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Brianthedog

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#1
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I've been looking recently at relocating to a 0% income & corporate tax destination (bahamas, anguilla, BVI) but the cost of living just seems out of this world when compared to countries that don't tax foreign sourced income (panama and belize cost of living for example, seems to be about a third of their tax free counterparts). I'm by no means a millionaire, but business is picking up and i should be bringing in around $10-20k a month from the start of 2021. My plan is for me and my wife to go somewhere for 5 or 6 years to save money, build the business further, and then travel the world. If I stay in the country where i am now, I'll be paying $4-8k tax each month on $10-20k income. Relocating to the Bahamas for example, where it seems a decent condo is $2500 a month, and seems that bills, groceries, alcohol, tabaco etc would take the monthly cost of living up to around $5k for 2 people, doesn't seem worth it, whilst i'm earning 10k a month.

When living in a country such as panama or belize, what's the best setup to ensure you don't pay income tax? Is it wise in those destinations to pay some income tax, to look legitimate? I'm a citizen of one EU country, and have been resident in a different EU country for 6 years, so i'm assuming the country i've been resident in, where i own a house will be asking some questions on departure.

I currently own a US LLC, so i'm assuming that income would be taxable in countries that don't tax foreign income, as it'd be like i'm earning it there; or is it the case that because i'm selling american clients vacations in the caribbean, they wouldn't see that income as being earnt in panama or belize for example?

Is there a way around that, such as an anguilla ibc & recieving dividends as opposed to salary? Or even just storing the majority of the funds in the IBC, not paying dividends, and paying myself a nominal salary?

Is it best just to suck it up, and move to the expensive 0% tax territor?
 
#3
Brianthedog said:
I currently own a US LLC, so i'm assuming that income would be taxable in countries that don't tax foreign income, as it'd be like i'm earning it there; or is it the case that because i'm selling american clients vacations in the caribbean, they wouldn't see that income as being earnt in panama or belize for example?
Click to expand...

That would depend on the specific country, there’s no universal answer to that question.
 
#6
Brianthedog said:
with regards to the countries I mentioned, how would that work?
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You’d have to talk to an accountant in the respective country, or ideally someone who already uses a similar structure.
With US LLC’s, UK LLP’s and similar structures, it is usually not quite clear if they should be treated as a corporation (0% tax?) or partnership (taxed as personal income) since most countries don’t have such a hybrid.
Most poor countries will probably leave you alone anyway.

The list posted by @hirenshukla2017 is not conclusive, there are many more countries that either don’t have taxes at all (Qatar, Oman, Bahrain, ...) or that don’t tax foreign sourced income. You’ll generally want to make sure you meet the criteria for foreign sourced income, some countries like Singapore can be quite strict about that.
 
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#8
Brianthedog said:
I've been looking recently at relocating to a 0% income & corporate tax destination (bahamas, anguilla, BVI) but the cost of living just seems out of this world when compared to countries that don't tax foreign sourced income (panama and belize cost of living for example, seems to be about a third of their tax free counterparts). I'm by no means a millionaire, but business is picking up and i should be bringing in around $10-20k a month from the start of 2021. My plan is for me and my wife to go somewhere for 5 or 6 years to save money, build the business further, and then travel the world. If I stay in the country where i am now, I'll be paying $4-8k tax each month on $10-20k income. Relocating to the Bahamas for example, where it seems a decent condo is $2500 a month, and seems that bills, groceries, alcohol, tabaco etc would take the monthly cost of living up to around $5k for 2 people, doesn't seem worth it, whilst i'm earning 10k a month.

When living in a country such as panama or belize, what's the best setup to ensure you don't pay income tax? Is it wise in those destinations to pay some income tax, to look legitimate? I'm a citizen of one EU country, and have been resident in a different EU country for 6 years, so i'm assuming the country i've been resident in, where i own a house will be asking some questions on departure.

I currently own a US LLC, so i'm assuming that income would be taxable in countries that don't tax foreign income, as it'd be like i'm earning it there; or is it the case that because i'm selling american clients vacations in the caribbean, they wouldn't see that income as being earnt in panama or belize for example?

Is there a way around that, such as an anguilla ibc & recieving dividends as opposed to salary? Or even just storing the majority of the funds in the IBC, not paying dividends, and paying myself a nominal salary?

Is it best just to suck it up, and move to the expensive 0% tax territor?
Click to expand...

I was 27 when I moved to the Bahamas for the same reason in 2009
The cost of life is indeed very expensive... and I think your math is far below the actual reality.

If you get a chance, check the "Case Study" I wrote here (you will have to use google translate from French to English):
https://www.infinitequant.com/fr/taxes-et-impots-bahamas
And look at the "Custom Duty" rate:
https://www.infinitequant.com/download/customs-rate-of-duty-bahamas-2018.pdf
Feel free to contact me in private if you want to discuss my experience (Consulting Session)
 
#10
marzio said:
Feel free to share publicly your experience, this is a forum.
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It would take a book to resume 11 years of permanent residency in the Bahamas :)
There is PRO/CON like in any country and will mostly depend on your own situation and what you like.

All I'm willing to share publicly I put in my Blog in French, the rest I'll do in private only.
If you have a specific question, feel free to ask.
 
#13
As you all know I will always push guys to the UAE. The UAE for example is relatively cheap if you do some research. A nice 1 bed flat in the Marina will cost about 10K per year additional bills and groceries no more than 1K per month.
Things are getting cheaper by the day because they are building more and more apartments and you can negotiate quite aggressively.

Other costs will be a company registration of about 10K initially and 5K yearly maintenance. So by default this is the ta you pay.
 
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#15
CaptK said:
Please list the Pros & Cons!!
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Again, this is very subjective.

For me, the Pros (in a world without COVID) are:

- proximity to the US (45 Min Flight to Miami, 2H30 Flight to NY)
- no income tax, no tax filing
- decent return on real estate investment
- I meet great people while in The Bahamas

About the Cons, it's mostly about the cost of living, and the fact it's an island, but I guess you can't have it all.
For me, it just works out fine, but some people come in and can't stand it for more than a few months for various reasons

On my side, I won't publicly discuss more CONs about a country that was nice to me and gave me so much...
 
#17
CaptK said:
As you all know I will always push guys to the UAE. The UAE for example is relatively cheap if you do some research. A nice 1 bed flat in the Marina will cost about 10K per year additional bills and groceries no more than 1K per month.
Things are getting cheaper by the day because they are building more and more apartments and you can negotiate quite aggressively.

Other costs will be a company registration of about 10K initially and 5K yearly maintenance. So by default this is the ta you pay.
Click to expand...
Are you a guy from UAE government? :) So much promotion for UAE
 
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#19
I
CaptK said:
As you all know I will always push guys to the UAE. The UAE for example is relatively cheap if you do some research. A nice 1 bed flat in the Marina will cost about 10K per year additional bills and groceries no more than 1K per month.
Things are getting cheaper by the day because they are building more and more apartments and you can negotiate quite aggressively.

Other costs will be a company registration of about 10K initially and 5K yearly maintenance. So by default this is the ta you pay.
Click to expand...
I like the idea of incorporating my biz in Dubai but the thing that freaks me is the headache related to opening a corporate bank account in UAE.
 
#20
Yoyo331998 said:
I like the idea of incorporating my biz in Dubai but the thing that freaks me is the headache related to opening a corporate bank account in UAE.
Click to expand...
Shouldn’t be a problem if you don’t go for the cheapest license. Get a proper physical office, even if it’s just a small room, and you should be good.
 
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