Steps to OPTIMIZE one's taxes when leaving a country like Canada to become a Non resident.

[freedomseeker]

Here is the deal, I'm recently retired (fairly young) with a full pension. My pension provider will send my pension where ever I want, but informed me that a government withholding tax would apply.

I dug a little deeper and noticed that then rate varies from country to country.

For example UAE residency would result in the government taking 25% but a place like (for example) Malaysia (Sarawak visa) would only result in 15%.

The rest of my now liquidized assets from the sale of a couple houses and stocks over the last year (before the economic corrections in both... yeah!) Will be invested back in the stock market once my new residence and banking setup is complete. I will then be travelling, blogging, doing photography, video production, as a side job for another (likely small for a while) income stream.

So I like the idea of setting up my financial base in the UAE, but I don't like the extra tax on the pension. Could I also set up residence in say Malaysia and declare that? If i did that would the pension monies HAVE to be sent to a Malaysian bank or could they then be sent to the UAE or would it be better to set up some form of LLC and banking to manage the situation? Also how does one optimize setting up their stock investments in this situation to minimize taxes?

*Malaysia used solely as a example as it was one of the countries that came up with less withholding when i asked*

So what is the best course to take to optimize my income taxes on my investments, protect my assets (no shitty, shady banks), reduce the reporting of CRS, etc and improve my privacy (I have zero confidence that my home country will not be moving to a more USA style of taxation by citizenship, as they spend like drunken soldiers attempting at building all their socialist dreams and looking for ever more ways to fund it) IE... once my money is out i want it obfuscated as it grows.

I have zero interest of being a resident of Canada again (although I recommend you all visit... in the summer!) LOL

Anyways... I hope this all makes sense? If you were me, how would you manage your escape?



I am also fine if people want to turn this thread into a guide on how to Optimize their escapes from their jurisdictions as well. The the tweaks and pitfalls to be concerned with while trying to optimize their fiances. (well after I get some clarification! LOL)

Cheers everyone.

 

[Sols]

I'll preface this that most of my experience is with business income and personal income. Pensions are treated differently (it's its own thing), so take what I write with an extra grain of salt.

For example UAE residency would result in the government taking 25% but a place like (for example) Malaysia (Sarawak visa) would only result in 15%.

Have you identified these two as your for sure best (lowest taxed) options, or are there others to consider? I.e., can you go lower than 15%?

So I like the idea of setting up my financial base in the UAE, but I don't like the extra tax on the pension. Could I also set up residence in say Malaysia and declare that?

You can claim residence in Malaysia but actually live in UAE, and enjoy the 15% tax instead of 25%. You'd probably be committing some sort of fraud in Canada and risk whatever the repercussions are for that if you are caught. In addition to repaying the 10% difference, they might impose additional sanctions.

If i did that would the pension monies HAVE to be sent to a Malaysian bank or could they then be sent to the UAE or would it be better to set up some form of LLC and banking to manage the situation?

Imagine a compliance officer within the Canadian government screening pension payments to overseas retirees and seeing payments to UAE for a person resident in Malaysia. They would likely at some point decide to look into it.

Pensions are normally only payable to an account that belongs to the person. The only normal exception is if there is some sort of trust or guardianship involved.

In other words, have it paid into a Malaysian bank account.

Also how does one optimize setting up their stock investments in this situation to minimize taxes?

This gets complicated because we're dealing with three jurisdictions. But in principle, if you are UAE tax resident and live there, you would be subject to UAE tax only. Malaysia would likely not care about you and, from a tax perspective, neither would Canada (if you sever your ties completely and correctly when moving out).

And while there is talk of implementing tax in UAE, it's going to be a low figure and not applicable across the board.

If you want to separate your wealth from yourself personally, invest through a company. If you want a more sophisticated structure and are concerned about asset seizure (i.e. you want asset protection), that's a long discussion to be had with an adviser like Asiaciti Trust, Vistra, and so on.

So what is the best course to take to optimize my income taxes on my investments, protect my assets (no shitty, shady banks), reduce the reporting of CRS, etc and improve my privacy (I have zero confidence that my home country will not be moving to a more USA style of taxation by citizenship, as they spend like drunken soldiers attempting at building all their socialist dreams and looking for ever more ways to fund it) IE... once my money is out i want it obfuscated as it grows.

If your plans for the future include citizenship, UAE is not the place to settle down. UAE citizenship is both not very attractive and difficult (practically impossible for someone like you) to obtain. On the other hand, if you have or make enough money while in UAE, there's nothing stopping you from obtaining citizenship by investment in a place like Dominica, Saint Kitts and Nevis, and so on.