In today’s article, we talk about Asset Protection Strategies for Perpetual Travellers. Living the life of a nomad is a fearless way to live. Not letting country borders define your identity and seeking new adventures every day is fascinating. Do you think becoming a perpetual traveller is for you?
Deep diving in the Red Sea in Egypt, lazing on the tranquil beaches in the Maldives, sipping the traditional tea in Turkey, cycling around streets of The Netherlands, watching the Northern Lights in Iceland, indulging in the scrumptious food in Mexico, witnessing beautiful sunsets in Indonesia; travelling is a way you can live your life to the fullest. This is certainly what a perpetual travel lifestyle can bring.
But what about all the taxes that can make your memorable travels worrisome ones? Some countries have ridiculously high taxes that might not complement your nomadic lifestyle. Some laws of certain countries can pose serious harm to your hard-earned assets.
So what should you do to protect your assets to continue living your nomad life as a perpetual traveller? or to obtain dual nationality? There are a number of strategies that you can use to protect your assets. Here’s what they are.
Become a Perpetual Traveller
Perpetual travellers adopt a lifestyle where they maintain different aspects of their life in different countries so they’re not legal residents in one country. By doing so, they’re not obliged to pay taxes and you can enjoy personal freedom. Perpetual travellers usually obtain citizenship in a country (called tax havens), where their income sourced outside the country is not taxed. Having dual nationality can help this concept become real.
Obtain Residency in a Tax-advantaged Country
As a perpetual traveller, you can choose any country as your base. You can obtain dual nationality or become a resident of the country where taxes are favourable.
There are two ways to do that.
First, by becoming a resident of a tax-free country;
Second, where your income earned outside the country is exempted from tax. The tax obligations in most countries are based on your resident status, which means if you change your residency, you can change your tax status.
Following is a list of countries with favourable tax policies: Can you see yourself with dual citizenship in any of these countries?
The residents of the Bahamas pay no tax on their income because the country gets all its revenues from tourism and the offshore industry. To become a resident of the Bahamas, you either have to buy real estate there or pay for an Annual Resident Permit, which is $1000 per year. The Bahamas has a strong passport and a pleasant environment to live in.
It’s a small South-Pacific country east of Australia. The government of Vanuatu has introduced many programs to grant citizenship to foreigners through donation and investment. You can get Vanuatu passport by giving a donation to the country through the Development Support Program or by investing in property.
Belize income tax is very low and no taxes are levied upon the income earned outside the country. The Qualified Retirement Program allows individuals aged 45 or above and their families to gain permanent residency in Belize. All the retirement income is exempted from tax.
Income from abroad is not taxed in Nicaragua. To become a resident in Nicaragua, you need to show proof of income and that’s about it. However, to keep your residency intact, you’ll have to live there for at least half the year.
The tax in Panama is only levied on income sourced within Panama. To obtain residency, you have to open a bank account with a balance of at least $5000 or show an economic tie like investing in real estate or registering a company in Panama.
Keep Money in Countries with Strong Banking Systems
Countries that have stable banking systems provide maximum protection of assets. It also helps to diversify your investments across multiple institutions and countries so in a situation where the economy of one country falls, you know you’re not losing all your money. Here is Information on Asset Protection Strategies for Perpetual Travellers. You will find most offshore banks have branches in different countries and low foreign transaction fees, which is best suited for travellers. Here’s a list of countries that are safest for offshore bank accounts:
The Cayman Islands do not have direct taxation and exchange control so the funds can be easily moved in and out of the country. The banks in the Cayman Islands have no minimum reserve requirements so you can open an account even with a small amount.
The financial environment in Nevis makes it one of the best choices for offshore banking. The administrative and set up costs are very low and you don’t have to be present in the country to open the account.
Low exchange rates, low taxes, and the convenience of accessing your money are what makes Singapore an ideal location for offshore banking.
Register your business in a tax haven
Business is the best way to generate income for perpetual travellers because they can manage it from anywhere in the world. Irrespective of the size of your company, register your business in a country that offers minimal tax liability to your business. Here are some tax haven countries:
The British Virgin Islands
The BVI is one of the most favourable locations for offshore companies. Mainly because the business laws and regulations are designed to attract investors. The tax laws are complemented by a robust regulatory framework that makes it easy to do business in the British Virgin Islands. No taxes are levied on income, inheritance, sales, or corporate gains.
The offshore companies in Hong Kong are not taxed on its income that’s not earned within the country, which means you can register a company in Hong Kong for tax benefits but conduct all your business activities outside the country. Your company is also not required to pay sales tax, VAT, and dividends taxes.
For an offshore company in Belize, it can be incorporated in less than a day. There’s no minimum capital requirement and the costs are among the lowest in the world. Your company is not required to declare the names of its directors and shareholders and the sources of income. Any meetings can be held anywhere in the world and a proxy may attend it.
I hope you enjoyed our article on Asset Protection Strategies for Perpetual Travellers. We included information on dual nationalities and what to do with income earned outside the country.
About The Author
Mikkel Thorup is the host of The Expat Money Show podcast and the author of #1 Best-Selling book Expat Secrets on Amazon. He has spent nearly 20 years in continual travel around the world, visiting more than 100 countries including Colombia, North Korea, Zimbabwe, and Iran.
His goal is to help Expats like you to generate additional streams of income, eliminate your tax bill, and take advantage of offshore structures so you can travel the world freely and never have to worry about money again. For more information on his legal (but creative) tax strategies for Expats watch this free video.