How to Pay Zero Tax Living in One Place (Not for Nomads)

in all the years of nomad capitalists we've talked about many different ways to dramatically reduce your taxes by living overseas from traveling around the world as a nomad to my trifecta method of maintaining homes in three different places and splitting your time but what i hear increasingly from people not only starting large businesses but people who've already established themselves they have wealth is we don't want to be constantly moving we'd like the flexibility but not the obligation so how do you live in just one place and reduce your taxes i'm going to give you several things to consider right now [Music] hi i'm andrew henderson and here at nomad capitalist we help seven and eight-figure entrepreneurs and investors legally go where you're treated best from lower taxes to having second citizenships for more options you can learn more at nomadcapitalist.com and this is something that i'm increasingly hearing more and more especially as more deca millionaires sent in millionaires even billionaires come and work with us here at now met capitalist is andrew i don't i like the idea of being able to have multiple homes but i don't want to have the obligation that i'm constantly switching between them i personally like moving around the world it's not even a tax plan before i even learned about the tax benefits more than a decade ago of you know how tax residence works and the foreign income exclusion for u.s citizens i wanted the idea of living in different places i get a little bit bored i like sampling the best that each culture has to offer throughout the course of a year many people though feel more productive by staying in one place and so there's a couple different things that you can consider probably the most well-known options are you can simply move to a tax-free country now everything we're going to talk about today comes with the understanding that if you are from the united states or any other country that may decide to tax you extra territorially on your worldwide income you need additional tax planning to make sure that you're minimizing your taxes at home but from a perspective of where you're arriving tax-free countries are not going to add any additional tax if you do owe any at home so if you're canadian australian british what have you at least for now you can move to dubai to abu dhabi to monaco to vanuatu to many of the countries in the middle east and you can legally pay zero tax you can run companies in many cases in those jurisdictions so the uae for example has a number of free zones and so you can set up your company there that facilitates residents you can live in the country become a tax resident other countries have similar programs that's pretty straightforward but what i hear is you know andrew even if i could afford a 42 euro hamburger monaco is too expensive it's too small it seems a little bit too old money for me you know the uae is too hot i don't like certain things about it you know vanuatu where's that so how do you do it otherwise well the question is what is your tax budget you know i think that the idea of paying zero tax is certainly appealing but from a lifestyle from a human perspective you know if you're paying fifty percent now you might be willing to pay ten percent and say hey you know uh why not i think the challenge is when you go from 50 to zero and then getting back up to 10 because what happens is when you go down to zero you feel a lot more ambitious and you start growing your income a lot faster and then so you have a much larger pie on which to be taxed at some small percentage it may be better to consider paying something and so what you have is number one territorial tax countries like costa rica like panama like malaysia like singapore and others where you can go and your foreign source income is not taxed now in many of these countries we've talked about the past you have issues where are you bringing money into the country to live on that money could be taxed or are you doing a job working for your company how many other people are in your company there's different rules on the fact that you may need to pay some tax on your salary so maybe your company makes a million dollars a year you need to take a hundred thousand dollar salary and then that salary may be taxed at you know rates of 30 percent so these are countries that have taxation in countries like singapore it's relatively moderate georgia somewhat moderate and so you might be paying those moderate rates on just a much smaller portion of your income you may not be paying anything at all but everyone's situation is different and i've had situations where a guy could have paid zero living in thailand but he sent a bunch of money to thailand and now it looks as if that money was earned in the year it was remitted now we've got kind of a tax mess to clean up and so you want to be careful of that so those countries could potentially be taxed at zero there are also countries where they have tax exemptions where for a certain number of years you can pay no tax or pay no tax on most sources of income so portugal is well known for its nhr program certainly a good program for many people but you should be aware it's a little bit like swiss cheese there are some exceptions there are some exemptions there is a blacklist of where your company is set up so you're going to pay something if you're running an active business it may only be a few percent but if you're an active entrepreneur don't expect it to be a total ticket away from taxes other countries like uruguay have developed similar programs where for five years or ten years you're not going to pay other countries like ireland have non-dom tax programs where you can pay on money that's brought into the country foreign source income is in taxed other countries like italy and more commonly known switzerland have developed lump sum taxes where it may be a flat amount to pay or it may be negotiated with the country or based on where you're living in the country so go to italy pay a flight hundred thousand euros a year and hey it's up to you how much you want to make overseas right if you make 200 000 euros a year not a great deal if you make 2 million euros a year you're paying effectively 5 tax on all of your foreign income and as long as that foreign income isn't taxed where it's incorporated you've got yourself a pretty good pretty low tax rate and if you like living in italy probably a small compromise right you've got other places like jersey gibraltar again you pay one tax maybe you pay a tiny little bit extra like in jersey you might pay one percent extra on everything over the flat amount of tax it's gonna cost you about two hundred thousand u.s dollars a year to live in jersey places like gibraltar are certainly cheaper there are some far-flung islands whether it's sarc you know or others that they have programs that most people probably want to want to live in so that's one option you can consider and then from there you can simply consider uh you know low-tax countries and so you know find a country that has low tax find a country that has a simple tax code there are also countries where depending on how much you make you can pay very little on your business income so for example in georgia they do have taxes they do have some benefits if you set up a company you can defer the taxes i've never necessarily said incorporate in georgia as the best best place to incorporate however if you are a freelancer in georgia you can benefit from a one percent tax on a certain amount of gross receipts other countries like armenia are rolling out programs like that but you can also consider a country like montenegro you've got about a 9 tax rate and your entire income may not be subject to that because you've got a more simple tax code and so that's an example of a country that has a lower tax rate bulgaria more commonly discussed one a lot of europeans go to bulgaria to reduce their tax rate to around 10 percent with proper planning and so you can certainly find countries where the taxes are just uh quite low and we've seen on the corporate side some countries like barbados you know reducing their tax rates where they're actually regressive tax rates the more money you make the lower your tax rate goes down to one and a half percent and so there's a lot of places out there where you might pay a little bit of something but it might be worth it for you okay so that's kind of an overview of any of the programs you could use to spend all your time living in one country and not having to pay a tremendous amount of tax or potentially even zero if you don't want to stick to the you know qatar's the bahrains the uaes the monacos the vanuatus you can certainly focus on the panamas the malaysias the irelands the montenegros those are different options that you can use to reduce your tax bill obviously everyone's situation requires proper planning both in how you're sending money to the country how your business is running how you're personally living there are lots of factors that have to be analyzed but it is possible beyond just the tax-free countries of tiny little islands like antigua vanuatu or the hot desert countries of the middle east or the tiny countries like monaco it is possible to live in one place full time there are dozens of options with proper planning to dramatically reduce your tax bill how can nomad capitalists help you four ways number one subscribe to our channel and click the notification bell to make sure you get our new video every day number two get a copy of nomad capitalist the book you'll learn a lot of my personal experiences over a dozen years of studying this stuff as well as exactly some of the strategies that you can use to build your nomad capitalist plan number three if you're not sure where to start but you want to come and learn from my team and i you want to come and mingle with like-minded people learn more about our live conference nomad capitalist live it's coming up soon and number four if you want some help right now because you've got a burning issue you need something solved you want to lower your taxes get a second passport or build the nomad capitalist lifestyle of your dreams go to nomadcapless.com and click on become a client

Channel: Nomad Capitalist

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Keywords: nomad capitalist, go where you're treated best, multiple home, tax benefits of owning a home, tax benefits, living in different places, living in different countries, tax free countries, move to dubai, move to abu dhabi, move to monaco, zero tax countries, pay zero taxes legally, tax haven countries, tax havens explained, panama tax haven, taxes in malaysia, singapore tax system, georgia taxes, portugal taxes, lump sum tax, italy taxes, low tax countries, pay less taxes

Id: ltb3lJCd1mA

Length: 9min 33sec (573 seconds)

Published: Fri Jan 08 2021