As a perpetual traveller and investor, this is the best nuts and bolts video on this topic I've seen. Well done Michael, as usual you're creating interesting and relevant content.
If you have the right amount of money, Georgia becomes a good country for a permanent traveler to establish a home base because of minimal time requirements to be in the country and a lack of CFC rules. It also potentially has some added benefits when operating a business through a US LLC for non-Americans provided they do not direct or control the companies operations from within Georgia, which means spending a fair amount of time in a country like Thailand or Costa Rica which do not use management & control for corporate residency. It becomes an ideal vehicle in many instances for people with a Caribbean CBI who can make use of the CARICOM Skilled Worker freedom of movement regime to hold directors meetings, but only directors meetings of a US LLC in Barbados because of the corporate tax residency provisions of the US-Barbados double tax treaty. Some of those tax residency provisions could also come in handy in some US double tax treaties for EU citizens holding board meetings in countries with similar tax residency provisions in their treaties. When place of incorporation rather than where board meetings are held determines tax residency becomes beneficial in those situations.
Absolutely fabulous Michael, thank you! Special thanks for the year's wonderful channel covering a diverse range of topics in a thoughtful and intelligent view point. Looking forward to following your amazing channel in 2022. Wishing you a relaxing happy Christmas and a nice slide into the new year. Bri
Great video Michael! That is a great alternative to 6+ months per year somewhere like Dubai. Working on my exit from Canadian servitude sometime in 2022!
@@OffshoreCitizen Due to recent world events, my number 1 criteria is now a country with a sensible approach to the sickness. No interest in having the authorities show up at my front door with a syringe in hand (lookin' at you Austria). I guess it is still a bit of a wait and see to know how the rules in each country are developing. Hopefully there will be some predictability by later in 2022. Outside of that, sunshine and warm weather, first world vibe, or a less luxurious feel that is offset by tropical scenery. And of course a sensible tax plan. Not necessarily zero, but not Canadian levels either. I think ideally it would be Dubai for tax residency and sunshine, not to mention the long list of things to do. May/June to Sept/Oct in a Mediterranean country, or perhaps Vancouver, then back to Dubai for the Northern winter season. Through in some travel during the twice yearly move and life would be good. I've been making good money in Canada, so I'm waiting to see how things settle out as I move everything online. I think an intermediate step might be something like this video's topic. Dubai is not the cheapest place to live, and if you're going to be there, you want to do it up right. I would rather spend a couple of years in a lower cost country as the revenue stream stabilizes from the growth of the online ventures. Having to grind it out and make decisions just to feed a big dollar lifestyle kills the creativity and the joy from the businesses. Though if I could see my crypto portfolio do a 10x in the next year... :)
I can’t get around one issue: if you’re a perpetual traveler, where do you establish your personal tax residency under this scenario? It’s clear where your business is taxed and where your PR would be (tax free country; no CFC rules country) but no clue where you plan to claim personal tax residency while constantly traveling. Tax residency is distinct from PR and most countries will still require 180+ days. Under this scenario, you are perpetually traveling to not incur any company holding or managing issue but this forfeits tax residency. It becomes unclear where you establish this then.
Another great one Michael, I am hopeful that I’ll be able to change my circumstances in the current macro bull phase that digital assets are experiencing. My near-term goal (1-2 years) is becoming a client of yours. Take care.
@@OffshoreCitizen I know the question wasnt to me, but I would be curious about income sourcing rules, maybe as a video. I know people who have salary income but choose to go to another country for less than 6 months are supposed to be in good shape not to be taxed by the 6 mo country in terms of tax residency, generally, but is there an issue with the fact that the income was earned while physically in the 6 mo country, regardless of tax residency? I think some countries might specifically give exceptions for this situation. Thanks for your videos. You are a credit to the internet.
Let’s say you spend 5.5 months in one specific country, 5.5 months in another specific country, then 1 month elsewhere. Let’s say you do this habitually, year-after-year. And you don’t have residence permits in any of these countries. If you pick the right countries, like without CFC rules and with territorial taxation, are you still considered perpetual traveler without tax obligations?
I did this exact thing leaving Canada with Thailand being my tax base this year. Then starting next year will be doing the 5/5/2 rotation. Is it correct that each year thereafter I don't need to establish another tax residence and just perpetually travel until I'm exhausted? Then return back to Canada, say 2024 and re establish PR. The time I'm gone travelling my assets accrue Tax Free? Thanks
### Summary of the Video: "How to Pay Zero Tax While Traveling the World?" In this video, Michael from Offshore Citizen explains a strategy to legally avoid taxes while traveling. The approach involves establishing residency in a country without Controlled Foreign Company (CFC) rules and setting up a business in a tax-free or low-tax jurisdiction. By maintaining a "perpetual traveler" lifestyle, you avoid tax residency in any one country. Key points include ensuring the business isn't managed from a high-tax country and having the company cover personal expenses like travel and lodging under business expenses. However, Michael notes that this lifestyle can be exhausting over time. ### Answer to Title Yes, there is a clear answer: it is possible to avoid taxes by combining a specific residency strategy with a nomadic lifestyle and a tax-efficient business setup. However, the approach may not suit everyone due to the demands of constant travel.
Yes depends on where you are from. The key thing is not being resident in your home country, which could require establishing yourself clearly in another country.
So when banks (or who is handling your money/income) ask where is the company UBO's tax residency, you say it is XY (Bulgaria). Bank exchanges your co's info with XY. Then XY can ask you why you didn't pay taxes (based on place of management or CFC) -to which you answer, "because I was abroad". Question is: Does it end there or XY might ask you, "then where are you tax resident"? You answer "nowhere (or in XY)" - and they say "so you pay tax to us" I mean -might they require you to proove you are tax resident somewhere else?
you pay tax where your company is located . earned money overseas becomes your company income personal income will be where you earned it, if you are resident /citizen of territorial tax country
No you don't necessarily have to be tax resident somewhere, it depends on what country you are from. It's possible for people from many countries to be tax resident nowhere.
@@OffshoreCitizen OK, but supposedly, when you open a bank account, you have to at least ASSERT a tax residence (even if you never have to actually file a tax return there).
Can a US citizen do this strategy with the FEIE? When you say "perpetual traveler" could that equate to staying in 2 different countries under 6 months each? or constantly moving around, which would get exhausting fast. thank you michael!
This is complete misleading as the tie break rules of OCSE double taxation agreements always fall back to citizenship when is impossible to define your de facto residence (which is a typical situation for a digital nomad), hence all what you said is likely wrong for the unlucky guys that are under OCSE ruling. In the end most likely your tax residence is where your citizenship is and most likely this country has CFC rules so you will end up paying personal income tax and corporate tax in your citizen country. Even UAE that you always refer to consider TAX Resident (please note I am explictily saying TAX RESIDENT) a person that live in UAE more than 183 days where on the other side to keep the VISA residency in UAE is enough to live there one day every six months. Translated this means that is not enough to move to UAE to zero your taxes but you need to actually live there or the risk is that you will be reverted to your citizenship as tax residency. It might be cases where you bought a house in your new residency that allow you to get away from this issue but in many countries that would not be enough and for sure the tax authority will challenge you to court to prove you are tax resident outside of your citizenship country.
No you're wrong. You misunderstand that tie breaker rules only matter if you trigger the residency rules in that country to begin with. If you don't trigger the rules it doesn't matter. Go watch our video on The Tax Residency Myth
@@OffshoreCitizen Most likely aggressive countries like Italy will definitely trigger the rule why the should not? In italy the notion of fiscal residence is quite open to include any interpretation. Think that if you say in public that you would like to come back to italy you risk to be considered tax resident in Italy. There are many court sentence that unfortunately bring back under the italian tax jusrisdition many people. On top of that if you live in a country such UAE there is the risk if your own country is european that you will be considered living in a black list country. Italy has its own list for residence black list and if you live in a country which is in the list in court is you that you have to prove that you are not living in Italy which reverse the juridical principal where the accusation has the duty to proof their thesis...
I'm calling BS on this. It simply is not true. He is talking INCOME tax. You're still paying a lot of other consumption taxes, fees, levies, company and visa costs.
@@caseybanana8114 No, he makes a good point, but he goes overboard. It’s not BS, but yes you should add up all the costs with this option vs. the option of making your base in a 0 tax country.
Can i ask you all these nomads paying no tax . Do you think its right that there using infurstructure paid by tax payers n they just get a free ride. Now if there channel earns very little thats fine but what if there 200.000 500.000 subcribers n earning a large sum
Subscribers don't correlate very well to how much money you're making on RUclips. And most digital nomads aren't making their money on RUclips. This being said, digital nomads aren't getting most of the benefits of living in a country (healthcare, education, social security, court system, etc). They pay VAT, tourism taxes, and spend into the local economy creating jobs. If local countries thought it was a bad deal they could easily adjust the structure of their rules and taxation to deal with it accordingly. What we're seeing is in fact the opposite. Countries are trying to make it more attractive to attract more digital nomads because conceivably they feel it's a good pay off. That should tell you something. What do you think?
@@OffshoreCitizen indonesia considers if there making money standing on indonesian soil from indonesian content there working n should have visa to do so n pay tax . They are also using roads goverment services etc etc which public taxes pay 4. If they earn very little they leave them alone some have been deported in the last 2yrs. And they are well aware of utube rates . Some utubers with large folowing make good money not just frm utube but various ways .
As a perpetual traveller and investor, this is the best nuts and bolts video on this topic I've seen. Well done Michael, as usual you're creating interesting and relevant content.
Glad it was helpful!
Michael, you have raised everyone's dreams and imagination. I agree one needs a base.
If you have the right amount of money, Georgia becomes a good country for a permanent traveler to establish a home base because of minimal time requirements to be in the country and a lack of CFC rules. It also potentially has some added benefits when operating a business through a US LLC for non-Americans provided they do not direct or control the companies operations from within Georgia, which means spending a fair amount of time in a country like Thailand or Costa Rica which do not use management & control for corporate residency. It becomes an ideal vehicle in many instances for people with a Caribbean CBI who can make use of the CARICOM Skilled Worker freedom of movement regime to hold directors meetings, but only directors meetings of a US LLC in Barbados because of the corporate tax residency provisions of the US-Barbados double tax treaty. Some of those tax residency provisions could also come in handy in some US double tax treaties for EU citizens holding board meetings in countries with similar tax residency provisions in their treaties. When place of incorporation rather than where board meetings are held determines tax residency becomes beneficial in those situations.
Absolutely fabulous Michael, thank you!
Special thanks for the year's wonderful channel covering a diverse range of topics in a thoughtful and intelligent view point. Looking forward to following your amazing channel in 2022.
Wishing you a relaxing happy Christmas and a nice slide into the new year.
Bri
All the best to everyone in 2022 - Happy Holidays!
Thank you!
Wishing you all the best and happy holidays :)
What about Canada as a base
Great video Michael! That is a great alternative to 6+ months per year somewhere like Dubai. Working on my exit from Canadian servitude sometime in 2022!
Always our pleasure!
What countries are you considering?
@@OffshoreCitizen Due to recent world events, my number 1 criteria is now a country with a sensible approach to the sickness. No interest in having the authorities show up at my front door with a syringe in hand (lookin' at you Austria). I guess it is still a bit of a wait and see to know how the rules in each country are developing. Hopefully there will be some predictability by later in 2022.
Outside of that, sunshine and warm weather, first world vibe, or a less luxurious feel that is offset by tropical scenery. And of course a sensible tax plan. Not necessarily zero, but not Canadian levels either.
I think ideally it would be Dubai for tax residency and sunshine, not to mention the long list of things to do. May/June to Sept/Oct in a Mediterranean country, or perhaps Vancouver, then back to Dubai for the Northern winter season. Through in some travel during the twice yearly move and life would be good.
I've been making good money in Canada, so I'm waiting to see how things settle out as I move everything online. I think an intermediate step might be something like this video's topic. Dubai is not the cheapest place to live, and if you're going to be there, you want to do it up right. I would rather spend a couple of years in a lower cost country as the revenue stream stabilizes from the growth of the online ventures. Having to grind it out and make decisions just to feed a big dollar lifestyle kills the creativity and the joy from the businesses.
Though if I could see my crypto portfolio do a 10x in the next year... :)
You're correct - it's been a wonderful year!
Haha hoping the next one will be even better!
@@OffshoreCitizen Yep! Merry Christmas and a Happy, Healthy and very Prosperous New Year to you and your family.
Excellent content like always, thank you Michael
Our pleasure! Thanks for keeping up
Anything you'd like to see next?
I can’t get around one issue: if you’re a perpetual traveler, where do you establish your personal tax residency under this scenario? It’s clear where your business is taxed and where your PR would be (tax free country; no CFC rules country) but no clue where you plan to claim personal tax residency while constantly traveling.
Tax residency is distinct from PR and most countries will still require 180+ days. Under this scenario, you are perpetually traveling to not incur any company holding or managing issue but this forfeits tax residency. It becomes unclear where you establish this then.
Another great one Michael, I am hopeful that I’ll be able to change my circumstances in the current macro bull phase that digital assets are experiencing. My near-term goal (1-2 years) is becoming a client of yours. Take care.
Thank you, Mark!
Looking forward to that 💪
What else would you like to see from us in the meantime?
@@OffshoreCitizen I know the question wasnt to me, but I would be curious about income sourcing rules, maybe as a video. I know people who have salary income but choose to go to another country for less than 6 months are supposed to be in good shape not to be taxed by the 6 mo country in terms of tax residency, generally, but is there an issue with the fact that the income was earned while physically in the 6 mo country, regardless of tax residency? I think some countries might specifically give exceptions for this situation. Thanks for your videos. You are a credit to the internet.
Let’s say you spend 5.5 months in one specific country, 5.5 months in another specific country, then 1 month elsewhere. Let’s say you do this habitually, year-after-year. And you don’t have residence permits in any of these countries. If you pick the right countries, like without CFC rules and with territorial taxation, are you still considered perpetual traveler without tax obligations?
Depends on the local residency rules. In most places you can be resident without spending 6 months
I did this exact thing leaving Canada with Thailand being my tax base this year. Then starting next year will be doing the 5/5/2 rotation. Is it correct that each year thereafter I don't need to establish another tax residence and just perpetually travel until I'm exhausted? Then return back to Canada, say 2024 and re establish PR. The time I'm gone travelling my assets accrue Tax Free?
Thanks
My lawyer said like that i want get residence in eu but i dont want pay tax he said spend less 180 days in eu and no need to pay tax
2:32 Le Monténégro n'a pas de règle CFC ???
[vérifier Thaïlande et Singapour]
### Summary of the Video: "How to Pay Zero Tax While Traveling the World?"
In this video, Michael from Offshore Citizen explains a strategy to legally avoid taxes while traveling. The approach involves establishing residency in a country without Controlled Foreign Company (CFC) rules and setting up a business in a tax-free or low-tax jurisdiction. By maintaining a "perpetual traveler" lifestyle, you avoid tax residency in any one country. Key points include ensuring the business isn't managed from a high-tax country and having the company cover personal expenses like travel and lodging under business expenses. However, Michael notes that this lifestyle can be exhausting over time.
### Answer to Title
Yes, there is a clear answer: it is possible to avoid taxes by combining a specific residency strategy with a nomadic lifestyle and a tax-efficient business setup. However, the approach may not suit everyone due to the demands of constant travel.
Literally me getting kicked out of the country that I'm currently living because of visa issues.
Michael: "how to do what you're thinking of doing"
Haha happy to read your mind 😂
What's your plan?
In our consulting call you recommended that I stay over 180 days in Thailand if doing this
Yes depends on where you are from. The key thing is not being resident in your home country, which could require establishing yourself clearly in another country.
@ Graham. He is correct on the 180day required to be able to establish tax residency in Thailand
Hi Michael, What if you are travelling all year with no base country, where would you have to pay tax ? Many thanks
ruclips.net/video/vJv_pohvYk4/видео.html
Have you seen this one?
Hi Michael! Would this strategy work well for owner operator truck drivers in europe who are crossing national borders every day for work?
Another great video Michael! Out of interest where do you base your self??
Dubai and Bulgaria over the last while
@@OffshoreCitizen I been to Dubai how you liking Bulgaria???
Are you a legal advisor or does your team also have accountants? Who can help in Mallorca?
Maybe I missed it but how can I set up an investment account if I am not a tax resident of any country?
So when banks (or who is handling your money/income) ask where is the company UBO's tax residency, you say it is XY (Bulgaria). Bank exchanges your co's info with XY.
Then XY can ask you why you didn't pay taxes (based on place of management or CFC) -to which you answer, "because I was abroad".
Question is: Does it end there or XY might ask you, "then where are you tax resident"? You answer "nowhere (or in XY)" - and they say "so you pay tax to us"
I mean -might they require you to proove you are tax resident somewhere else?
you pay tax where your company is located . earned money overseas becomes your company income
personal income will be where you earned it, if you are resident /citizen of territorial tax country
You have to be tax resident SOMEWHERE.
No you don't necessarily have to be tax resident somewhere, it depends on what country you are from. It's possible for people from many countries to be tax resident nowhere.
@@OffshoreCitizen OK, but supposedly, when you open a bank account, you have to at least ASSERT a tax residence (even if you never have to actually file a tax return there).
@@OffshoreCitizen thank you for clarification
would this work for Australians?
Is this doable with a thai elite visa?
Yes, but you cant do any work whilst in Thailand. Elite is like a high dollar tourist visa.
If get residence in country has cfc rules and stay less then 180 days a year need pay tax?
Could, depends on the countries and details. Best to book a call to discuss specifics
Why not just travel the world without tax residency anywhere, "without any base"?
(e.g. if you have a German pass)
You can watch this one ruclips.net/video/vJv_pohvYk4/видео.html
Let us know how you liked it 😄
what if you have a remote bookkeeping company not a travel co. ? how could this work...?
Gotta meet with clients; gotta go to business conventions.
Can a US citizen do this strategy with the FEIE?
When you say "perpetual traveler" could that equate to staying in 2 different countries under 6 months each?
or constantly moving around, which would get exhausting fast.
thank you michael!
2 countries probably not, and you wouldn't want to have a fixed base in each.
The problem for a US citizen is GILTI tax
This is complete misleading as the tie break rules of OCSE double taxation agreements always fall back to citizenship when is impossible to define your de facto residence (which is a typical situation for a digital nomad), hence all what you said is likely wrong for the unlucky guys that are under OCSE ruling. In the end most likely your tax residence is where your citizenship is and most likely this country has CFC rules so you will end up paying personal income tax and corporate tax in your citizen country. Even UAE that you always refer to consider TAX Resident (please note I am explictily saying TAX RESIDENT) a person that live in UAE more than 183 days where on the other side to keep the VISA residency in UAE is enough to live there one day every six months. Translated this means that is not enough to move to UAE to zero your taxes but you need to actually live there or the risk is that you will be reverted to your citizenship as tax residency. It might be cases where you bought a house in your new residency that allow you to get away from this issue but in many countries that would not be enough and for sure the tax authority will challenge you to court to prove you are tax resident outside of your citizenship country.
No you're wrong.
You misunderstand that tie breaker rules only matter if you trigger the residency rules in that country to begin with. If you don't trigger the rules it doesn't matter.
Go watch our video on The Tax Residency Myth
@@OffshoreCitizen Most likely aggressive countries like Italy will definitely trigger the rule why the should not? In italy the notion of fiscal residence is quite open to include any interpretation. Think that if you say in public that you would like to come back to italy you risk to be considered tax resident in Italy. There are many court sentence that unfortunately bring back under the italian tax jusrisdition many people. On top of that if you live in a country such UAE there is the risk if your own country is european that you will be considered living in a black list country. Italy has its own list for residence black list and if you live in a country which is in the list in court is you that you have to prove that you are not living in Italy which reverse the juridical principal where the accusation has the duty to proof their thesis...
So if I trade forex from my own yacht in international waters and the company is in a tax-free country I pay no tax?
Depends where you are from
Australia?
I'm calling BS on this. It simply is not true. He is talking INCOME tax. You're still paying a lot of other consumption taxes, fees, levies, company and visa costs.
You’re just being pedantic
@@caseybanana8114 No, he makes a good point, but he goes overboard. It’s not BS, but yes you should add up all the costs with this option vs. the option of making your base in a 0 tax country.
Sounds great until borders get slammed shut and you get trapped in one spot.
Lol
If you were to get trapped, what would be the ideal location? 😄
@@OffshoreCitizen hands down, Dubai
@@OffshoreCitizen Where do you think? I guess Dubai or another developed 0 tax country.
Can i ask you all these nomads paying no tax .
Do you think its right that there using infurstructure paid by tax payers n they just get a free ride.
Now if there channel earns very little thats fine but what if there 200.000 500.000 subcribers n earning a large sum
Subscribers don't correlate very well to how much money you're making on RUclips. And most digital nomads aren't making their money on RUclips.
This being said, digital nomads aren't getting most of the benefits of living in a country (healthcare, education, social security, court system, etc). They pay VAT, tourism taxes, and spend into the local economy creating jobs.
If local countries thought it was a bad deal they could easily adjust the structure of their rules and taxation to deal with it accordingly.
What we're seeing is in fact the opposite. Countries are trying to make it more attractive to attract more digital nomads because conceivably they feel it's a good pay off. That should tell you something.
What do you think?
@@OffshoreCitizen indonesia considers if there making money standing on indonesian soil from indonesian content there working n should have visa to do so n pay tax .
They are also using roads goverment services etc etc which public taxes pay 4.
If they earn very little they leave them alone some have been deported in the last 2yrs.
And they are well aware of utube rates . Some utubers with large folowing make good money not just frm utube but various ways .
Tax is always a crime, if you haven`t a contract with somebody on an agreement from both sides it is crime.