Regarding Malt and IT consulting: is your business really structured in the right place?
Summary
Introduction
You've built a solid profile on Malt, with client recommendations and a daily rate that's been improving year after year. Your business is smooth, largely remote, and your projects are negotiated in just a few exchanges. The question that almost no one asks at this stage is, however, the most crucial over the next ten years: is your business structured in the right place?
Being structured doesn't necessarily mean being registered somewhere. It means that the place where you live, the place where you actually work, the place where your company is run, and the place where you are taxed form a coherent whole . For the majority of independent IT consultants registered on Malt, these four points coincide by default with France, without this choice ever having been made consciously.
This isn't a problem in itself. It becomes one when revenue crosses a certain threshold, when customers are no longer exclusively French, or when mobility becomes a reality rather than just an intention. From that point on, the default structure becomes expensive and, more insidiously, locks you into options you won't be able to afford to access later.
This article addresses the question posed by the title directly: how to know if your IT consulting activity on Malt is registered in the right place, what warning signs should alert you, and which jurisdictions warrant investigation if the answer is no. We detail the legal criteria, the specific constraints of freelancing platforms, and the verification method we apply at Coreway Consulting.
What your Malt profile says about your structure
A platform like Malt facilitates the matching of client needs with skills. It doesn't ask any questions about your residence, applicable tax treaty, or the location of your effective management. The profile displays a city, a daily rate, and skills, and this city has no legal standing . Many consultants mistakenly conclude from this that the issue doesn't exist.
What your profile reveals, however, is the degree to which your work is digitalized. If your last three projects were carried out entirely remotely, if your deliverables are submitted via a Git repository and your meetings are conducted by videoconference, then nothing in your output is physically tied to France . You are already engaged in a business that can be outsourced, which is not the case for a craftsman or a local firm.
It is precisely this characteristic that opens up a range of possibilities, and it is also what attracts the attention of the administration when an expatriation is poorly planned. An activity that is easily relocated on paper must actually be relocated in practice to be recognized as such. The difference between the two situations lies in the practical details that we will discuss later.
Finally, the platform neither protects nor restricts you. It applies the billing rules of the country of establishment you declare, meaning that the responsibility for consistency rests entirely with you . An active Malt profile from a poorly structured foreign entity remains an active Malt profile: no one will alert you.
Where is your business actually located?
The answer lies neither in your legal status nor in the address of your registered office. French tax law is based on facts, and it always begins with the same question: where is your personal tax residence? Until this point is resolved, any consideration of the company is premature .
The four criteria that determine your tax residence
Article 4 B of the French General Tax Code sets out four alternative criteria, and only one is needed to establish your connection to France. Your home, meaning your family's usual place of residence, takes precedence over all others. Next come your principal residence, the place where you carry out your main professional activity, and the center of your economic interests .
A consultant who rents an apartment in Lisbon but whose partner and children remain in school in Lyon maintains their primary residence in France. The fact that they spend two hundred days outside of France makes no difference, because the criteria are not cumulative: they are applied in a strict hierarchical order . This mechanism is the main source of the tax adjustments we see for self-employed individuals who travel alone.
When two countries simultaneously claim your tax residence , the bilateral tax treaty determines the outcome according to a tie-breaker sequence: permanent home, center of vital interests, habitual residence, and nationality. This sequence is the only one that matters in the event of an audit , and it is prepared by gathering material evidence from the first year onward.
The 183-day test is never sufficient on its own
The 183-day rule is the most frequently cited but also the least protective. It only applies to the primary residence, which is the second criterion, and does not disregard a household that has remained in France . Therefore, a favorable count of days does not guarantee protection if your family and financial situation has remained unchanged.
We recommend thinking in reverse: rather than counting the days spent outside France, count the ties maintained in France. A primary residence, active bank accounts, corporate mandates, insurance policies, and subscriptions form a whole, and it is this whole that the tax authorities reconstruct .
The billing location is not the place of business.
Issuing an invoice from a foreign entity does not transfer your business activity. If you continue to provide your services from your French office, the tax authorities will consider that the activity is carried out in France and may classify it as a permanent establishment, or even apply Article 155 A of the French General Tax Code. This article allows for the reintegration into French taxable income of sums invoiced by a foreign entity when the service is provided by a person domiciled in France.
This confusion between invoicing and business practice remains the most frequent mistake among digital freelancers. It is all the more tempting since the platform itself perfectly accepts a foreign entity. We already addressed this when detailing the seven questions to decide before creating a company abroad , and it bears repeating: registration comes last .
Invoice from abroad while staying on Malt
The question comes up invariably in meetings: can you remain active on Malt while based outside of France? The answer is yes in principle, but with operational consequences that must be assessed before relocating. The platform itself isn't a legal obstacle, but it does alter the invoicing process as soon as your entity changes countries.
What a European entity changes
If your business is established in another EU member state, providing services to a French business client falls under the intra-Community B2B regime. The invoice is issued excluding VAT, and the French client self-assesses the VAT, which requires a valid intra-Community VAT number and a properly completed European services declaration . Portugal, Malta, Cyprus, and Ireland all operate under this system.
The practical consequence is neutral for the client, who pays neither more nor less. However, it is visible in their accounting, and some large companies or mid-sized IT services firms implement purchasing policies restricting suppliers outside of France. This point should be verified before relocating, not after , by consulting your two or three most important clients.
What changes with an entity outside the European Union
With an entity in the Emirates, Mauritius, Georgia, or Panama, the service becomes an export. The invoice is no longer subject to French VAT, and reverse charge still applies for the client, but supplier compliance controls become more stringent . Some clients require proof of the entity's tax residence, evidence of substance, or a renegotiated framework agreement.
Added to this is the issue of financial flows. Depositing euros into an account outside the SEPA zone generates fees and delays, and the client's bank may require additional verification . Jurisdictions offering European banking access or a euro IBAN retain a real operational advantage over more exotic locations.
Finally, the termination of the French contractual relationship is never absolute. You remain subject to French reporting obligations for the year of departure, and any French-source income you may have continues to be taxable in France according to the applicable tax treaty. The termination is gradual and documented , never instantaneous.
At what income level does the question become critical?
There is no legal threshold that triggers expatriation. However, there is an economic threshold beyond which the cost of the foreign structure becomes marginal compared to the tax difference. For IT consultants, this tipping point is generally between €120,000 and €150,000 in annual revenue , including all overhead and compliance costs.
Below this threshold, the benefits rarely remain favorable. The costs of incorporation, local accounting, registered office services, travel, and double tax advice absorb most of the theoretical gain. A consultant with €90,000 in revenue who relocates abroad solely for tax reasons often recovers less than anticipated , while also assuming a long-term burden of complexity.
Above €200,000, the arbitrage takes on a different nature. The difference between a French marginal tax rate plus social security contributions and a corporate tax rate of 9% in the UAE, 12.5% in Cyprus, or 15% in Georgia becomes an absolute sum that justifies strategic planning. This is also the threshold at which exit taxes apply if you hold significant company shares.
One final point deserves mention. The exit tax provision in Article 167 bis applies when the value of shareholdings exceeds €800,000 or 50% of the company's profits, and it targets unrealized capital gains. For a consultant whose company has been accumulating capital for several financial years, this threshold is reached more quickly than one might think .
Compare jurisdictions without limiting yourself to the rate
The natural reflex is to rank destinations by decreasing tax rate. This is the worst criterion on its own, because a zero tax rate combined with an impossible-to-maintain substance creates a risk, not a saving . Four parameters matter more to an IT consultant on Malt.
The first is the smooth flow of euro transactions, since your clients pay in euros from French banks. The second is the existence of a tax treaty with France, which ensures the elimination of double taxation and provides the procedure for resolving disputes. The third is the actual level of physical presence required , and the fourth is the taxation of the sums you subsequently distribute to yourself.
The table below summarizes the tax regimes of seven commonly studied jurisdictions. The rates shown are the statutory public rates in force, excluding special regimes and individual circumstances. They constitute a starting point for analysis and not a recommendation .
Jurisdiction | Corporate tax | Distributions to the executive | Euro banking access | Local presence expected |
Portugal | 20% (initial reduced rate) | IRS tax scale, possible withholding | Full SEPA Zone | Substantial actual stay |
Andorra | 10% | IRPF capped at 10% | Good, outside the standard SEPA zone | Controlled effective residence |
Georgia | 15% on distribution | Favorable local regime | Correct, outside of SEPA | Moderate presence |
Panama | 25%, strict territoriality | Untaxed foreign income | Enhanced formalities | Attendance to be organized |
Bahamas | No tax on profits | No local taxes | Limited access to Europe | A substance that is difficult to hold |
United Arab Emirates | 9% above the threshold | No personal taxation | Okay, outside the SEPA zone | Physical presence required |
Cyprus | 12.5% | Non-dom regime applicable | Full SEPA Zone | Local effective management |
Two key lessons emerge from this comparison. Zero-interest jurisdictions like the Bahamas are rarely suitable for consultants whose clients are European, due to the lack of seamless banking access and protective tax treaties. Conversely, Portugal and Cyprus offer a comfortable European framework, but at the cost of a truly restrictive physical presence .
Territorial tax regimes occupy an often misunderstood intermediate position. Panama does not tax foreign-sourced income, which is theoretically ideal for a business serving French clients, but the foreign source must be documented contract by contract. Without this documentation, the advantage becomes a risk upon the first audit.
Economic substance, the dividing line
Economic substance refers to all the tangible evidence proving that your company actually operates where it is registered. This is the central concept of the OECD's BEPS program, incorporated into national legislation and European anti-abuse measures. For an IT consultant, this is the only area where the security of the structure is at stake .
What the substance actually covers
A fully occupied office, distinct from a simple mailing address, is the first indicator. Next come management decisions made on-site and documented, a regularly active local bank account, locally signed contracts, and, depending on the size of the business, one or more employees in the area . A physical address and a business registration have long since ceased to be sufficient.
For a self-employed individual, substance rests primarily on the person. You must be able to prove that you live, make decisions, and produce from the chosen jurisdiction, through utility bills, a lease, telecommunications statements, consistent airline tickets, and local banking activity. This accumulation of evidence is built from the first month and can never be rebuilt afterward.
Why some jurisdictions are more demanding
The countries with the lowest rates are also those under the most international pressure. The Emirates introduced a corporate tax and economic substance rules precisely to get off watch lists, and Andorra conducts regular checks on actual residence. The advertised rate has an administrative cost , and that cost is paid in practice.
Conversely, the automatic exchange of information under the CRS standard renders any strategy based on banking discretion illusory. Your foreign accounts are reported to the authorities of your declared country of residence, and any discrepancy between declarations and transactions is automatically detected . Security now stems from consistency, never from opacity.
The four risks of a poorly placed structure
A business structured in the wrong place doesn't trigger an immediate alert. The risk materializes two to five years later, during an audit, a sale, or a simple desk review triggered by a discrepancy in reporting. Four mechanisms are frequently encountered, and none constitute outright fraud .
The first issue is the challenge to the change of residence. The tax authorities demonstrate that the household remained in France, reinstate all worldwide income, and apply late payment interest. When the departure appears artificial, a penalty for deliberate non-compliance may be added , transforming an expected gain into a net loss.
The second mechanism is the classification of a permanent establishment in France. If you maintain an office, company housing, or a regular business presence, the foreign company becomes taxable in France on the profits attributable to this fixed establishment. The third mechanism, Article 155 A, allows you to be taxed directly in your country on the amounts invoiced by the foreign entity when you personally provide the service.
The fourth is abuse of law, now extended to arrangements primarily aimed at tax avoidance. A foreign company with no employees, no premises, and no local decision-making authority, whose sole function is to collect fees generated in France, falls squarely within this scope. The countermeasure is not legal but factual: the establishment of the business must be genuine .
Verify that you are in the right place
The verification process consists of five self-assessments before any appointment. The first involves writing, in one sentence, where you actually live, where your family lives, and where your primary residence is located. If this sentence refers to France, your tax residence is French , and no foreign entity will change this.
The second examination concerns the place of production. Count, over the last twelve months, the number of billable days physically worked outside of France. A ratio of less than half makes any relocation risky, while a ratio of more than eighty percent opens up a real area for reflection .
The third examination concerns your clients. Identify the proportion of your revenue generated with French clients, and check with your two largest clients whether their purchasing policy allows for foreign suppliers. The fourth concerns your business assets: value your company shares and compare the result to the €800,000 exit tax threshold .
The fifth step is chronological. Relocation is prepared over twelve to eighteen months, with a specific order between the end of French residency, the establishment of the entity, opening a bank account, and the transfer of contracts. Reversing this order weakens the entire case , regardless of the country chosen.
Testimony: A data expert left without checking
A data and machine learning consultant, highly ranked on freelance platforms, contacted us after eighteen months in a low-tax jurisdiction. He was invoicing five French clients from a local entity, with a turnover of nearly €210,000, and considered his situation resolved. His wife and two children had remained in France , where the couple maintained their primary residence.
The diagnosis was swift. The household, as defined in Article 4 B, had never left France, the applicable tax treaty designated France as the primary tie-breaker, and the foreign company had neither an occupied office nor any locally documented decisions. Therefore, all income was taxable in France from day one , including any penalties that may be applied in the event of an audit.
The regularization process was initiated voluntarily, with the filing of missing declarations and the reconstruction of the evidence file. The consultant then developed a coherent plan, this time relocating the family home and choosing a European jurisdiction compatible with his clientele. The cost of this detour was far greater than that of a preliminary study , which remains the most valuable lesson learned from this case.
Frequently Asked Questions
Can I remain registered on Malt while living abroad?
Yes, there's no legal prohibition. Invoicing simply switches to intra-community or export of services, depending on the jurisdiction, with the French client self-assessing the VAT. The key point to be aware of is less the platform itself than the purchasing policies of your clients , which you should verify beforehand.
Should you close your French operation before leaving?
Not necessarily, but keeping it active with operating resources in France creates a permanent establishment risk. The issue is addressed on a case-by-case basis, depending on the assets held within the company, current contracts, and the exit tax schedule. A poorly planned dissolution can trigger avoidable taxation .
Are 183 days enough to change tax residence?
No, and this is the most costly misconception. The household criterion takes precedence over the residency criterion, meaning that a favorable day count does not protect a consultant whose family remains in France. Tax residency is demonstrated by a body of tangible evidence , not by a calendar.
Which jurisdiction is best suited for an IT consultant on Malt?
There is no universal answer, and be wary of those who offer one. A consultant with an exclusively French clientele and European families does not have the same optimal situation as a mobile single person serving international clients. The decisive factors are the actual sustainable presence and banking fluidity , even more so than the advertised rate.
What happens if all my clients remain French?
It's possible and common, but it focuses attention on the location of your production. The more French your clientele, the more you must demonstrate that the service is performed from abroad, through continuous evidence of presence. A French clientele doesn't prohibit anything; it simply raises the level of evidentiary requirements .
How long does it take to properly structure the project?
Allow twelve to eighteen months between the decision and a fully stabilized situation, with the first fiscal year being pivotal. This timeframe covers the change of residence, the incorporation of the entity, the opening of accounts, and the renegotiation of contracts. Trying to speed things up almost always means sacrificing the strength of the supporting documentation .
Key takeaways
A high-performing Malt profile says nothing about the quality of your structure. It only indicates that your business is relocatable, which is an opportunity, not a solution. The question of the right location depends on your actual tax residence, your actual place of production, and the long-term viability of your operations .
The tax rate is the last consideration in this order, after the applicable tax treaty, the availability of euro bank accounts, and the required presence. An IT consultant consistently exceeding €150,000 in revenue has a clear interest in investigating this matter, but this investigation must precede any registration .
You work as an IT consultant on Malt and want to know if your business is structured correctly. You can request a personalized study from Coreway Consulting to compare your situation with the ten jurisdictions we support.
