What are options for tax residency as a digital nomad that never spends more than 3 months in a country?

[JustAnotherNomad]

You only need to be at least once in HK every six months to keep your visa until you get the permanent residency.

I wasn’t aware of that, that’s actually really cool. Is it difficult to get residency there?
Are there any cheap apartments available?

 

[xipoid]

Their own national law, as I explained above... Article 4 is irrelevant if you don’t trigger tax residency rules in the first place. I would still recommend to rent an apartment for additional protection.

I see it more from a hassle perspective. As far as the letter of the law goes, you're obviously right, so I don't see it as a need for 'additional protection'. If you can show the state from which you've departed clear evidence that your habitual abode/centre of interests has shifted to some other definite place, the matter will hopefully end there. Also, the need to demonstrate this will diminish as time goes on -- the UK for example clearly distinguishes between fresh departures and those that have been gone for years. If you are really not tax resident anywhere, but have to show reams and reams of evidence, I'm not sure it's worth the hassle.

 

[JustAnotherNomad]

If you can show the state from which you've departed clear evidence that your habitual abode/centre of interests has shifted to some other definite place, the matter will hopefully end there.

Yes, hopefully. But if you’re from a high-tax country like France that has very vague rule, it can be a good idea to look at article 4 of the DTA as you mentioned. If the first tie-breaker is that you shall be tax resident where you have a place of dwelling, then that may help you. But then again, there is the MLI (Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting), under which DTA’s are being updated to replace tie-breakers with a “mutual agreement” clause. That would make it more difficult to move your tax residency to a low-tax country.

 

[DaveFischer]

I'm starting to get mixed feelings about which information I can trust and which I cannot. I kind of wishes I moved my tax residency last year to Thailand or the Philippines, when I was there. At least I would've already officially left my home country, which puts me at ease.

I'll just investigate apply for tax residence in Georgia and hopefully in 2 or 3 years, I'll be tired of flying and digital-nomadding around the world and I'll invest in a more permanent home base. I don't mind changing my tax home twice, it'll give me some more learning experience and it looks like there's not going to be a perfect long-term solution at this moment anyway.

Hong Kong is more expensive than London at ~£2000 monthly per apartment. Anyway, I won't be able to move back to Southeast Asia soon unfortunately, because I have 1 British and 2 American clients.

I find HK a good place for a digital nomad who wants to stay for three month periods in Thailand, Vietnam, Bali and other SEA locations. You only need to be at least once in HK every six months to keep your visa until you get the permanent residency. You only need to pay taxes for the work you do while physically present in HK.

Are you speaking about corporate tax or personal tax?

 

[JustAnotherNomad]

I kind of wishes I moved my tax residency last year to Thailand or the Philippines, when I was there. At least I would've already officially left my home country, which puts me at ease.

Many countries allow you to leave officially, without proving that you have taken residency elsewhere. For example if you want to sail the world for two years.

As for Thailand or the Philippines, both would have been less than ideal choices: Thailand only officially considers you tax resident if you spend more than 183 days there.And Thailand generally makes it very hard to take permanent residency there. People usually register for language classes or something similar to get a “student visa” - but after a few years at most, people usually get kicked out. Unless you get residency under a HNWI scheme or something similar.

In the Philippines, I believe it is next to impossible to get proper residency status at all, let alone tax residency. I have heard that government is so defunct that people stay there on tourist visas for years, even working locally in hotels.

 

[JustAnotherNomad]

Are you speaking about corporate tax or personal tax?

I googled this and it seems like applies to both corporate and personal income.
If it’s easily possible to take residency in Hong Kong, I would be very interested. I love Hong Kong. I also really like Georgia, but it’s a PITA to go there. Hong Kong is a major hub, I pass through there anyway a couple times per year.
Can you just rent a cheap place there where you won’t actually live (basically just a registered address) to meet the residency requirement?

 

[Konstanz]

I googled this and it seems like applies to both corporate and personal income.
If it’s easily possible to take residency in Hong Kong, I would be very interested. I love Hong Kong. I also really like Georgia, but it’s a PITA to go there. Hong Kong is a major hub, I pass through there anyway a couple times per year.
Can you just rent a cheap place there where you won’t actually live (basically just a registered address) to meet the residency requirement?

~2k EUR / month for a studio Not sure it's enough for residency for foreigner
I think Dubai is cheaper and closer to Europe... HK is a hub for Asians and prices are steep. Singapore is the same.

 

[JustAnotherNomad]

Do you need your own place though? Can’t you register your residency in a studio that you share with 20 other people? Or your service provider’s office?

 

[Marzio]

In the Philippines, I believe it is next to impossible to get proper residency status at all, let alone tax residency.

Philippines's SRRV Smile is one of the best choices if you are older than 35. Deposit $20K and you are done.

Haven't you seen Money Heist season 1? C'mon!

 

[JustAnotherNomad]

According to Google, you have to be resident in the Philippines for at least 2 years and spend more than 180 days per year there to be considered tax resident.

 

[Marzio]

spend more than 180 days per year there to be considered tax resident.

Once you are tax resident you can come and go as you want since the SRRV Visa is not imposing any minimum time spent there.

 

[JustAnotherNomad]

It seems like you have to spend 180+ days there every year to be considered tax resident. They probably don’t check it and will issue a tax residency certificate anyway, but then you’re back at the same stage as Georgia issuing a certificate without you even being present in the country.
What you’ll want is a country that considers you tax resident and ideally has signed a tax treaty with your home country.
Otherwise your new residency isn’t worth much.
I’m talking about a nomadic lifestyle here though, not living in the same place for most of the year.

 

[Marzio]

I’m talking about a nomadic lifestyle

So HK is a good option for you i guess.

 

[JustAnotherNomad]

Yes, like I wrote. Sounds really interesting. So does Georgia, but Georgia is just more difficult location-wise. But the how much will residency in HK cost?

 

[Marzio]

So does Georgia.

Why Georgia though? Aren't you required to stay 183 days a year there to be considered resident? Anyway if you find Georgia interesting it's not that difficult location-wise. You could fly there with Wizzair and Ryanair. The best option would be the direct fly from Milan Bergamo since from Milan you could fly basically anywhere in EU.

So it will be Tbilisi > Milan Bergamo > anywhere in EU and viceversa.

Right now a return flight from Tbilisi to Milan is 40€.

 

[JustAnotherNomad]

@marzio You didn’t read this thread, did you?
Georgia has a HNWI residency scheme where you will get a tax residency certificate without spending time in the country. You just need to make more than $90k per year if I remember correctly.
And yes, that’s exactly the problem. From Dubai and Hong Kong, there are direct flights to the whole world. From Georgia, you always have at least one additional stop.

 

[Marzio]

You didn’t read this thread, did you?

Not entirely

Georgia has a HNWI residency scheme where you will get a tax residency certificate without spending time in the country. You just need to make more than $90k per year if I remember correctly.

For Georgian tax residency purposes, the individual is deemed to be a high net worth individual if:
(i) the value of his or her confirmed property exceeds GEL3,000,000 (three million Georgian Lari), or
(ii) his or her annual income has exceeded GEL200,000 (two hundred thousand Georgian Lari) during the last three years.

In order to receive Georgian tax residency status under the Special Residency Regime, the High Net Worth Individual must also satisfy certain additional requirements. In particular, under the Regime, Georgian tax residency status is granted to a High Net Worth Individual only if:

(i) he or she has either a Georgian residency permit or Georgian nationality; or
(ii) he or she verifies receiving more than GEL25,000 (twenty-five thousand Georgian Lari) of Georgian source income during a single year.

 

[JustAnotherNomad]

Yes exactly. If you fit the income criteria, the rest can easily be solved by the service provider.

 

[DaveFischer]

I'm also pretty confident that in 3-5 years my personal situation will be extremely different than it is now. I might have met a latina girlfriend and might want a family and children, want to stop travelling. Right now the main priority is to get my own government off my back and getting comfortable with the whole offshoring. I'm completely inexperienced, aside from spending hundreds of hours reading, but I've always felt that doing something is different than reading about it. I work in IT, but it's really hard to learn some technologies, when you only reading and reading and aren't applying them in your professional career.

I am also unsure if you are renting full-time in Hong Kong to get tax residency, could they not claim that you live in Hong Kong and therefore your foreign source income isn't foreign? Hong Kong also has quite a complex enforced auditing I heard. There are a lot of countries that won't consider your income foreign sourced if you earn the money from a company you are operating in the country.

I can tell that JustAnotherNomad has a strong preference for countries with a good reputation. I can imagine why after having lived in some third world countries, where the government is basically the worst organized crime organisation of the country. However, one advantage that poor countries do have is that they seem very bad at enforcing their own tax regulation, whereas there are 100+ topics about UK contractors at contractoruk.com from contractors who lived 6+ months in Germany, invoiced through their limited company and didn't expect that their tax home would change to Germany. By the 183+ day mark for some magic reason, the German tax service always knows that you've been there for over half a year and you will receive a letter.

 

[JustAnotherNomad]

I am also unsure if you are renting full-time in Hong Kong to get tax residency, could they not claim that you live in Hong Kong and therefore your foreign source income isn't foreign?

Probably, but if you can prove that you don’t work in HK - which should be easy to prove as a nomad - then I guess it can work. You’ll probably need some substance in the other country, but probably not much. But of course you’d need to talk to a lawyer.
But I generally agree with you, which is why I think moving to a tax free country instead of a country with territorial taxation is the best option. Ideally a country that’s not on any black lists and that has signed tax treaties. The UAE is such a country.