0% tax citizenship with "perpetual traveller" setup?

[glengoolie]

Does anyone here have experience with obtaining a 0% citizenship, like one of the Caribbean ones, and being perpetual traveller that pays 0 taxes?

By perpetual traveller I don't mean to be country-hopping every other day but more like having 2+ homes around the world and simply avoiding spending more than half a year(183 days) any any of them.

You can buy the citizenship for 100k and two homes for 100k each(very random number since there are too many options), so that is 300k, and spend some days outside of these homes to get some days outside of them and avoid the 183 days in any of them, for a few thousands somewhere in a third country. After this initial 300k investment you are set for pennies.

Many people do it anyway when they "chase" summer in their second or third home.

Sounds like the best setup if you can make money as individual with "tax heaven" citizenship or with some overhead if you set up company in more "posh" country.

Personally I think this is how Nomad Capitalist works himself but he never discloses any info.

 

[glengoolie]

to add: 2 homes will be probably insufficient since that equals 6 months per home. i think 3 homes would be minimum to limit stay at one home to 4 months only, so no country would have a reason to challenge your tax residency and where you would have hard time proving your "center of life", since you would lack the residency in the Caribbean country.

also visa-free travel is usually limited to 90 days so 3 months, hence 4 places to stay would be the best number. these don't have to be expensive, i mean you can find cheap and good real estate in bulgaria, thailand, latin america...wherever you want, and still not break the bank.

 

[glengoolie]

i think it could be simplified even more. just like i have proposed, for my use case, in here: Cyprus company with Malaysian residence for trading?

in essence, form a residence in a country with territorial tax scheme so your foreign income will be taxed as 0.

form a company in tax friendly country, based on the type of business you do. for example malaysia or cyprus have 0% CGT, UAE has 0% tax(unless you are a bank or oil company), estonia has cumulative income exemption so you can reinvest money into the company and tax only when you pull the money out.

then simply make sure you are one year in your residence country to establish tax residency and from then on you can travel as you want but avoid being tax resident elsewhere(183 day rule).

worst case, you will pay the lowest possible healthcare and social security "taxes" from your income as the company director.

based on your country of residence, you will get tax free dividends or profit from the company.

best thing is that you do not have to travel, but you can.

so in the end, it is mostly about banking for you and your company and the renomé of the country where you incorporate(ie. UAE vs Isle of Man vs Cyprus vs ...USA and whatnot).

 

[Martin Everson]

Not sure what citizenship has to do with paying taxes unless you hold a US passport. Most important is residency.

I would personally just pick a tax free place to call home. Then travel as needed not spending more than 90 days in any one tax year anywhere. For example I used a company that provides serviced apartments to move around between major cities but keep my base in Caribbean.

 

[glengoolie]

my assumption was that your residency defaults to your country of citizenship but i think that is invalid, it's just the idea i and other normies are used to. the reality is, like you pointed out, tax residency and center of life is what matters...or the place you call home.

 

[KJK]

my assumption was that your residency defaults to your country of citizenship but i think that is invalid

The funny thing is that this may be invalid, may be valid or may be somewhere in between.

In an ideal scenario, noone will care and this "gray" solution of a perpetual traveller will work.
In a realistic scenario, your citizenship country will try to milk you no matter what and no matter what passports and residencies you have
In a pessimistic scenario, all of these countries will try to milk you and consider you a resident.

For example these would be the rules if you spent 182 days in Germany and 182 days in the United Kingdom:

• if the Contracting State in which he has his centre of vital interests cannot be determined, or if he does not have a permanent home available to him in either Contracting State, he shall be deemed to be a resident only of the Contracting State in which he has an habitual abode;
• if he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident only of the Contracting State of which he is a national

 

[Piano]

The funny thing is that this may be invalid, may be valid or may be somewhere in between.

In an ideal scenario, noone will care and this "gray" solution of a perpetual traveller will work.
In a realistic scenario, your citizenship country will try to milk you no matter what and no matter what passports and residencies you have
In a pessimistic scenario, all of these countries will try to milk you and consider you a resident.

For example these would be the rules if you spent 182 days in Germany and 182 days in the United Kingdom:

• if the Contracting State in which he has his centre of vital interests cannot be determined, or if he does not have a permanent home available to him in either Contracting State, he shall be deemed to be a resident only of the Contracting State in which he has an habitual abode;
• if he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident only of the Contracting State of which he is a national

Interesting ...

 

[glengoolie]

you mitigate this by having ONE official residence. i have learnt that there are two types of tax residencies - domiciled and non-domiciled..so to speak. Domiciled is where your residence is - your center of life. Usually the country you were born into and where you "live" your life. The non-domiciled residency is just a tax residency where you have spend more than 183 days and will be subject to their taxes. In other words, non-dom will tax your local income if you spend more than 183 days there whereas your dom will tax your worldwide income. Hence why it is the domiciled tax residence.