Long-term strategy for digital nomad

[fshore]

Uhm, no, thank you. I left the country years ago and the tax office never bothered me after. I don't want to give them any ideas, especially since I'm currently not a registered resident anywhere else.



Oh, I'm not against US LLCs at all! They sound almost too good to be true (provided you can get a bank account, which I've heard you can with Transferwise).
With UK Ltd.s, there's the challenge of getting a VAT ID, as long as they're still in the EU. Without a VAT ID, my clients would not be able to deduct the VAT.

The UAE still seems interesting as well. It would work for personal residency, I actually like the UAE and they seem to be implementing economic substance regulation. Maybe it's just a stupid fantasy, but I'm wondering how strictly the UAE actually implements those rules. Maybe it's actually a net positive?

There's no challenge getting a UK vat number after you pass the threshold. And without one you wouldn't charge vat so the client wouldn't need to deduct it. And a US llc can't easily get a EU vat id, so I don't understand why you don't use that argument against a US llc also.
If brexit happens you will not charge vat to a non uk client.

Apart from this, a lot of the discussion here refers to the actual laws and the facts on where you are or might be tax resident. If you don't want to ask your local tax office if you are tax resident there, then a lot of the advice here might not be precise. If the main goal is to not get caught then the options you have is different vs if you try to make a long term legal solution that will stand if anyone should question it.

 

[KJK]

If you don't want to ask your local tax office if you are tax resident there, then a lot of the advice here might not be precise.

This is a funny topic. The OP had some interesting questions and points... And then the forum diverts into these ridiculous nuances... from dying when holding US stocks... to going to the tax office of his home country (to which he never plans to return) and basically self-reporting himself "oh hello sir I want to get into trouble".

I'm sorry but I don't know any long-term solutions, there are dozens of companies who specialize in corporate setups and they have to adjust because the laws change every year or two. Of course they change for the worse...

The only general recommendation I have is don't rely on one country, don't get involved with USA too much (unless you have a good reason), VAT is also tricky... Seems like jscargo knows his stuff.

 

[JustAnotherNomad]

I was under the (obviously incorrect) impression that a UK Ltd. cannot (easily) get a VAT ID without UK substance, but would still need to charge VAT after passing the threshold. Thank you for clearing that up.
With a US LLC (or a post-Brexit UK Ltd.), there would be no VAT when dealing with EU clients. Claiming VAT refunds from EU suppliers would probably a slightly bigger hassle than if ordering with a EU VAT ID, but not impossible.

I am definitely "gone" from my home country. I am not just gone on paper. There are no economic ties except some bank accounts and credit cards, with transactions that show I'm out of the country. I spend much more time in other countries, I don't even have any clothes at my parents' house. The chances of them caring about me just seem minimal. I actually think the risk of other countries claiming I am tax resident there is much higher due to time spent, frequency of visits or economic ties (customers). But as long as I travel as much as I do, that is not a very big concern to me.
However, as others have pointed out, I think it makes sense for me to get personal tax residency in a country with a benefitial tax code (no tax or or no tax on foreign-sourced income), as the concept of a "digital nomad" doesn't really seem to exist formally. Just to be able to open EMI accounts etc.
Otherwise, for what I have right now, the Estonian company works fine.
It just isn't ideal for investing because there would always be 25% taxes on dividends. I could of course invest the money in my own name (once I have set up tax residency in a new country).
But Estonia also charges 25% should I sell the company with a profit one day, so I was wondering if maybe there is a better setup that would solve both these issues and where it (most likely) would be possible to create a legal and compliant setup should I decide to settle down in a few years.
Of course, I can just scrap everything then and start with whatever is the best setup for my situation at that point.

I have heard from one guy that he invests into startups through a Singapore company. He lives in a high-tax EU country and had a big-4 company do his tax returns in his home country. If I'm not mistaken, he even has a US passport. Despite the Singapore company lacking substance (as far as I know), his local EU tax office never questioned this setup. He probably got lucky and I'm sure it would have been a very different story with a BVI company, but I'm just thinking that maybe some jurisdictions are better than others.

Georgia and Bulgaria still seem interesting. Especially since it shouldn't be too difficult to get actual tax residency there by renting an apartment and hiring some people?
Portugal NHR also looks interesting, but it's limited to 10 years. But it's a Schengen country, which is an advantage.
I'm just looking for some suggestions.

 

[Artemis Eleutheria]

... how can you even open a bank account, a company, or an EMI account if you are are not a resident of anywhere?

Well, one may leverage time by doing things in the "right" order.

1. Open all accounts, companies, etc
2. Become a PT

You may be required to advice when you change address under the terms with the bank but technically you have not changed address ... you have only left your previous address without ever getting a new permanent address.

On the other hand, if you already are a PT, you may need to stop and take a rest first, then 1 and 2.

 

[Tax Cow]

@JustAnotherNomad

Learn some manners pimple boy.

You come here with very broad questions, in seek of a perfect strategy. All advice you get is free, given by business owners, accountants, offshore lawyers, consultants and freelancers who have accomplished far more than you in life. It's not like you have consumer rights, because the advice is free.

You discredit replies with arrogance, acting like you have a perfect understanding of the topic. Yet, your knowledge is very limited as you continue to demonstrate.

Typical avocado-eating hipster nomad. Next time you get advice, you say "thank you, sir".

 

[jscargo]

I have a couple of questions about this:
1. What would be the advantage with Georgia over Panama, Paraguay, UAE, maybe Cyprus or any of the other jurisdictions that don't tax foreign-sourced income?
2. If any other country claims I'm tax resident there, would they really leave me alone when I show them my Georgian tax residency certificate? I strongly doubt that.
3. I cannot do business through a Gibraltar company. Period. I understand it probably works great for online B2C businesses, but that's not what I do. I would have to use a company from a different jurisdiction for that. Maybe a UK company could work (after brexit - as long as they're in the EU, there's the issue that they wouldn't issue a VAT ID without substance, as far as I know). Or a US LLC with transparent taxation. Or a Singapore company. Which would you choose? Ideally something that would work relatively well, even if I one day move back to a high-tax country. For example by getting personal residency in that jurisdiction as well (in addition to the high-tax country) to build some more substance. In my opinion, it would be a big advantage if there was no or very little information exchange, just in case.

1. Georgia was just an example. Between Georgia, Panama and UAE, there is not much difference. Paraguay is a territorial tax country but the banking infrastructure (and all other infrastructure) is far behind the other options. Cyprus is not a territorial tax country.

2. If you don't make something absolutely flagrant that would lead them to believe so, they will probably never ask. The thing is, with your Georgian/OtherCountryYouEstablishIn tax certificate/residency/utility bill you can do so many things.

2.1 You can then open bank accounts, incorporate in most countries, open trading accounts on most brokers to invest on ETFs as a Georgian/Cypriot/AnyOtherCountryExample tax resident. You can then, finally open your brokerage accounts and buy stocks, and withdraw the profit when you want to this country, before you move back definitely to Spain/France/Italy. You will be also able to incorporate let's say in Poland, buy real estate on the company name, transfer to your personal name before you move to the high tax country.

3. Gibraltar was just an example. More over, I believe it works better with B2B then B2C. Regarding what I would choose, I would choose a country that suits to my business and personal goals. If most clients are in the US, I would choose the US. The threshold to get things started in Singapore is much higher, so unless I would be doing business in the region and or willing to establish around there (it costs a lot), I would not touch it.

Knowing what I know about you, I would pick the UK. It has a good reputation, ranks top 10 on the ease of doing business index, would not raise immediate red flags when you move back to your country, low overhead, taxes are lower than Estonia (as of 2020). The con is that it will not be extremely easy to get a corporate bank account, but if you are willing to settle for an EMI (which I do), it is fine.

 

[jscargo]

Well, one may leverage time by doing things in the "right" order.

1. Open all accounts, companies, etc
2. Become a PT

You may be required to advice when you change address under the terms with the bank but technically you have not changed address ... you have only left your previous address without ever getting a new permanent address.

On the other hand, if you already are a PT, you may need to stop and take a rest first, then 1 and 2.

Gonna open them all accounts and companies without a tax ID to inform and a proof of residence? You will restrict your options to 5% of what the market can offer.

Just walk to any bank and say "I am a PT what services can you offer" - unfortunately the answer will be the same almost everywhere.

 

[fshore]

Gonna open them all accounts and companies without a tax ID to inform and a proof of residence? You will restrict your options to 5% of what the market can offer.

Just walk to any bank and say "I am a PT what services can you offer" - unfortunately the answer will be the same almost everywhere.

If you are not tax resident in your citizenship country then it would be safe to use that tax number and address to open brokerage accounts.

 

[JustAnotherNomad]

You discredit replies with arrogance, acting like you have a perfect understanding of the topic. Yet, your knowledge is very limited as you continue to demonstrate.

I understand that wasn't the response you were expecting, my apologies for that.
I'm honestly sorry if I came across that way. I don't doubt your experience. In fact, your advice made me strongly reconsider Bulgaria.
I'm asking the questions I'm asking because I'm trying to learn. I have read things here and there and I'm trying to put it all together. I am aware that there is a lot of wrong information out there, spread by people who are to cheap to pay just a few hundred bucks for a lawyer. That's not me.

Typical avocado-eating hipster nomad.

Haha, no, not really. I hate those guys. I have corporate clients, I'm not a travel blogger. And I eat meat.

 

[Artemis Eleutheria]

Gonna open them all accounts and companies without a tax ID to inform and a proof of residence? You will restrict your options to 5% of what the market can offer.

Just walk to any bank and say "I am a PT what services can you offer" - unfortunately the answer will be the same almost everywhere.

I think you may want to read my post again ... as it seem you did not quite understand it ...maybe because of deficiencies in my way of putting my point across.

 

[JustAnotherNomad]

1. Georgia was just an example. Between Georgia, Panama and UAE, there is not much difference. Paraguay is a territorial tax country but the banking infrastructure (and all other infrastructure) is far behind the other options. Cyprus is not a territorial tax country.

Cyprus is not a territorial tax country, but as far as I know you can receive dividends tax-free there as well? There's also Portugal with its NHR system (which requires that one doesn't spend too much time there, as otherwise the income might be considered local).
The thing is, would this really protect me from anything or is it just if SHTF or is it just to look nice on paper, but wouldn't withstand any digging?
I mean, should any country really try to tax me, would Georgia/Panama/UAE/Cyprus/Portugal step up for me and say "Hey, he's ours?"

Or - this is the other version I have heard - say, country X (my home country or a country I have economic relations with etc.) says "We think you should be paying tax here!".
And I say: "Uhm, no, I'm a tax resident of the UAE/Georgia/Cyprus!"
Wouldn't they just say: "Yeah, right. So where's your utility bill? Where's your proof that you really live there full time/have the closest ties to that country? How much tax are you paying? You can't just pay NO tax at all."

This is particularly relevant with flight records etc. in Europe and when I'd be claiming to live outside the Schengen area.

2. If you don't make something absolutely flagrant that would lead them to believe so, they will probably never ask.

That's the other thing. I also think it seems extremely unlikely because I am indeed traveling so much.

The thing is, with your Georgian/OtherCountryYouEstablishIn tax certificate/residency/utility bill you can do so many things.

Wait a minute, getting residency in those country is easy. But getting a tax certificate or utility bill seems a lot more difficult? A utility bill probably would be possible to come by by renting out an apartment through AirBnB or such - but would it stop any claims against me, should they arise?

2.1 You can then open bank accounts, incorporate in most countries, open trading accounts on most brokers to invest on ETFs as a Georgian/Cypriot/AnyOtherCountryExample tax resident. You can then, finally open your brokerage accounts and buy stocks, and withdraw the profit when you want to this country, before you move back definitely to Spain/France/Italy. You will be also able to incorporate let's say in Poland, buy real estate on the company name, transfer to your personal name before you move to the high tax country.

Something like that was what I had been thinking of as well. There are a lot of people online advocating for this. But has anyone actually tried it long-term? I have heard that when you move back to a high-tax country like France from the UAE/Panama, they'll usually ask for proof that you actually lived in that country. And that that is especially true for moving back to your "home country" (which I have no plans of).
And I've heard that for that reason, it's usually smarter to just move to Bulgaria (or a similar country), deduct as many expenses as possible and just pay some tax on the remaining income. That way you can show to everyone that you're an honest taxpayer and people will leave you alone.

3. Gibraltar was just an example. More over, I believe it works better with B2B then B2C. Regarding what I would choose, I would choose a country that suits to my business and personal goals. If most clients are in the US, I would choose the US. The threshold to get things started in Singapore is much higher, so unless I would be doing business in the region and or willing to establish around there (it costs a lot), I would not touch it.

I really don't care where the company is incorporated, as long as it's a reputable jurisdiction and works for my needs.

Knowing what I know about you, I would pick the UK. It has a good reputation, ranks top 10 on the ease of doing business index, would not raise immediate red flags when you move back to your country, low overhead, taxes are lower than Estonia (as of 2020). The con is that it will not be extremely easy to get a corporate bank account, but if you are willing to settle for an EMI (which I do), it is fine.

I need to look more into this, haven't made much research on UK companies. But I think for me the most important thing to figure out is where to have my personal residency:

1. Panama/UAE/Georgia/Cyprus etc. (I don't want to spend 60 days in Cyprus though)
2. Play it safe and go for Bulgaria

I feel that there are two kinds of people, some strongly favor option 1, others strongly favor option 2.

 

[jscargo]

Well, from the way you are saying, it says you don't really want to commit to Bulgaria, Cyprus or anything. Obviously if you go to Bulgaria, have the business there, the bank accounts there, the accounting there, the invoices there, a place to live there, a office rented there(even if a virtual one), AND you spend more time in Bulgaria then anywhere else, nobody will ever give a f about what you do. You mention AirBNB, this is a service for tourists, first of all to register in Bulgaria you will need a rental contract, second it costs virtually nothing per month.

Getting residency is usually harder than a tax ID, even as a EU citizen. But in some countries you will get it at the same time.

You have to be more objective and clear with your conditions, otherwise you will probably get solutions for problems that are not yours.

 

[JustAnotherNomad]

Is there a way to send a PM in this forum? I didn't find the right button.

 

[jscargo]

Is there a way to send a PM in this forum? I didn't find the right button.

I dont know either, maybe the only way is to write on someone's profile.

 

[JohnLocke]

On the other hand, if you already are a PT, you may need to stop and take a rest first, then 1 and 2.

Sorry but for the general understanding. What is a "PT" ?

 

[Artemis Eleutheria]

Sorry but for the general understanding. What is a "PT" ?

Perpetual traveler - Wikipedia

en.wikipedia.org

 

[JustAnotherNomad]

I dont know either, maybe the only way is to write on someone's profile.

Do you use any other secure messenger or so?

 

[jscargo]

you can contact me in this throwaway account: [email protected] this address will expire in 48 hrs.

 

[GiGoGo]

For 100k USD you can get yourself emplyed by your own company in HK/SG, get the local TAXID and create a US LLC. After this, you can live everywhere less than 183 days and declare your 0% taxes in your new official jurisdiction.

 

[JustAnotherNomad]

100k in yearly fees? Or 100k salary/revenue? If I’m a SG resident, my income would probably be considered local?