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Digital Nomad with dual citizenship looking for new Tax Residency away from UK

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digitanium

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Nov 15, 2022
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#1
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Hey guys

First post here. Have found this forum to be super useful to get a grip on basics of tax residency.
I am currently in the process of going the full fledged digital nomad route and looking at options to reduce my tax liability along the way.

Below is my scenario,

Citizenship
Dual Citizen (UK & Malaysia)
- Born in Malaysia - Still holding onto my Malaysian citizenship.
- Currently living in the UK - I have acquired British citizenship and the UK is home for me.

Taxes
UK - I am a full time remote employee (UX Designer) working for a UK based Digital Marketing Limited company.
I draw about GBP90K gross per year + annual bonuses.
All taxes are paid as standard PAYE deduction from my monthly salary.

Malaysia - I have an active tax profile in Malaysia. Been paying nominal taxes for web services I render to my Malaysian clients.

I have kept both tax profiles incognito since Malaysia does not recognize dual citizenship. The Malaysian Tax ID is something I had acquired even before I became a British citizen.

Property
I pay a mortgage for the property I currently live in with my wife. In the process of renting it out in the coming months.

The Plan
My UK employer has given me full flexibility to perform my job remotely from anywhere in the world and have no qualms of paying my current salary in any currency of my preference.
So I’d like to leverage this flexibility and choose a digital nomad lifestyle moving forward.

Ideally I’d like to,
1) Pay significantly lower(<15%) tax.
2) Split my time between Malaysia for 2/3 months in a year to visit family and friends. For the remaining months, moving to different countries each 3 months would be absolutely perfect for me. Somewhere nice and warm all year.
3) Be a tax resident in a different country/place that grants a tax certificate - if this is needed for the UK HMRC?

Current consideration for Tax Residency
A) Malaysia
I/ guessing this would be the easiest option - make Malaysia my sole tax residency. Get my UK salary paid and taxed here.

B) UAE
Nice 0% tax but concerned with high cost of living.

C) Cyprus
The only European country in my consideration for now. Sounds like a decent tax regime + nice weather.

I’d also consider any countries in the Caribbean or Americas as long the whole bureaucracy is minimal and moving about is flexible.

Appreciate any advice or feedback.
Thanks
 
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#2
digitanium said:
B) UAE
Nice 0% tax but concerned with high cost of living.
Click to expand...
Depends on where you want to live and your lifestyle, there have been a few threads about living in Dubai / UAE already here. You could have a chat with @Fred he lives there.

digitanium said:
C) Cyprus
The only European country in my consideration for now. Sounds like a decent tax regime + nice weather.
Click to expand...
Cyprus isn't bad, I have been there a few times. The question is if you want to live on a small island?
 
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#3
In Cyprus, power outages are commonplace, which can cause problems with computer/internet work. Also, the residential rental market is probably very tight and the rights of tenants are almost non-existent, as one hears. Can anyone here confirm this?
 
#7
RealDude said:
Examples such as multiple rent increases of 30-40% each, many changes of ownership of properties, etc.
Click to expand...
At least in Paphos rents have increased massively by more than 100%. That was one of the reasons why I have not chosen Cyprus although I initially wanted to move there. 2 years ago, you could rent a nice new-built villa there for 1000 €/month, now it's 2000-3000€. Also, it gets more difficult to find something with utility bill in your name.
Power outages will probably be widespread across Europe this winter. You can always buy a battery or generator for backup.
 
#8
digitanium said:
Appreciate any advice or feedback.
Click to expand...

You can basically pick the remote worker visa for a country that does not tax foreign earnings and has cost of living and lifestyle you can handle from list below.

https://nomadgirl.co/countries-with-digital-nomad-visas/
You also need to ensure you pass the SRT test below to see you are not considered UK tax resident even while abroad due to ties.

https://assets.kpmg/content/dam/kpmg/pdf/2016/01/statutory-residence-test-flowchart.pdf
digitanium said:
The Plan
My UK employer has given me full flexibility to perform my job remotely from anywhere in the world and have no qualms of paying my current salary in any currency of my preference.
So I’d like to leverage this flexibility and choose a digital nomad lifestyle moving forward.
Click to expand...

How exactly will they pay you? Via a company you setup or as an employee? Will they pay you in UK etc? There are implications for you and your employer. Please read the below fully.

https://www.litrg.org.uk/tax-guides/employment/working-remotely-your-uk-employer-while-overseas
Get professional advice and don't try and wing it.
 
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#10
RealDude said:
Nice link. I would be interested to know if there are employers who allow their employees to work remotely from abroad for a longer period of time with the risks mentioned.
Click to expand...

A few do but they basically use a global payroll provider like the below. Hence the employee has a direct local employment contract in the country of their choice with a local payroll provider as their employer and no longer a direct employment contract with UK company. It gets around most of the potential problems.

https://nhglobalpartners.com
 
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#11
If you do not value your employee protection rights in your home country and/or do not have a strong works council then this can be an option. The salary is of course also "adjusted“? What about retirement benefits and health insurance?

This page even give a brief and mostly correct insight into the labor laws of the countries. Cool. Here is an example for Germany, where the construct works for a maximum of 18 months.

https://nhglobalpartners.com/countries/germany/germany-peo/
 
Last edited:
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#12
RealDude said:
What about retirement benefits and health insurance?
Click to expand...

Health insurance is affordable if you can use third-party providers like Pacific Prime. For retirement you would need a private pension plan from a global provider. Both costs would need to be factored into your end salary. However to all intents and purposes you are a contractor or third-party to the UK employer and a lot of your employee rights will disappear :(.
 
#13
digitanium said:
Hey guys

First post here. Have found this forum to be super useful to get a grip on basics of tax residency.
I am currently in the process of going the full fledged digital nomad route and looking at options to reduce my tax liability along the way.

Below is my scenario,

Citizenship
Dual Citizen (UK & Malaysia)
- Born in Malaysia - Still holding onto my Malaysian citizenship.
- Currently living in the UK - I have acquired British citizenship and the UK is home for me.

Taxes
UK - I am a full time remote employee (UX Designer) working for a UK based Digital Marketing Limited company.
I draw about GBP90K gross per year + annual bonuses.
All taxes are paid as standard PAYE deduction from my monthly salary.

Malaysia - I have an active tax profile in Malaysia. Been paying nominal taxes for web services I render to my Malaysian clients.

I have kept both tax profiles incognito since Malaysia does not recognize dual citizenship. The Malaysian Tax ID is something I had acquired even before I became a British citizen.

Property
I pay a mortgage for the property I currently live in with my wife. In the process of renting it out in the coming months.

The Plan
My UK employer has given me full flexibility to perform my job remotely from anywhere in the world and have no qualms of paying my current salary in any currency of my preference.
So I’d like to leverage this flexibility and choose a digital nomad lifestyle moving forward.

Ideally I’d like to,
1) Pay significantly lower(<15%) tax.
2) Split my time between Malaysia for 2/3 months in a year to visit family and friends. For the remaining months, moving to different countries each 3 months would be absolutely perfect for me. Somewhere nice and warm all year.
3) Be a tax resident in a different country/place that grants a tax certificate - if this is needed for the UK HMRC?

Current consideration for Tax Residency
A) Malaysia
I/ guessing this would be the easiest option - make Malaysia my sole tax residency. Get my UK salary paid and taxed here.

B) UAE
Nice 0% tax but concerned with high cost of living.

C) Cyprus
The only European country in my consideration for now. Sounds like a decent tax regime + nice weather.

I’d also consider any countries in the Caribbean or Americas as long the whole bureaucracy is minimal and moving about is flexible.

Appreciate any advice or feedback.
Thanks
Click to expand...
Romania sounds to be a good option,
 
#15
I have been living in Cyprus for about 2 years now and am satisfied with my experience. During that time, the electricity has only been turned off twice, and both times for less than an hour.

The climate is excellent. It's only too hot for about two months a year. The rest of the year, the weather is about the same as the summer and spring seasons in average continental Europe.

Although prices for everything are quite high, it is still cheaper than the UAE. If the tax savings allow you to pay for quite expensive rent, then Cyprus is definitely a good place to live.

It's also worth mentioning that the Internet in Cyprus is fast and stable.
 
Last edited:
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#16
RealDude said:
That means there are many lies about Cyprus on Youtube & Co. from residents there?
Click to expand...
You won't relay on social media and specially not on Youtube. There are so many colorful people there that may only do it for the money.

Seek professional advise if your only source is Youtube.
 
#18
How about Gibraltar, as far as I know, not taxes on foreign earned income, not sure if income made in the UK is taxable, I don't think so but worth checking. And you are within a walking distance from Spain, plus an airport right there in Gibraltar to fly anywhere you want, internet connection is perfect.
 
#19
Radko said:
How about Gibraltar, as far as I know, not taxes on foreign earned income, not sure if income made in the UK is taxable, I don't think so but worth checking. And you are within a walking distance from Spain, plus an airport right there in Gibraltar to fly anywhere you want, internet connection is perfect.
Click to expand...
Gibraltar has mostly flights to London and a few to Manchester. You would probably need to use Malaga for other non-U.K. European destinations.
 
#20
RealDude said:
That means there are many lies about Cyprus on Youtube & Co. from residents there?

Examples such as multiple rent increases of 30-40% each, many changes of ownership of properties, etc.
Click to expand...
I think rents have increased considerably in the past 2 years. I think 30/40% might actually be a conservative estimate.
 
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