A permanent establishment is a fixed place of business through which an enterprise carries on business in a country, or a dependent agent habitually concluding contracts there. Tax treaties use the concept to decide when one country may tax a foreign company's business profits.
Why does Permanent establishment matter for founders?
Running a US LLC from your home country can create a permanent establishment there, giving your own country taxing rights over the company's profits. Where you actually manage the business often matters more than where it is registered.
Where can I read more about Permanent establishment?
Note: A plain-English definition for orientation, not legal or tax advice. Rules change - last checked 2026-07-21.