Nomad Capitalist: How to Reclaim Your Freedom with Offshore Bank Accounts, Dual Citizenship, Foreign Companies, and Overseas Investments

by Andrew Henderson

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 comes in. If you are a US citizen, there is an objective way to handle where you live and how much you pay yourself: the Foreign Earned Income Exclusion (or FEIE). While US citizens must file tax returns even after they leave the United States, the FEIE allows each US citizen to exempt a certain amount of earned income ($104,100 in 2018) from federal and, in most cases, state income tax if they spend all but about one month in a foreign country or countries. This means that US citizens have a unique advantage in that they can live as perpetual travelers so long as they are outside of the United States and inside any other country.