Tax residency for remote founders: how the rules work (2026)

The short answer

Tax residency is decided country by country, using each country's own law, and leaving a country doesn't automatically end it. A remote founder can be resident at home, resident where they're living, resident in both, and their company can be resident somewhere else again.

This guide explains how the rules work, with official examples from Australia, the UK, the US and Canada, plus the treaty tie-breakers and company rules that sit on top. It doesn't tell you what your status is. Only the facts of your situation, tested against each country's law, can do that, and that's a job for a cross-border tax adviser.

What tax residency is, and why "I don't live anywhere" doesn't end it

Tax residency is the status that lets a country tax you as a resident, usually on your worldwide income, and every country sets its own tests for it. There's no global rule that says you become resident where you spend the most days, or that you stop being resident once you've left.

The OECD's Model Tax Convention, a model countries can draw on when they negotiate tax treaties, reflects this. Article 4 defines a resident as a person who, "under the laws of that State", is liable to tax there because of domicile, residence, place of management or a similar criterion. Each country writes those laws itself.

That has three consequences for founders who move around:

• You can stay resident at home after leaving. Many tests look at ties (home, family, assets, business) rather than just days.
• You can be resident in two countries. Each applies its own law, and nothing stops both from saying yes.
• "Nowhere" isn't a status a country grants you. Not meeting a new country's test doesn't mean you've stopped meeting your old one.

The Australian Taxation Office gives a clear example. Under its domicile test, you aren't treated as having a permanent place of abode outside Australia if you "have no fixed or habitual place of abode overseas but move from one country to another". The ATO's private wealth guidance also warns that long-term residents who lodge as non-residents while overseas may still be residents if "their facts and circumstances don't sufficiently demonstrate the cessation of their Australian tax residency".

How four countries test residency

Each country below uses a different mix of days, homes and ties, which is why the same travel pattern can produce different answers. These are short summaries of official guidance, not the full law.

Australia

Australia's primary test is whether you reside there, and if you don't, you can still be resident under one of three statutory tests. The ATO's tax residency page lists them: the resides test, the domicile test, the 183-day test and the Commonwealth superannuation test.

• Resides test. The ATO's resides test page lists the factors it may consider: physical presence, intention or purpose, behaviour while in Australia, family and business or employment ties, where your assets are, and social and living arrangements. It also says "maintaining a place of residence isn't the same as actually residing in that place".
• Domicile test. You're resident if your domicile is in Australia, unless the Commissioner is satisfied your permanent place of abode is outside Australia. Factors include how long you intend to stay and actually stay overseas, whether you have an established home there, whether you keep a residence in Australia, and family and financial ties.
• 183-day test. The ATO's 183-day test page treats you as resident if you're in Australia for more than half the income year, unless your usual place of abode is outside Australia and you have no intention to take up residence there. It counts the income year, not the calendar year, and arrival and departure days count.

Residents declare income earned in Australia and overseas, and may get a foreign income tax offset for foreign tax paid, according to the ATO's resident page. Leaving also has a capital gains consequence: when you stop being resident, the ATO says you're taken to have disposed of CGT assets for their market value, with an option to disregard those gains and losses instead.

United Kingdom

The UK uses the Statutory Residence Test, and you're UK resident if you meet an automatic UK test or the sufficient ties test and don't meet an automatic overseas test. GOV.UK's residence page sets out the tests for a tax year running from 6 April to 5 April:

• Automatic UK tests include spending 183 or more days in the UK in the tax year, or your only home being in the UK for 91 days or more in a row while you visit or stay in it for at least 30 days of the year.
• Automatic overseas tests include spending fewer than 16 days in the UK (or 46 days if you weren't UK resident in the 3 previous tax years), or working abroad full-time, averaging at least 35 hours a week, with fewer than 91 days in the UK, of which no more than 30 were spent working.
• Sufficient ties test. If neither automatic test settles it, HMRC's RDR3 notes compare your UK days with your UK ties: family, accommodation, work, 90-day and (for people resident in any of the previous 3 years) a country tie.

The ties test matters for founders who leave. For someone who was UK resident in one of the 3 previous years, the RDR3 tables show that 16 to 45 days in the UK needs at least 4 ties to make you resident, while over 120 days needs just 1.

United States

The US taxes its citizens on worldwide income wherever they live, so moving abroad doesn't end US filing. The IRS page on citizens and resident aliens abroad says you're "subject to tax on worldwide income from all sources", with an automatic 2-month extension to file if you live abroad.

The foreign earned income exclusion can reduce that tax. To qualify you need foreign earned income, a tax home in a foreign country, and either bona fide residence abroad for an uninterrupted period that includes a whole tax year, or physical presence in a foreign country for at least 330 full days in any 12 consecutive months. The IRS says you don't have a foreign tax home if your abode remains in the US.

Two limits matter for founders. The maximum exclusion is US$130,000 for 2025 and US$132,900 per person for 2026. And while self-employed people can claim it, the IRS says the exclusion "will not reduce your self-employment tax". You only get it by filing a return.

Canada

Canada decides residency mainly on residential ties, looking at all the relevant facts. The Canada Revenue Agency's residency page says the most important factor is whether you keep or set up significant residential ties: a home, a spouse or common-law partner, or dependants in Canada.

Secondary ties can also count, such as a car or furniture in Canada, Canadian bank accounts or credit cards, a Canadian driver's licence and provincial health insurance. Someone who leaves but keeps residential ties may be a factual resident. Someone without significant ties who stays in Canada for 183 or more days in the year is a deemed resident. The CRA points people leaving Canada to Form NR73 if they want its official view of their status.

When two countries both claim you: tax treaties and tie-breakers

If two countries both treat you as resident and they have a tax treaty, the treaty's tie-breaker decides which one counts as your residence for treaty purposes. Article 4 of the OECD Model sets out a tie-breaker for individuals that runs through these tests in order and stops at the first one that gives a single answer:

1. Permanent home. You're resident only where you have a permanent home available to you.
2. Centre of vital interests. If you have a permanent home in both, it's the country your personal and economic relations are closer to.
3. Habitual abode. If that can't be decided, or you have no permanent home in either, it's where you have an habitual abode.
4. Nationality. If you have an habitual abode in both or neither, it's the country you're a national of.
5. Mutual agreement. If you're a national of both or neither, the two tax authorities settle it between them.

A few things trip people up. The tie-breaker only works between two countries that have a treaty with each other. Real treaties are negotiated pair by pair, and the OECD Commentary itself offers countries alternative wording, so a specific treaty can differ from the Model. Treaty residence can also carry its own status at home: Canada's guidance treats a factual resident who's also considered resident in a treaty country as a deemed non-resident, with the same rules as non-residents.

The OECD's summary of the 2025 update lists no change to Article 4, so the tie-breaker order above still reflects the Model.

Your company is a separate question

Where your company is resident, and where it has a taxable presence, are tested separately from your own residency. Founders often sort out their personal position and forget the company has its own.

Where the company is resident

A company can be resident where it's incorporated and also where it's managed and controlled. The ATO's tax residency guidance says a company is an Australian resident if it's incorporated in Australia, or if it carries on business in Australia and has either its central management and control in Australia or its voting power controlled by Australian resident shareholders.

The UK takes a similar approach. HMRC's company residence overview says a company is UK resident if it's incorporated in the UK (with some exceptions) or if the central management and control of its business is in the UK. If a treaty tie-breaker awards residence to the other country, HMRC treats the company as not resident for UK tax purposes.

For companies resident in two countries, Article 4(3) of the 2017 OECD Model has the two tax authorities try to agree, "having regard to its place of effective management", where it was incorporated and other factors. The OECD Commentary notes that some countries still prefer the older rule, which simply made the company resident where its place of effective management is. For a founder who makes every big decision from a laptop, the question to ask is where those decisions are actually made.

Permanent establishment when you work from another country

Working from another country can create a permanent establishment there, a taxable presence for your company even if it's resident elsewhere. Article 5 of the OECD Model defines a permanent establishment as "a fixed place of business through which the business of an enterprise is wholly or partly carried on", and lists a place of management and an office as examples.

The OECD's 2025 update added Commentary on when a home can be a place of business. It says a home would generally not be a place of business if the individual worked there for less than 50 per cent of their total working time for the enterprise over any twelve-month period. At 50 per cent or more, it depends on the facts and circumstances, with a "prominent consideration" being whether there's a commercial reason for the work to happen in that country.

The Commentary is framed around an individual working for an enterprise, with an employee as its example. A founder who owns and runs the company raises extra questions, such as whether the place you work from is also where the company is managed. It's also Commentary on a model treaty rather than any one country's law, and not every pair of countries has a treaty. Treat it as a reason to ask an adviser, not as a safe harbour.

Controlled foreign company rules

If you're resident somewhere with controlled foreign company (CFC) rules, that country may tax you on your foreign company's income even when it isn't paid out. The ATO's attributed foreign income page says your share of a CFC's specified income and gains is included in your assessable income "even if you did not receive a distribution from the CFC". Our guide to a US LLC for non-US founders covers the CFC basics in more detail.

Visas don't decide tax

A visa decides whether you can live and work somewhere; tax residency is decided by tax law. The ATO states its residency tests "are not the same as residency tests used by other Australian agencies for other purposes, such as immigration".

None of the four tests above turns on what visa you hold. They look at days, homes, family, assets and business ties. So holding a digital nomad visa doesn't settle whether you're tax resident in that country, and it doesn't end your residency anywhere else. Ask the country's tax authority or an adviser how its own tests apply to visa holders.

Our guide to digital nomad visas for founders covers which visas let you run your own company. For Bali specifically, Bali Startup & Tech covers living and building there.

Records to keep

Good records are what let you and an adviser test your position against each country's rules, and they're much harder to rebuild later. Keep these from the day you start moving:

• Days in each country. A dated log of where you slept each night, backed by passport stamps, boarding passes and accommodation bookings. Australia counts arrival and departure days, so check how each other country counts a day.
• Homes. Leases, title, who lives in each home, and whether a home was available to you while you were away.
• Ties. Where your partner and children live, bank accounts, cars, health cover, driver's licences, club memberships and voting enrolment.
• Where the company is managed. Board and shareholder minutes with the place and date of each meeting, where you were when you signed major contracts, and who makes decisions.
• Where work is done. A rough split of your working time by country over each twelve-month period, which matters for permanent establishment.
• Tax filings and correspondence. Returns in every country, residency certificates, and any official determinations you've requested, such as Canada's Form NR73.

Questions to take to a cross-border tax adviser

A good adviser will want your records and will ask about more than one country. Take these questions, and ask for the answer in writing:

1. Under each country's domestic law, am I resident in my home country, my current country, or both, for this year and next?
2. If I'm resident in two countries, is there a treaty between them, and how does its tie-breaker apply to my home, family and habitual abode?
3. What happens to my assets when I stop being resident at home, such as Australia's deemed disposal at market value, and should I make any election?
4. Where is my company resident, based on where it's incorporated and where its central management and control or effective management actually sits?
5. Could my working from this country create a permanent establishment for my company, given the 2025 OECD Commentary and the specific treaty?
6. Do CFC rules in my country of residence attribute the company's income to me?
7. If I'm a US citizen, do I qualify for the foreign earned income exclusion or another relief, and what self-employment tax still applies?
8. What do I need to file, and by when, in every country involved, including the years I arrive and leave?
9. What records do you want me to keep, and how should I document where company decisions are made?
10. What would change your answer, such as more days somewhere, buying a home, or my partner moving?

To compare notes on finding a good cross-border adviser with other founders, request an invite to Remote Builders.

Common mistakes

Most residency problems come from assumptions that sound reasonable but don't match how the rules work.

• Assuming that leaving ends residency. The ATO, HMRC and CRA tests all look at ties you keep, not just where you are today.
• Treating 183 days as the only rule. It's one test among several, and you can be resident with fewer days.
• Believing you can be resident nowhere. Moving between countries without a fixed home overseas doesn't stop Australia's domicile test applying, for example.
• Relying on a visa. Immigration status and tax residency are separate tests.
• Forgetting the company. Your company can be resident, or have a permanent establishment, where you manage it from, regardless of where it was incorporated.
• Ignoring CFC rules. An offshore company's income can be attributed to you in your country of residence even if you never take it out.
• Assuming the US exclusion covers everything. It's capped, it needs a return, and it doesn't reduce self-employment tax.
• Not keeping records. Without day counts and minutes, you can't show a tax authority where you lived or where the company was run.
• Taking a treaty for granted. Tie-breakers only apply between countries with a treaty, and each treaty's wording can differ from the OECD Model.