Term and general definition of ‘foreign country’
The term ‘foreign country’ in jurisprudence as well as in common parlance refers to all states and territories that are outside the sovereign territory of a given state. From a country’s perspective, everything that is not within its own national territory and does not fall under its sovereign authority is considered foreign land. The exact legal definition and its resulting consequences vary depending on the field, legislation, and relevant legal application.
In the European context, a distinction is made between domestic territory, community territory (especially within the European Union), and third countries, whereas national law generally separates domestic and foreign territory.
Legal aspects of the concept of ‘foreign country’
Constitutional significance
In constitutional law, the law distinguishes between the state’s own territory—including mainland, islands, airspace, and territorial waters—and foreign territory as the spatial domain of another sovereign power. Foreign territory thus marks the boundary of national legislation and administrative authority. Exceptions exist, for example, in the case of extraterritorial areas (e.g. diplomatic missions or military bases), which may be counted as foreign territory for private law purposes but are subject to special rules under international law.
Relevance under international law
In international law, the concept of ‘foreign country’ plays a central role. States are obligated to respect the sovereignty of other states; actions by state authorities are, in principle, limited to their own territory. Exceptions arise through international treaties or with the consent of the other state (e.g. law enforcement across borders, military operations, or economic cooperation).
Additionally, international law regulates the treatment of citizens abroad and their legal protection, particularly through consular law and diplomatic relations.
Classification under European law
In the context of European law, the term ‘foreign country’ gains an additional dimension. Within the European Union, the member states are often not regarded as foreign countries in the traditional sense. Rather, the term usually refers to so-called third countries, i.e. states that are not members of the European Union. This differentiation is of crucial importance in numerous fields of law, for example in tax law or residency law.
Impacts and regulations in different areas of law
Considerations under tax law
In tax law, a distinction is made between domestic and foreign matters. Income earned abroad is in part subject to different valuation standards and tax regulations than income generated domestically. Crucial concepts here include the worldwide income principle, double taxation agreements, and the definition of foreign territory for tax purposes under § 2 AO (Fiscal Code).
Key terms in this context include:
- Foreign permanent establishments
- Foreign assets
- Foreign taxpayers and domestic taxpayers
- Capital investments abroad
Double taxation treaties additionally regulate the avoidance of double taxation of income that could potentially be taxed both domestically and abroad.
Criminal law and regulatory consequences
In criminal law, the concept of ‘foreign country’ plays a significant role in terms of crime scenes, prosecution, and international legal assistance. The criminal liability of an act may depend on the location of the act and the perpetrator’s nationality. International agreements (e.g. European Arrest Warrant, legal assistance agreements) regulate mutual support for prosecution across borders.
Administrative law (e.g. in the context of administrative acts or enforcement measures) similarly limits a state’s authority to its own territory. Legal assistance procedures enable the exchange of information and enforcement assistance between states.
Private law and conflict of laws provisions
In international private law (IPL), cases with a foreign element always raise the question of which legal system applies to a cross-border issue. Conflict-of-law rules determine whether the law of the domestic country or that of a specific foreign state is applicable—for example, in matters of family, inheritance, or contract law.
Recognition and enforcement law is also affected: Foreign judgments and public documents must meet certain requirements in order to be legally recognized and enforced in another state.
Residence, migration, and nationality law
In residency law, numerous regulations rely on the concept of foreign territory. This includes, in particular, entry and exit requirements, visa requirements, deportation, extradition, and the regulations governing acquisition and loss of citizenship. Persons staying abroad are subject to special rules regarding registration requirements, passport obligations, and duties to cooperate in nationality law procedures.
Customs and foreign trade law
In the field of foreign trade and customs law, the concept of foreign territory is of central importance. The import and export of goods, services, funds, and technology to or from foreign countries are precisely regulated and subject to numerous licensing, declaration, and control requirements (for example, under the Foreign Trade and Payments Act – AWG – and the Foreign Trade and Payments Regulation – AWV).
Movements of goods between domestic and foreign territory, especially to third countries outside the European single market, are clearly defined under customs law and form the basis for levying customs duties and import turnover tax.
Social security law
Another key area in which the concept of ‘foreign country’ is significant is social security law. Here, the focus is on determining which persons are covered by social security agreements during periods abroad or when working internationally, and how contribution entitlements and benefit eligibility are differentiated between domestic and foreign territory.
Data protection law provisions related to the concept of foreign territory
With the entry into force of the General Data Protection Regulation (GDPR), the concept of foreign territory has gained special significance in the transfer of personal data. Transfers to countries outside the European Economic Area (third countries) are subject to specific requirements, such as additional safeguards, adequacy decisions by the European Commission, and standard contractual data protection clauses.
Summary
The concept of ‘foreign country’ is a central element in many areas of law and entails a wide range of specific provisions, conditions, and exceptions. The precise legal meaning, the resulting rights and obligations, as well as associated practices, depend largely on the particular factual context and the applicable legal regulations. Given its significance in constitutional law, international law, tax and criminal law, private law, and many other areas, careful definition and distinction between domestic and foreign territory forms the basis for legally secure assessment of cross-border matters.
Frequently asked questions
What legal requirements apply when registering a residence abroad?
Anyone intending to permanently move their residence abroad must first observe national deregistration requirements. In Germany, the Federal Registration Act (§ 17 BMG) stipulates that persons must deregister at the citizens’ office within two weeks of moving out if they do not take up a new residence in Germany. Registration in the destination country is governed by its national registration laws, which often require a registration period or additional requirements (such as residence permits, proof of income, etc.). Failure to comply may lead to fines or difficulties in later return or verification procedures. Special rules should also be taken into account for certain professional groups such as students or posted workers.
How is health insurance regulated during long-term stays abroad?
Deregistering one’s residence in Germany generally ends the obligation to be insured under statutory health insurance; however, voluntary insurance may be possible under certain conditions, such as in the case of temporary stays abroad. International agreements, including the EU regulations on social security (especially Regulation (EC) 883/2004), govern entitlements within the EU, EEA, and Switzerland. In third countries, coverage depends on bilateral social security agreements and the terms of the specific health insurance. In many cases, private foreign health insurance is necessary, and its terms and scope should be carefully reviewed.
What should be considered regarding double taxation abroad?
Double taxation occurs when income earned abroad is taxed both in the country of residence and the country of origin. To avoid this, there are numerous bilateral double taxation agreements (DTAs) which usually specify which country has the right to tax certain types of income (e.g. pensions, employment income, capital gains). In Germany, the Foreign Tax Act also sets rules to restrict tax planning options. If there is no DTA, actual double taxation may occur, which should be addressed with the relevant tax office on a case-by-case basis.
What legal considerations apply to child benefit entitlements during stays abroad?
In principle, entitlement to child benefit expires upon permanent departure from Germany (§ 62 (1) EStG), unless unlimited tax liability or sufficient domestic ties (e.g. assignment by a German employer or maintaining a residence in Germany) continue. In EU/EEA states and Switzerland, coordinating social security agreements apply and may allow entitlements under certain conditions, particularly in cases of cross-border employment. There are few exceptions for stays in third countries, such as for development workers or diplomats.
What reporting obligations apply to bank accounts and assets held abroad?
Moving abroad creates extensive reporting requirements to the tax office, especially concerning foreign assets (§ 138 AO, § 2 Foreign Tax Act). Since the introduction of the globally oriented Common Reporting Standard (CRS) in 2018 and EU directives on official and information assistance, banks are also subject to comprehensive automatic reporting requirements for foreign accounts to the respective tax authorities. Violations can lead to substantial fines or criminal consequences. Timely declaration and documentation are essential to avoid unwanted tax or criminal repercussions.
What employment law specifics apply to postings abroad?
When employees are posted abroad, both German law (particularly the Employment Contract Act, Posting Act, and Part-Time and Fixed-Term Employment Act) and the employment provisions of the destination country must be observed. For postings within the EU, the Posting of Workers Directive (EU 2018/957) and its national implementation, which regulate, among other things, minimum wage, maximum working hours, and employee protection, apply. Social security aspects (A1 certificate, applicability of German social security) must also be clarified. Violations can result in fines, liability issues, and problems recognizing and enforcing labor claims.
