Leaving Germany: What founders need to know about relocating to Portugal, UAE, or the USA

Last updated: July 2026 · Giulia Uggias-Sproß, German Tax Advisor (Steuerberaterin, M.A. Taxation)

For German founders with substantial GmbH ownership, leaving Germany triggers one of the most expensive tax events of their career. The exit tax under § 6 AStG treats relocation as if shares had been sold, even when no money has changed hands.

In brief

• From 1 % ownership in a capital company, the German exit tax applies — even without a sale (§ 6 AStG)
• Tax is charged on a deemed disposal at fair market value — a liability without matching liquidity
• On application, payable in seven interest-free annual instalments, generally against security — uniform for EU/EEA and third countries
• Returning to German tax residency within seven years eliminates the exit tax retroactively
• Lead time: 12–24 months without a holding structure; three to seven years with one

This article covers what founders need to know when relocating to Portugal, the United Arab Emirates, or the United States – based on current 2026 German tax law, the new Portugal NHR 2.0 regime, and recent updates to the German Foreign Tax Act.

When does the German exit tax apply — and how is it calculated?

A founder holding at least one percent of a capital company (within the last five years), who was subject to unlimited tax liability for at least seven of the last twelve years, is treated as if the shares had been sold at fair market value — without an actual sale and without any liquidity.

Worked example (simplified)

A founder holds 10 % of her GmbH, fair market value of the shares €5,000,000, original acquisition cost €25,000.

• Deemed capital gain: ≈ €4,975,000
• Taxed under the partial-income method (60 % taxable): ≈ €2,985,000 taxable
• At a top rate of 45 %: ≈ €1,343,000 exit tax — due even though no shares were sold
• On application, in seven interest-free annual instalments: ≈ €192,000 per year, generally against security

Simplified example without solidarity surcharge or church tax; the individual case can differ considerably. Not tax advice — we review your specific situation.

Two mechanisms mitigate the burden since the 2022 reform:

• Instalments: on application, seven equal annual instalments – interest-free, generally against security. Uniform, regardless of destination (EU/EEA or a third country such as the USA, UAE, UK, Switzerland). The former indefinite, interest-free EU/EEA deferral no longer exists.
• Return rule: if the founder returns to German tax residency within seven years – extendable on application up to twelve – the exit tax is eliminated retroactively, provided the shares were not sold.

Portugal: what does the NHR 2.0 regime offer since 2024?

Portugal was for years the favourite destination for German founders. The old Non-Habitual Resident regime offered very favourable taxation of foreign income and crypto gains for ten years. In October 2023 Portugal fundamentally reformed it; since 2024 the new “Incentivized Tax Status Regime for Scientific Research and Innovation” (NHR 2.0) applies, with similar benefits but stricter conditions.

• Crypto gains: since the 2023 budget, taxable if held under one year (typically 28 %); after at least one year generally tax-free for private investors.
• Foreign dividends: under certain conditions still tax-free, provided the source state has a treaty with Portugal.
• Self-employment: a flat 20 percent rate, provided the activity falls within a defined occupation.

Practical consequence: Portugal remains attractive, but no longer for every founder – anyone mainly looking to realise crypto gains should examine other locations.

United Arab Emirates: zero income tax — but what are the risks?

The UAE still has no personal income tax for individuals. That makes Dubai and Abu Dhabi attractive for wealthy founders, particularly crypto investors and exit-ready founders. Three points are decisive:

• No treaty any more: since 1 January 2022 there is no Germany–UAE tax treaty – the previous one expired at the end of 2021 and was not renewed. German domestic law alone applies, including extended limited liability under § 2 AStG.
• Local substance: anyone who formally moves to Dubai but effectively keeps operating from Germany (for instance with a home office in Germany on more than 90 days a year) risks continuing to be treated as tax resident in Germany. UAE residence alone is not enough – 183 days of actual presence per year with a documented local lifestyle is recommended.
• Corporate tax: since 2023 the UAE levies 9 percent above an annual profit of AED 375,000 (around €95,000).

The exit tax under § 6 AStG applies in full; on application it can be paid in seven interest-free annual instalments, generally against security.

USA: why citizenship decides your tax liability

Tech founders often move to the USA, frequently to San Francisco, Austin or Miami. Two features distinguish the American system fundamentally from European models:

• Taxation by citizenship, not primarily by residence. A German founder who receives a Green Card immediately falls into full US taxation on worldwide income – even after later leaving the USA, until the Green Card is formally surrendered (exit tax under Section 877A IRC).
• 183-day rule / Substantial Presence Test: anyone living in the USA for more than 183 days a year, or meeting the test, is a US tax resident taxed on worldwide income.

Before the move, the exit tax under § 6 AStG applies; it can be paid in seven interest-free annual instalments, generally against security. After the move, US federal tax (up to 37 percent), state tax (zero in Texas and Florida, up to 13.3 percent in California) and social security are added – the effective burden can be 40 percent or more, so not necessarily lower than Germany. The Germany–USA treaty also contains a Saving Clause that almost always secures the USA's right to tax worldwide income.

Portugal, UAE and the USA compared

• Personal income tax: Portugal 20 % flat-tax (defined occupations); UAE 0 %; USA up to 37 % federal plus state.
• Crypto gains: Portugal taxable if held under 1 year (≈ 28 %), usually tax-free after ≥ 1 year; UAE 0 %; USA up to 20 %.
• Exit tax deferral: seven annual instalments, interest-free, usually against security (uniform for EU/EEA and third countries).
• Residency substance: Portugal and UAE 183 days plus housing; USA Substantial Presence Test.
• Treaty complexity: Portugal medium; UAE complex; USA high (Saving Clause).

Frequently asked questions

At what shareholding level does the exit tax apply?

At one percent ownership in a capital company within the last five years (§ 17 EStG). § 6 AStG has no additional value threshold; founders regularly meet the one-percent mark.

What happens if I transfer my shares into a holding before leaving?

Transferring into a German holding GmbH generally triggers the exit tax. But as a German tax resident, the founder remains taxable on future capital gains via § 8b KStG at around 1.5 percent effective tax. Restructuring three to seven years before an exit yields the greatest benefit.

How long should preparation take?

Without holding restructuring: 12 to 24 months. With holding setup: three to seven years. Anyone calling a week before the move can only process the exit tax, no longer optimise it.

Can I return after seven years without the tax?

Yes. If you become subject to unlimited tax liability in Germany again within seven years of leaving, the exit tax is eliminated retroactively – provided the shares were not sold in the meantime.

Conclusion

Founders who structure years before relocating save six- to seven-figure amounts compared with a last-minute attempt. In a complimentary initial consultation, we clarify when you should become structurally active – in German, English, Russian, and Italian.