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April 12 - April 18, 2018
To thrive in an ever-globalizing world, you must do what others do not do and go where others will not go.
That is the key to making the Nomad Capitalist lifestyle work for you. It is not about running from something, it is about running toward something much, much better.
The real border is in our minds.
When you empower yourself to go where you’re treated best, you get the good parts from every country without the stuff you do not want because you only utilize the corresponding formula each country has to offer without buying into their entire brand.
I live by a different motto: fight for yourself, vote with your feet, and go where you’re treated best.
“Three Flag Theory,” which suggested that those seeking sovereign freedom do three things: Have citizenship somewhere that does not tax income earned outside the country. This was the personal safe haven. Have businesses and investments in stable, low- or no-tax countries. These are called the business havens. Live as a tourist in countries that support your values, rather than society’s. These countries are the lifestyle havens, or ‘playgrounds.’
This approach makes up the heart of the Nomad Capitalist lifestyle and applies the following principles: E - Enhance Your Personal Freedom K - Keep More of Your Money G - Grow Your Money
E - Enhance Your Personal Freedom ● Living Overseas - Whether in one place, a few places, or as a perpetual traveler. ● Second Passports - Obtaining citizenship in another country for better travel, better treatment, and more options. ● Digital Privacy - Hosting your website overseas or using secure offshore email. ● Socializing Overseas - Make friends, dates, or a lifelong partner in another country. ● Personal Happiness - Find the place where you feel totally at home. K - Keep More of Your Money ● Tax Reduction - Legally reduce or eliminate your personal taxes by
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Planting a flag can be as simple as moving your server from the United States, with all of its crazy laws for website owners, to Iceland where privacy is sacrosanct. You can do that in an hour.
Today’s tax savings are tomorrow’s real estate empire or generational wealth. Money saved today will have a snowball effect over time. So too will being geographically diversified when the countries where you have invested hit their stride.
Buffett and his team review a company’s balance sheets before even looking at the stock price. The aim is to determine the true value of the company as if they themselves were running it. Only once a true valuation is determined, Buffett will look at the actual current market valuation on that company.
In this way, these emerging markets are the sovereign equivalent of Tim Ferriss’s concept of geoarbitrage, where companies hire workers in emerging countries, sell their work product back home in the developed world, and pocket the spread. Mark’s goal is to obtain citizenship in several emerging countries in the belief that at least one is likely to hit it big. He realizes the old adage of getting in on the ground floor, and is seeking to get in early on countries that have a lot of potential.
It is all about having the freedom to choose.
While you certainly want to diversify across several countries, it is worth it to take call options on emerging markets. It is possible to become a citizen of and an investor in countries whose history resembles that of Ireland’s, but without having to change your lifestyle or hop on a boat for greener pastures.
what I call Digital Nomad 2.0: businesses that are not only location independent, but government independent as well.
“Colombia still has a unique vibe that makes it a great place to stay,” Rob agreed. “It is fast becoming a hotspot for investors, but at least it hasn’t made it onto the retirement newsletters yet!”
The Expat Strategy is pretty straightforward: settle down in one city in a country different than where you are from. That’s it.
The good news is that countries like Panama will generally allow you to live there and only pay tax on your local income. If you find the right country and create the right plan, you can still live tax-free without playing the perpetual traveler game.
Having multiple base cities simply means that you have homes in different cities, usually relatively far apart so that you can travel to nearby places from each base.
The Base Cities Strategy also allows you to enjoy a lifestyle buffet: the big city, the small town, the beach, and whatever else it is you are after. And, if you choose your countries carefully, you can get second residence permits and eventually passports in return for buying property.
In any given focus city, you know how to get around, know where the best restaurants are, know where to get your dry cleaning done, and know how to get back to the airport without wasting time. You feel at home without having a home there. Then, you simply determine how long you want to spend in each focus city, or group of focus cities, before returning to base. You will never have to deal with the feeling of newness while in your focus city.
No matter what pace you prefer, perpetual travel can work for a number of different people and their various needs. A real estate investor, for example, could spend ten days in a city of interest before moving on to the next. This would allow them the opportunity to scope out the local real estate market before moving on to the next city and the next after that. In the Balkans, for instance, they could move from Belgrade to Kotor to Tirana to Skopje to Ohrid to Pristina to Sarajevo. Once they have covered the region, they could then reset to another part of the world and start over again.
Citizenship often grants exclusive rights within a country. In many Asian countries, this means the ability to invest. In fact, outside of the Americas and Western Europe, most countries restrict foreign ownership of certain businesses, land, and even first floor apartments. If you have a passport, you are able to invest in the best, most profitable areas in a country.
Another reason to obtain a second passport is to gain access to business and other investment opportunities that are unavailable to foreigners. It is not uncommon for Israeli citizens to obtain second citizenships in order to do business in Muslim majority countries.
In other situations, you cannot have access to certain opportunities unless you at least have a second residency in the country.
to get full access to some of the best stock, real estate, and private equity deals, you cannot be a US citizen.
In 2012, Panama unveiled its Friendly Nations Program, which currently allows citizens of fifty countries to become an instant permanent resident by tossing $5,000 into a Panamanian bank account and paying lip service to doing business or investing there. The residence permit requires only one or two days in the country each year to remain active.
If you do not mind roughing it a bit more, the South American nation of Paraguay allows you to become a citizen after three years, with a requirement to spend just one day per year in the country. You will need to learn some Spanish and have knowledge of Paraguayan culture, but that is about it.
While it is possible to obtain second citizenship in European countries like Belgium or Ireland, you will find it far easier and less costly to start the process with places like Serbia, Georgia, Colombia or Armenia. You might scoff at these countries as being subpar, but it is countries of this ‘second tier’ that are often the best hope for an entrepreneur or investor looking to keep costs and obligations to a minimum.
Like anything else in your Nomad Capitalist lifestyle, do not be dogmatic about what constitutes a good or bad passport. Instead, focus on your desired outcome and work backwards to find the best passport to meet that need, rather than getting stuck on one particular option.
Alas, nomads have different ways to answer the question, “Where are you from?” The author Taiye Selasi tells people to ask instead, “Where are you a local?” implying that where you feel at home is really where you are from. Infamous anarchist commentator Jeff Berwick tells people he is ‘from earth’ before explaining the whole deal about how we are all just God’s creatures on one planet.
A child who can legally live, work, and easily do business in multiple countries thanks to multiple citizenships, who speaks multiple languages from growing up in different countries, and who understands different cultures from making friends around the world will be far better equipped to become a success in any area they choose to focus on.
The cost of childbirth in Brazil is as much as 90% less than in the United States. Even prices for plastic surgery are as much as 60% less.
India is building out a $2 billion a year medical industry, supported by two of the top ten hospitals on the planet. The Asian Heart Institute in Mumbai frequently performs among the most complicated cardiology procedures in the world and boasts the lowest heart surgery mortality rate at just 0.26%.
advanced dental clinic I have ever been to was in Bucharest, Romania, and a regular check-up and cleaning cost about $25, complete with advanced images of all of my teeth to check for problem areas. Serbia is also known for affordable dentistry.
When ranked by an independent group, the world’s top ten hospitals for medical tourism were in Malaysia, Germany, Lebanon, India, South Korea, Thailand, Turkey, and Singapore.
how about 11% interest in a currency that will likely rise against the US dollar over the next five years? How about doubling your money, just in a bank, in five or six years? Going offshore is not about numbered and anonymous bank accounts, it is about diversifying and increasing your options.
New Zealand bank accounts currently pay up to ten times the interest that American banks do. If you are more adventurous, there are emerging market currencies that offer interest rates as high as 18%. The key is to know which ones are good and which ones to avoid. In some cases, you do not even have to sell your US dollars or euros to profit. Several foreign banks pay 5-6% annual yields on US dollar accounts if you do not want to invest in foreign currencies. Banks in financial centers like Hong Kong, Singapore, and Andorra offer as many as 12-15 currencies, all in one account. You can
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Oftentimes, those who open accounts before requirements are tightened get grandfathered in. This strategy is also known as building a tunnel.
That is why it can be a great idea to open small accounts now with the understanding that, if you do not, they may be unavailable to you in the future.
However, if you are still bound and determined to achieve anonymity, cryptocurrency is about the only way to obtain some anonymity in your financial dealings.
The country that tops my list, however, is Georgia. Georgia is hands down the easiest place in the world to open an offshore bank account today.
If you have staff or virtual assistants operating overseas, that may be a good indication of where your company’s work is being done. If you are living the true Four Hour Workweek lifestyle and spending minimal time supervising other people doing the real work, that will help your case too.
Now, let’s dive into the good stuff. If you or your business are location independent, chances are that you can save some serious money. E-commerce store owners, Amazon sellers, Kindle publishers, coaches, consultants and, in many cases, even passive income investors, among others, can take advantage of greatly beneficial tax laws.
One way to look at these tax laws is to say that your government will pay you to travel and live overseas in their appreciation for you leaving.
Establishing your company offshore is not so different from the process of moving your company to a different state. And, if you are willing to move from California to Arizona to save on tax, why stop there? There are many countries that have rolled out the red carpet to those willing to incorporate their business in their jurisdiction. A few countries charge zero tax to just about everyone; all you need to do is show up.
So, the Seychelles government sells access to an environment where, for $100 payable to them plus agent and legal fees, you can pay zero tax, file zero accounting records, and keep your name from appearing on any public record for prying eyes to find. The only restriction is that you usually cannot sell to people in the country where your offshore company is registered,
When you establish a Hong Kong company and move your business assets there, you can become an employee of that company. If properly structured, a Hong Kong company’s employee based outside of Hong Kong should not be subject to Hong Kong salary tax, but rather salary tax in the place they live. And, if you live the Nomad Capitalist lifestyle, the salary tax in the place, or places, where you live should be very low, if not zero.
income. It may sound a little tricky, but it is quite simple: spend the majority of your time in tax friendly places. The good news is that tax friendly places have a lot of the good beaches. Let’s imagine you set up a company in Hong Kong and establish that company as doing business outside of Hong Kong. If set up properly, your corporate tax rate will be 0%. You can then take a salary from that company, which should also be exempt from tax there because you do not live in Hong Kong. The only tax left to determine is your personal income tax. That is where your living location
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If you are a sole proprietor, you will still have to pay Social Security and Medicare tax because you are not an employee of a foreign company. However, if you have an offshore company, you are treated as the employee of that foreign company. And, since employees of non-US companies do not pay US payroll tax, you can avoid that, too. US citizens who qualify for the FEIE are also exempt from maintaining health insurance under Obamacare.
