Ship International, Inc. (FSI ) plans to offer the opportunity for an unprecedented
lifestyle by constructing a sea-based, mobile, full-spectrum residential,
commercial, and resort community on a mammoth, mobile, sea platform. The
community will travel the entire globe over a two-year cycle, never leaving
international waters. It will spend only 30% of its time in transit and
the other 70% standing offshore points of interest. A fleet of aircraft
and watercraft will ferry people from ship-to-shore, around-the-clock,
residents for touring and business, and as many as 30,000 onshore guests
and visitors daily.
Approximately 18,000 resident-owned
living units, covering a broad price range, and 3000 private-enterprise
commercial units, including 1000 residential/commercial combination units,
will offer buyers a wide variety of living options. They will enjoy over
200 acres of open-air space, most of which will be landscaped parks, with
half for resident use only. The community will levy no taxes of any kind.
Property owners will pay a single competitive monthly maintenance fee.
community will offer all the amenities of a modern city, including a large-scale,
state-of-the-art hospital, a kindergarten-through-college school system,
and an international library. It will also feature resort amenities such
as casinos, conferences centers, and an array of athletic and recreational
facilities, restaurants, and entertainment sites. Retailing and world trade
will predominate the commercial sector, creating the world’s largest duty-free
mall, but there will be light manufacturing and assembly operations as
well. A small number of major enterprises such as hotels, casinos, and
banks, will operate under license from FSI. In addition, hundreds of residents
will run personal-service businesses in areas such as health care, media,
education, fitness, touring, counseling, consulting, and arts and crafts
The World’s Biggest Ship—The World’s
Newest Tax Haven? Analysis by Mark Nestmann
Nearly a mile long and 25 stories
high, the world’s largest ship—Freedom— will soon be taking shape.
Freedom will eventually be
home to 50,000 residents, 4,000 businesses and 15,000 employees. Many residents
will own their personal condominium, ranging in price from $185,000 for
a 750-sq. ft. unit to $6 million for a 5,100-sq.ft.oceanside penthouse.3Time-share
rentals will also be available.
with state-of-the-art communications technology and a 4,000-foot jet runway,
may become a floating tax haven for many of its residents.
impose only a monthly fee for services depending on the size of the unit
purchased. It will impose nor enforce any other taxes or fees.
Designer Norm Nixon envisions the
to continuously circle the globe in a route to keep its residents in perpetual
sunshine. Anticipated ports of call include stops on every continent. Many
duty-free shops will operate to attract local tourists. Other residents
will operate businesses at sea. Nixon believes that the size and affluence
of the resident population will be sufficient to support its own local
As a sea-going vessel, Freedom
will fly the flag of a specific country (to be determined) and be subject
to the laws and regulations of that country as well as international maritime
law. So Freedom won’t become be a "sovereign" tax haven. However,
a number of residents plan to offer offshore services.
Freedom is only the largest
floating tax haven planned. Another (much smaller) ship, The World,
also has cabins for sale. Construction of The World begins this
month in Germany.4
Floating tax havens are only one
option residents of high-tax countries will have in coming years to reduce
their tax burden. New offshore financial centers will develop as well,
as jurisdictions from Montana5 to former Soviet
republics set up shop.
Most countries do not consider persons
working abroad "non-resident" for tax purposes unless they can show residence
in a foreign country. Persons working on Freedom, unfortunately,
are not likely to qualify. Nor are US persons (who are taxed on
worldwide income wherever they live) who wish to claim the annual $72,000
"foreign earned income exclusion."6According
to tax attorney Lawrence D.W. Graves, US oil-riggers, pilots and others
that lack a "foreign tax home," "have met with absolute failure in claiming
the exclusion for foreign-based employment."7
|For more information on Freedom
1. United States
v. Hendler, 952 F2d 1364 (Fed Cir 1991).
2. "City at
Sea," Popular Mechanics, Feb. 1998, p. 69.
3. Freedom Opportunities,
LLC, 10999 Metcalf Ave. #200, Overland Park, KS 66210; phone: (800) 966-7229;
fax: (913) 338-1703;
4. Doyle, "Cruise
Liner Seeks Super-Rich Stay-at-Homes," Reuters, Dec. 29, 1997.
5. "Rocky Montana
High," Forbes, Nov. 3, 1997.
6. 26 USC 911. http://www.law.cornell.edu/uscode/26/911.shtml.
7. Lawrence D.W.
Graves, c/o Fierst & Pucci, 64 Gothic Street, Northampton, MA 01060;
phone: (413) 584-8067; fax: (413) 585-0787; e-mail: Graves@Ent-Atty.com.