.webp)
In an increasingly interconnected world, wealth no longer has borders — but taxation still does. Every investor, entrepreneur, or expatriate must answer a deceptively simple question: “Where am I legally resident for tax purposes?”
The answer determines which country can tax your income, how your investments are treated, and whether you risk double taxation.
For individuals with global assets or multiple homes, the rules can seem opaque. Yet, the criteria are not arbitrary — they are defined by international tax treaties, guided by the OECD Model Convention and applied consistently across more than 3,000 bilateral agreements worldwide.
This article unpacks those rules, explaining how residency is determined under tax treaties, why it matters for investors and entrepreneurs, and how SBH Capital Partners structures compliant fiscal residency in Saint-Barthélemy, ensuring full tax neutrality within the framework of international law.
In domestic law, residency defines which jurisdiction has primary taxation rights over your income and capital gains.
Every country applies its own rules — often based on one or more of the following:
However, when two countries claim you as resident, a tax treaty intervenes to determine which one prevails.
Bilateral tax treaties — based on the OECD Model Tax Convention (Article 4) — exist to:
Without such treaties, global investors risk being taxed twice — once in their home country and again in the country where the income arises.
Your tax residency acts as a legal anchor for all other fiscal concepts:
In short, your residency is your fiscal identity. Without clarity, your assets float in a grey zone of uncertainty.
When two jurisdictions claim you as a tax resident, Article 4 of the OECD Model Convention provides a step-by-step hierarchy — the famous “tie-breaker” tests — to identify your single, legitimate residence.
“An individual shall be deemed to be a resident only of the State in which he has a permanent home available to him.”
A permanent home doesn’t need to be owned — but it must be available continuously. The presence of a primary dwelling (even rented long-term) can be decisive.
If you have homes in both countries, the next test examines where your personal and economic relations are closer — where your “center of vital interests” lies.
Authorities analyze:
It’s not just where you sleep — it’s where you live economically and emotionally.
If your vital interests can’t be clearly identified, the next factor is where you habitually reside — the country where you spend most of your time during the year.
If your habitual abode remains unclear, your nationality determines residency. This rarely applies but can be decisive for “digital nomads” or frequent travelers.
If none of the above clarifies residency, both countries’ tax authorities can negotiate under a Mutual Agreement Procedure, based on documentation and substance.
This hierarchy ensures that each individual has one single tax residence for treaty purposes — not two.
For corporations, the OECD defines residency based on the place of effective management — the location where key business decisions are made.
This includes:
If these occur in different jurisdictions, tax authorities may requalify the company’s residence — and retroactively tax profits.
A “registered office” alone is no longer sufficient. To be legally resident, a company must have real substance, including:
This is the principle underlying SBH Capital Partners’ management framework: ensuring that all governance occurs within Saint-Barthélemy, thereby establishing indisputable fiscal residency.
Tax treaties prevent overlapping claims through two main methods:
Residency determines which method applies — hence, choosing the correct jurisdiction is critical.
Residents of treaty countries often enjoy lower withholding tax rates on dividends, interest, and royalties.
For example, a resident of France investing in a treaty partner like Singapore may pay 10% instead of 25% withholding.
Without recognized residency, these advantages vanish.
Operating within treaty frameworks signals legitimacy. Jurisdictions recognized under OECD standards — such as Saint-Barthélemy — are transparent, cooperative, and fully compliant.
This avoids reputational risk, blocked bank transfers, or classification as an “offshore” entity.
Saint-Barthélemy is a French Overseas Collectivity under Article 74 of the French Constitution. It applies French civil law but operates under its own fiscal sovereignty.
This creates a rare balance:
In practical terms:
As part of France, Saint-Barthélemy indirectly benefits from France’s extensive network of double taxation treaties.
While not all apply automatically, investors gain the same legal credibility and banking acceptance as any French entity.
This gives Saint-Barthélemy residents the best of both worlds:
SBH Capital Partners ensures that every client’s structure meets residency criteria:
This guarantees that both individual and corporate residency are defensible under any tax treaty.
Whether personal or corporate, substance — physical presence, governance, and integration — is the key to establishing legal residency under treaty law.
A passport does not define residency; activity and evidence do.
Hybrid or undeclared residencies invite scrutiny. Maintaining two homes, mixed bank accounts, or remote company control creates ambiguity.
Under the CRS, this ambiguity can result in data being sent to multiple jurisdictions, increasing exposure.
At SBH Capital Partners, we help clients:
This transforms residency from a vulnerability into a strategic asset — one that protects wealth, credibility, and freedom.
Tax treaties are the world’s legal map of fiscal belonging. They determine who has the right to tax you, who must respect your exemptions, and where your wealth truly resides.
In a transparent, post-BEPS world, residency is not a loophole — it’s a legal position backed by documentation, substance, and strategy.
By establishing clear, compliant residency in Saint-Barthélemy, investors enjoy:
With SBH Capital Partners, residency becomes more than a status — it becomes the foundation of lasting, lawful sovereignty.
Because in international taxation, your greatest asset is not your wealth.
It’s where your wealth resides legally.
1. What defines tax residency under international law?
Physical presence, permanent home, economic ties, and habitual abode — as defined by Article 4 of the OECD Model Convention.
2. What happens if two countries claim me as a resident?
Tax treaties apply “tie-breaker” rules: permanent home → vital interests → habitual abode → nationality → mutual agreement.
3. How is company residency determined?
By the “place of effective management” — where strategic and financial decisions are actually made.
4. Does Saint-Barthélemy have double taxation treaties?
It operates under French sovereignty, benefiting from France’s legal framework and global recognition, though with its own tax system.
5. How does SBH Capital Partners ensure compliant residency?
Through local management, substance creation, and governance in Saint-Barthélemy — ensuring recognition under any tax treaty.
Discretion, compliance, and excellence in Saint-Barthélemy.
Fill out the form below to access a private consultation with our expert team.
.jpeg)
