, banks outside the EU will not open an account for you anymore. A residence outside the EU fixes that." There is a real rule behind this story, and a lot of noise around it. Here is what the primary sources say.

Rule one: the Common Reporting Standard asks for your tax residency. Under the OECD Common Reporting Standard (CRS), implemented in the EU by Council Directive 2014/107/EU (known as DAC2), a bank opening a new account must obtain a self-certification in which you state every jurisdiction where you are tax resident, with a taxpayer identification number where one is issued. The bank then reports your account to the tax authority of each jurisdiction you named, if that jurisdiction participates in the exchange. Since 1 January 2026, Council Directive (EU) 2023/2226 (DAC8) extends similar due diligence and reporting to crypto-asset service providers in the EU.

Rule two: the bank may rely on your statement, but not blindly. The OECD's CRS guidance says a bank may rely on the self-certification unless it knows or has reason to know that it is incorrect or unreliable. The bank checks it against everything else it holds about you: your address, your phone number, your passport, your payment patterns.

Rule three: certain investor permits are flagged. The OECD has analysed more than 100 residence and citizenship by investment schemes. Those that give access to a personal income tax rate below 10% on offshore financial assets and do not require at least 90 days of physical presence are treated as potentially high risk for CRS purposes. The OECD's current table lists three Panamanian permits, identified on the ID card by the codes PRP-FOR, PRP-SEP and PRP-PA. When a client presents such a document, banks are expected to ask further questions, for example whether you hold residence rights elsewhere and whether you spent more than 90 days in another jurisdiction in the previous year. Some banks also keep their own wider internal lists.

What this means in plain words. A Panamanian card is a perfectly legitimate key. But if you present it to a bank as proof that Panama is your only tax residence while you obviously live in Vienna, the bank is not only allowed to doubt you; it is told to. The card works best when your tax story is true.

Rule four: from 11 January 2027, non-EU banks need an EU branch to serve EU residents. Article 21c of the Capital Requirements Directive, inserted by CRD VI (Directive (EU) 2024/1619), is the rule behind that story. In the wording our legal reviewer cleared for our banking series: from 11 January 2027, banks outside the EU generally need an authorised EU branch to provide core banking services (deposits, lending, guarantees) to EU residents. Contracts concluded before 11 July 2026 stay protected unless materially changed; anything signed after that date has no such protection. Reverse solicitation remains, but only where you approach the bank on your own exclusive initiative, and it is read narrowly. Transposition is uneven across member states; check your state. The full analysis is in our guide to CRD VI and non-EU banks.

What CRD VI does not say. It does not stop EU banks from serving you. It does not make a foreign account illegal for you. And it does not let a residence card replace the facts: the rule looks at where the client is established or situated, so a person who lives in the EU with a non-EU card in the drawer is, in the eyes of a careful bank, still an EU resident.

And inside the EU, the law points the other way. Article 16 of the Payment Accounts Directive (2014/92/EU) gives every consumer legally resident in the EU the right to open a basic payment account with a bank in any member state. So "EU residence closes bank doors" is wrong as a general statement. What is true is narrower: EU residence will, from 2027, close many doors at banks outside the EU that do not build an EU branch, and EU banks themselves remain free to decline accounts for risk reasons other than residence.

Bold rule to remember. Banks do not care how many cards you hold. They care that your tax residency statement is true and that your life matches it.

We prepare the file a bank wants to see, before you sit down at the desk. Book a consultation.

Why a non-EU compliance residency still opens doors

Now the good news, and it is substantial. Our analysis, based on the rules above:

A genuine life outside the EU opens non-EU banking. If you really live in Panama, Paraguay or Georgia for a meaningful part of the year and your tax home is there or in another country outside the EU, CRD VI simply does not reach you. A non-EU bank can serve you on ordinary terms, subject to its own onboarding standards.

A permit plus a true tax story makes onboarding easier everywhere. Local banks in many Plan B countries prefer clients with a local residence card and local tax number. A permit gives you both. Combined with a clear self-certification naming your real tax home, it turns you from an "unexplained foreigner" into a resident with a coherent file.

A second banking system is a second exit. One bank in one jurisdiction can freeze, close or "de-risk" you with a letter. Accounts in two or three legal systems, each opened lawfully and reported correctly, mean that no single institution holds your entire life. That is not concealment. Every one of those accounts is reported under CRS to your tax home. It is diversification, the same principle you already apply to your investments.

A permit is an option on the future. Laws change. Currencies fall. Borders close, as many people learned in 2020. A residence status kept alive in a stable country outside the EU is a right you can exercise when you need it, rather than a process you start in a crisis.

A Plan B with a backup is not paranoia. It is prudence.

Route one: the perpetual traveller, with no fixed tax residency

This is the boldest form of sovereignty, and real people live it every day. Founders, investors, writers and consultants who earn online or from their capital have built lives in which no state treats them as tax resident. They are not outlaws. They have used three facts that the law itself provides: every state decides tax residency by its own test; those tests are built on a home, the centre of your life or a number of days; and a person who meets none of those tests anywhere is, under those laws, not a tax resident there. Two exceptions apply: a few states, such as the United States, tax their citizens wherever they live, and some states, such as Germany under section 2 of the Foreign Tax Act, can keep taxing income from their territory for years after you leave. The OECD's own guidance confirms the first half of the logic: a right to reside, on its own, does not make you tax resident.

How it works, in four moves.

1. Leave your old tax residency properly. Deregister, give up or let out the home at arm's length, move family and economic life, file the departure forms your country requires (in Romania form Z017 with ANAF 30 days before you leave; in Germany deregistration plus a final return), and settle exit taxes on shareholdings in advance.
2. Stay below every threshold. Spread your year so that no country reaches its residence test: under 183 days, no permanent home kept available, no centre of vital interests. Many PTs keep each stay to a few months and rotate between regions they love.
3. Hold compliance residencies for paperwork and banking. A Paraguayan or Panamanian card, a Georgian permit: legal statuses that give you an ID, an address and often a local tax number, without making you tax resident while you do not live there.
4. Keep your income structure aligned. Income sourced in a country can still be taxed there as source income, whatever your residence. PTs therefore plan where their companies, clients and assets sit.

How to make it solid.

• Departure file. Keep the deregistration certificate, the final return, the termination or arm's-length lease of the old home, and the departure form. This is the first thing anyone will ask for, and with it the conversation is short.
• Travel log. Record every entry and exit with boarding passes, stamps and accommodation invoices. A simple spreadsheet updated monthly turns your day count into evidence.
• German citizens: section 2 of the Foreign Tax Act can extend a limited German tax liability for up to ten years on German income if you keep essential economic interests in Germany, and this applies even if you are not resident in any other state. Plan your German-source income and holdings before you leave.
• Romanians: domicile in Romania alone makes you resident under Article 7 point 28 of the Fiscal Code, so moving your domicile abroad is part of the exit, not an afterthought.
• The CRS form, done right. The self-certification asks where you are resident for tax purposes. The answer is the truth under each country's law. If no state treats you as tax resident, you say so and explain briefly: deregistered from your former country on a given date, not meeting the residence test of any other state, holder of residence permits in named countries. Attach the departure file if asked. Many institutions then apply their own procedure, which may include reporting you to the country of the address or residence documents you provide. A residence permit or address is not a tax residence, and you never present it as one. Never name a country as your tax residence when it is not; the truth is your strongest document.
• Choose institutions that understand the profile. Some banks and fintechs onboard international clients with residence permits from several countries and a documented exit; others do not. Selecting the right ones, in the right order, is part of the work we do, and it is where most self-built setups lose time.
• Treaty relief is the trade-off you choose. Without a tax home you do not claim double tax treaty benefits or a tax residence certificate. For people whose income is not hit by foreign withholding taxes, this costs little; for others, route two may fit better.

Route one is not for the timid. It is for people who have decided that their life belongs to them. Let's design your PT setup.

Route two: one chosen tax home, several keys

Some people want roots: a home base for the children's school, a treaty network, a tax residence certificate in the drawer. For them the elegant answer is one tax home chosen deliberately: a territorial country where they actually live, Georgia under its HNWI rules, or an EU base such as Cyprus with non-dom status and no SDC on dividends. Around that home, as many compliance residencies as they find useful, each kept alive and declared correctly. A Plan B with a backup, and a state that you picked yourself.

People also move between the routes. Many live as PTs for some years and later settle; others start with a home base and loosen it once the children have grown. Both routes share the same tools: a clean exit, live compliance residencies and a banking file that tells one consistent story.

Two routes, one principle: you choose, not the state of your birth. Tell us where you want to be.

How we build it, for either route

How the work runs, in the order we follow with clients:

1. Diagnosis. We establish where you are tax resident today under your country's own test, what ties keep you there, and what an exit would trigger, including exit tax on shareholdings.
2. Choice of route. PT with no fixed tax residency, or one chosen tax home. We compare both against your income type, your travel pattern and your family.
3. Choice of keys. We select one to three compliance residencies that fit the route: a territorial country for flexibility, a second continent for redundancy, a country with strong local banking.
4. Sequence. Exit first, arrival second, permits in parallel where they do not create a tax claim. Argentina, for example, is timed carefully because of Article 116.
5. Banking file. For each bank: passport, residence card, proof of address, tax residence certificate or a reasoned self-certification, source of funds and source of wealth. Consistent across all banks.
6. Maintenance calendar. Minimum visits for each permit, renewal dates, day counts and travel log, annual returns. A permit lost through neglect is a door you locked yourself.

Licensed lawyers and tax advisers in each country execute the filings in their own name. We coordinate the whole design so that the pieces fit.

Three illustrative cases

These cases are illustrations built from typical client profiles, not real persons, and they are not advice for any specific situation.

The consultant who kept his flat. A German IT consultant obtains permanent residence in Paraguay, deregisters in Germany and travels for most of the year. He keeps his furnished flat in Hamburg "for visits". Under section 8 of the Fiscal Code, that flat can keep him a German tax resident. The Paraguayan card changes nothing. The fix is to let the flat at arm's length or give it up, and to establish a real tax home elsewhere before the next tax year.

The founder with a clean story. A Romanian e-commerce founder moves to Cyprus, passes the 183-day test and becomes non-dom, with no SDC on dividends. He also holds a Georgian residence permit and an account with a Georgian bank. In every CRS self-certification he names Cyprus as his tax residence. The Georgian card is a key and a second banking system, not a tax claim, and every bank receives the same coherent file.

The perpetual traveller. A German software founder deregisters, lets her Munich flat long-term at arm's length through an agent, keeping no right to use it herself, sells her German shareholding after settling exit tax, and holds compliance residencies in Paraguay and Georgia. She spends roughly three months each in South America, the Caucasus, Southeast Asia and Southern Europe, never long enough to meet any state's residence test, and keeps a monthly travel log. Her clients are worldwide; she keeps no essential economic interests in Germany. Her banks hold her departure file, her residence cards and a self-certification that states her position truthfully. On these facts, no state taxes her worldwide income, because no state's residence test reaches it.

Three lives, one principle: decide where you belong, then document it. Book a consultation.

What separates a solid setup from a sloppy one

• Treating a card as an exit. The old residency ends when the old test stops catching you, not when the new card arrives.
• Collecting a permit that creates tax residence. Check the tax law of every permit country, not only its immigration rules.
• Letting permits lapse. Many permanent statuses require periodic visits. Diarise them.
• Telling different banks different stories. Your self-certifications must match each other and your life.
• Ignoring exit taxes. Shareholdings, pension rights and real estate can be taxed on departure or afterwards.
• Building route one without a departure file and travel log. The freedom is real; the evidence is what keeps it effortless.

The circle: who builds a life like this

The people who build their lives this way rarely look alike. A software founder who sells to clients on four continents. A family that wants its children to grow up with more than one horizon. An investor who remembers what a currency crisis does to a single-country portfolio. A doctor who has decided that thirty years of paying for a system gave him the right to choose where he spends the next thirty.

What they share is a way of thinking. They treat wealth as private property, earned and therefore theirs to protect. They treat residence as a choice, not an inheritance. They see the state as a provider of services, not as an owner, and when the service is poor they take their business elsewhere. Some of them have no fixed tax residency at all; others chose a home that treats them well. They read the rules, follow them precisely, and refuse to let one state, one bank or one passport become a single point of failure. They do not hide. They structure.

ENCC coordinates these designs end to end. Independent, licensed lawyers and tax advisers in each country carry out the legal work. You keep one point of contact who understands the whole picture.

If this is how you think, you are already one of us. Tell us where you want to be.

FAQ

Does a compliance residency make me tax resident in that country?

Not automatically. The OECD states that the mere right to reside does not by itself create tax residency. Each country applies its own tax test. Some, such as Argentina for permanent residents, do link the two, so check the tax law of every country before applying.

If I get a permit abroad, do I stop being tax resident at home?

Only if your home country's test no longer catches you. In Germany a dwelling kept available or more than six months of stay can keep you resident; in Romania domicile, the centre of vital interests or more than 183 days in twelve months can.

Can I hold residence permits in several countries at once?

Usually yes, if each country's conditions are met, including minimum visits. Tax residency is a different matter: you should have one documented tax home, and where two states claim you, a treaty may decide.

What do I write on a bank's CRS form?

Every jurisdiction where you are tax resident under its law, with your tax number. Not the countries where you merely hold a permit. Banks may rely on your statement unless they have reason to doubt it, and they compare it with everything else they know.

Will EU banks refuse me because I live in the EU?

No general rule says so. EU law gives every consumer legally resident in the EU the right to a basic payment account. The restriction from 11 January 2027 applies to banks outside the EU, which generally need an authorised EU branch to serve EU residents.

Is having no fixed tax residency legal?

Yes, where you have left your former country under its rules and no other state's residence test reaches you. Each country's law decides, so the exit file and the travel log matter. Two exceptions apply: a few states, such as the United States, tax their citizens wherever they live, and some states, such as Germany under section 2 of the Foreign Tax Act, can keep taxing income from their territory for years after you leave. Thousands of perpetual travellers live this way; we help you build it properly.

Which Plan B countries tax mainly local income?

Panama and Paraguay tax individuals mainly on local-source income, and Georgia exempts a resident individual's foreign-source income. Rules and details change, so each case needs current local advice.

How do I keep a permanent residence alive?

Each country has its own minimum presence rules. We record the required visits and renewal dates for every status in a maintenance calendar.

Next steps

Start with the Plan B episodes for the countries that interest you: Paraguay, Panama and Georgia. For banking outside the EU, read CRD VI and non-EU banks. For an EU tax home, read Cyprus tax residency and non-dom status. All our guides are on the English blog.

Sources

• OECD, tax residency guidance on the automatic exchange of information portal: https://www.oecd.org/en/networks/global-forum-tax-transparency/resources/aeoi-implementation-portal/tax-residency.html
• OECD, residence and citizenship by investment schemes and the potentially high-risk list: https://www.oecd.org/en/topics/sub-issues/international-standards-on-tax-transparency/residence-citizenship-by-investment.html
• OECD, CRS-related frequently asked questions (reliance on self-certification): https://www.oecd.org/content/dam/oecd/en/topics/policy-issues/tax-transparency-and-international-co-operation/crs-related-faqs.pdf
• Council Directive 2014/107/EU (DAC2): https://eur-lex.europa.eu/eli/dir/2014/107/oj
• Council Directive (EU) 2023/2226 (DAC8): https://eur-lex.europa.eu/eli/dir/2023/2226/oj
• Directive (EU) 2024/1619 (CRD VI), Article 21c: https://eur-lex.europa.eu/eli/dir/2024/1619/oj
• Directive 2014/92/EU on payment accounts, Article 16: https://eur-lex.europa.eu/eli/dir/2014/92/oj
• OECD Model Tax Convention, Article 4: https://www.oecd.org/en/publications/model-tax-convention-on-income-and-on-capital-condensed-version-2017_mtc_cond-2017-en.html
• German Fiscal Code, sections 8 and 9: https://www.gesetze-im-internet.de/ao_1977/__8.html
• German Income Tax Act, section 1: https://www.gesetze-im-internet.de/estg/__1.html
• German Foreign Tax Act, sections 2 and 6: https://www.gesetze-im-internet.de/astg/
• Romanian Fiscal Code, Law 227/2015, Article 7: https://static.anaf.ro/static/10/Anaf/legislatie/Cod_fiscal_norme_2023.htm
• Cyprus Tax Department, tax residency: https://www.mof.gov.cy/mof/tax/taxdep.nsf/page26_en/page26_en
• Argentina, Income Tax Law, Article 116, and ARCA guidance on residence: https://arca.gob.ar/gananciasYBienes/ganancias/conceptos-basicos/residencia.asp
• Tax Code of Georgia (Legislative Herald of Georgia): https://matsne.gov.ge/en/document/view/1043717
• Paraguay, Law 6380 of 2019 (BACN): https://www.bacn.gov.py/leyes-paraguayas/9087/ley-n-6380-de-modernizacion-y-simplificacion-del-sistema-tributario-nacional
• Panama, Fiscal Code, Article 694 (DGI): https://dgi.mef.gob.pa/

Verified on 22 October 2026.

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