Five Ways to Pay Zero or Low Tax

hi I'm Andrew Henderson there are actually a lot more ways than you might think to where you can set up your life to legally pay either zero or very minimal amounts of tax most people think hey I have to go and live in Dubai and that's just not the case you can find different countries that will let you go and live there either part-time or full-time not have to change your lifestyle that much and be able to keep a lot more of your own money so let's start with the first way this is the most obvious way it is the zero tax country now these countries aren't always that easy to get residents in because so many people want to live there so whether it's the UAE if you want to live in Dubai whether it's many of the other Gulf countries Vanuatu Monaco these are countries that because they have zero tax they're often very much in demand so if you want to go to Monaco you need to put half a million euros in the bank and then you need to buy an apartment even a studio apartment in the bad part of town in Monaco is gonna cost a lot of money a parking space could cost half a million euros so that's gonna be expensive and that's why I think a lot of people should look beyond the zero tax countries because sure you could start a company in the UAE and you could go and live in Dubai is that really what the average person wants to do if they're coming from the West maybe or maybe not but it's definitely worth considering those zero tax countries but the reality is for a lot of people it's just not going to work so the second and second most obvious thing to do is to choose a low tax country and there are countries that if you spend six months a year there you're going to pay their tax if you spend less than that you won't pay their tax so you can use my trifecta method you can live in different places at different times of the year and you can legally not make that your tax home however what if you want to spend full time in a country low tax for many of us is better than paying thirty five forty fifty percent and so countries that I like Montenegro Panama countries like that where the tax rate a bulky area if you want to be in Europe Georgia has relatively low tax here's the issue if you can find a country that has not only low tax but has no controlled foreign corporation rules and I talked about that in a separate video you can find it here on youtube if you can do that then you can actually reduce the rate of tax below the headline tax rate because what you can do is you can say hey I'm gonna pay that tax rate on my salary but if I have extra money in the business that I'm not distributing that kind of retained earnings I can leave that money in my foreign company and there's not anything that forces me to bring that money into the country so therefore I'm paying 9% on 1/4 of my income for example and they'll be happy to have you to do that so there are plenty of low tax countries around the world and Dora is another one where you can go and you can buy real estate you can set up a company you can pay 10 percent tax this to me is going to be something that a lot more people will be doing in the future now the number 3 option is you want to choose a country that has territorial tax these are the countries that have tax normal tax rates sometimes the tax rates aren't even that low but they allow you to live there and only pay tax on your foreign or on your local source income so your foreign source income is going to be completely tax exempt this is Panama Costa Rica Nicaragua Georgia Singapore Hong Kong Malaysia Thailand so a lot of concentration in Asia a lot of concentration in Central America basically if you can get a residence permit you can live in this country and as long as in many cases it's not at all but in many cases you're not bringing that money in either the year it was earned or you're not remitting it in general then you're not going to pay a tax you leave your money over here you just bring in what you need to live on every country has different procedures Belize for example more in the favor of people who are retired Philippines has a program for people who are retired starting at 35 years old these are all territorial tax countries and some of them have more flexible regimes than others you know in Hong Kong for example very difficult to to get in there without starting a company that would require you to pay tax so they're somewhere it just doesn't work that well Singapore you'll need millions in order to get in this way so the Malaysia's the Thailand's the Panama's those are gonna be easier options but definitely if you can just basically contain your income or you don't need to be earning income in the country where you're living then you can pay very little tax the fourth option is something we don't really deal with a lot here at nomad capitalist this is the non doma styled status people often talk about this in the context of the UK where you're living in a country but you're not considered domiciled there and so there are certain restrictions on how you can run your business and what you have to do but basically in some cases you just pay a flat fee or in some cases you can pay nothing but you're not in domiciled in the country therefore you're not liable for tax on your global income so in some ways some similarities to territorial tax a more complicated issue for sure certainly you know in my opinion I look at going to emerging countries we're now ways the cost of living lower the taxes are lower for me not as interesting interesting of an option for someone who wants to live in a country like the UK it's a more complicated one that can be worth considering and the fifth option that really nobody talks about so much anymore this is more the tax strategy of the ultra wealthy which is lump-sum taxation Switzerland is very well known for having lump sum taxation where they say let us charge you a multiple of what it costs you to live so for example we'll charge you seven times your annual rent or the rent that you would be paying if you were renting and you just pay us that money and we'll leave you alone you can make as much money as you want other countries have recently rolled out regimes where they'll say you know pay us a hundred thousand euros a year for example and we've all just let you live here whatever you make overseas is not our concern anymore this is by countries who are looking to bring revenue in from wealthy people hundred thousand euros or thirty thousand euros places like Jersey or Gibraltar nobody would really go there probably if it weren't for these approaches and it's not like you're paying zero so you didn't need to be making decent money in order to make this make sense but if you want to live in generally more of a Western European lifestyle this is where you can just come in and they'll leave you alone so I think that you know Switzerland and some of the Canton's there have started to to phase this out Switzerland decided not to get rid of it a couple years ago but certainly there is some pressure because these countries are surrounded by more high tax countries where the high tax countries are arguing it's going to drain their resources I'm not sure where this is going in the future but it's certainly an interesting option to consider so those are five different ways that you can legally pay from zero to ten percent in tax depending on how much money you make it's also worth looking into the tax laws in each of the countries that you go to because as I said some of them don't have things like CFC rules some of them don't have things like other provisions that you might have in your home country to where it makes the tax policy more friendly even if the headline tax rate is higher I'm Andrew Henderson and if you're looking for a way to legally reduce your taxes build your freedom and create wealth faster as a global citizen then you've come to the right place I want you to do three things right now 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Channel: Nomad Capitalist

Views: 46,773

Rating: 4.9046154 out of 5

Keywords: nomad capitalist, go where you're treated best, tax reduction strategies, countries with low taxes, low tax countries, low income tax countries, zero tax countries, how to reduce tax, how to reduce tax for high income earners, how to reduce tax legally, how to pay less taxes, how to pay less taxes legally, how avoid taxes, how to avoid paying taxes legally, how to avoid taxes legally, us taxation, moving overseas, how to save money on taxes, avoid taxes legally

Id: UueYKYk93Yg

Length: 8min 13sec (493 seconds)

Published: Thu Mar 14 2019