WEBVTT 00:00.000 --> 00:06.560 The idea of being able to legally be taxed nowhere on earth sounds like a pretty appealing way to 00:06.560 --> 00:12.120 keep more of your own money. Today I'm going to tell you how you could do that, why most people 00:12.120 --> 00:17.040 won't, and give you alternatives to how you can still dramatically lower your tax bill. 00:20.300 --> 00:25.860 So I've been telling you for 12 years you want to live in a tax friendly country or 00:25.860 --> 00:30.620 multiple tax friendly countries. You want to keep your options open. You want to have at least one 00:30.620 --> 00:35.900 second citizenship. If you don't qualify through your ancestry or other means, go and make an 00:35.900 --> 00:39.960 investment and get a passport in a matter of months, for example, from a Caribbean country. 00:40.160 --> 00:45.600 And you'll want to always make sure that you have lots of options. And so people start to put 00:45.600 --> 00:49.840 the puzzle pieces together and say, wow, it sounds like there's a pretty easy way that I could 00:49.840 --> 00:55.960 just not pay tax anywhere. Here's a question from Derek. He says, say I get St. Lucia citizenship 00:55.960 --> 01:01.160 by investment. You can do that in less than a year. It's going to cost you $200,000 now. It used to 01:01.160 --> 01:05.540 be $100,000 way back when I did it, but they raised the price as happens with this stuff. 01:05.680 --> 01:10.560 What if I get St. Lucia citizenship? Renounce my U.S. citizenship because the U.S. taxes 01:10.560 --> 01:15.360 people no matter where they live. We'll talk about that more. And do your trifecta approach 01:15.360 --> 01:20.920 in a way that I avoid triggering tax residents in any of the three? Is there something obvious? 01:21.160 --> 01:26.100 I'm overlooking here to not have to pay tax anywhere. So let's go through that. Americans 01:26.100 --> 01:31.100 are liable for tax no matter where they live. Now it is a bit more difficult and there's a bit 01:31.100 --> 01:35.660 more planning involved than there was before, but you can still dramatically reduce and even 01:35.660 --> 01:41.140 in some cases eliminate your taxes as a U.S. citizen if you live overseas. There's more 01:41.140 --> 01:46.340 rules to follow. There's forms to file. Certain banks may not want to take you. You have some 01:46.340 --> 01:50.400 restrictions, no doubt, but you can still dramatically reduce your taxes as an American. 01:50.680 --> 01:55.000 The average person will not reduce it to zero. And even if you did, there would be an opportunity 01:55.000 --> 01:59.720 cost in that you just couldn't move the money wherever you wanted. So when I renounced my U.S. 01:59.740 --> 02:03.340 citizenship, you know, I said to myself, okay, I want to make sure I have a number 02:03.340 --> 02:08.820 of home bases now for lifestyle purposes, for a certain comfort. And so I had more 02:08.820 --> 02:13.420 flexibility in taking money out of my companies and not in U.S. citizen to personally be able 02:13.420 --> 02:18.240 to go and buy property, which is a superior way to do it. Because I own a little bit of property 02:18.240 --> 02:23.500 in a foreign company that I bought as a U.S. citizen and nobody seems to understand why. 02:23.660 --> 02:28.460 It's a little bit of a pain every year to manage. Not a lot at this point, but it was a 02:28.460 --> 02:33.480 little bit of explaining of why would you do this thing? Oh, to satisfy the IRS. Oh, okay. 02:33.740 --> 02:37.560 So Americans have this extra layer. So what he's asking is, okay, let me get 02:37.560 --> 02:41.980 into the U.S. citizenship. Now I'm no longer liable for tax. If you're Canadian, British, 02:42.180 --> 02:46.740 Brazilian, Vietnamese, whatever, you don't have to give up your citizenship to get out 02:46.740 --> 02:52.400 of the tax net. You just simply say, I'm going to become a non-resident for tax purposes. 02:52.500 --> 02:56.700 And there's a process to go through, somewhat similar to the process for renouncing 02:56.700 --> 03:01.680 citizenship, except you're just basically giving up your tax residence. I do think 03:01.680 --> 03:07.540 other Western countries are going to follow the U.S. in the future. Australia's 03:07.540 --> 03:13.460 personal opinion. But anyway, you get rid of the citizenship in the U.S. So now you get rid of that 03:13.460 --> 03:17.520 tax liability. And then you get St. Lucia citizenship. Here's what people to understand is 03:17.520 --> 03:21.640 all the other citizenships, they don't tax if you don't live there. St. Lucia citizenship 03:21.640 --> 03:27.880 is by investment. You don't have to go. Now one thing they did do since I got St. Lucia citizenship 03:27.880 --> 03:34.120 was you do have to do an interview. But even if you had to go there, it's one interview. 03:34.120 --> 03:38.480 And so you're certainly not triggering tax residents there. So you will be a citizen of a 03:38.480 --> 03:43.260 country where you were never a tax resident. Now you can use St. Lucia citizenship to move to 03:43.260 --> 03:47.680 St. Kitts and Nevis, another country in the eastern Caribbean states. You can move to 03:47.680 --> 03:51.080 Belize as they're kind of opening up the caracom, the Caribbean community. 03:51.620 --> 03:55.240 Those could be tax-friendly countries. St. Lucia is not a tax-friendly country. 03:55.440 --> 03:59.240 If you live there, you never live there. And presumably you're not going to live there. 03:59.320 --> 04:02.800 You're getting as a passport in his case to replace the U.S. citizenship. 04:02.800 --> 04:08.600 And so what he's saying is, okay, on the citizenship level, I have no tax obligations. 04:09.100 --> 04:13.380 And that's correct. So that comes down to the residence level. Where do you live? 04:13.560 --> 04:17.860 Now most people live where they're a citizen. Let's forget the U.S. for a minute. Let's take 04:17.860 --> 04:21.660 Canada. You're born in Canada. Therefore you're a Canadian citizen. Your parents are Canadian. 04:22.240 --> 04:25.340 You live in Canada. Everything about you is Canada. Canada, Canada, Canada. 04:25.640 --> 04:29.280 You're not taxed because you're a citizen. You're taxed because you live there. 04:29.280 --> 04:34.340 Whenever you leave Canada, you're off the hook as long as you go through the proper exit procedures. 04:34.440 --> 04:38.240 And that might involve paying something. It might that be you just leave and never look back, 04:38.580 --> 04:42.820 which is why the sooner you leave, the better. Because if there's an exit tax or a deemed 04:42.820 --> 04:46.440 disposition or whatever they call it in your country, the more assets you have when you 04:46.440 --> 04:50.260 leave, the more you're going to have to pay to get out. But once you're out, you're out. 04:50.540 --> 04:55.240 And so a Canadian can keep the citizenship and move somewhere else. 04:55.380 --> 04:58.520 But what if you don't move anyone in particular? I didn't do this for tax reasons. 04:58.520 --> 05:03.380 I was just fascinated by the world. I've been to over 100 countries. I've learned a heck of a lot. 05:03.500 --> 05:06.780 I've made better investments. I've made better business decisions. I've 05:06.780 --> 05:10.700 hopefully become a more well-rounded person. I've met interesting people. I got, 05:11.000 --> 05:17.160 as a man, celebrating a 40th birthday party coming up. I think we've got 15 different 05:17.160 --> 05:23.120 nationalities at a 20-person table. So for me, taxes weren't the driver. But I realized 05:23.120 --> 05:28.340 early on, hey, this could be tax advantageous. There's something to offer to the nomadic 05:28.340 --> 05:34.620 capitalist viewer here. And so if you just want to travel around the world, theoretically, 05:35.100 --> 05:41.820 most countries, the non-aligned countries, the global south, emerging markets, these 05:41.820 --> 05:49.340 countries do not have entire rooms full of tax law the way the U.S. or other legacy 05:49.340 --> 05:53.820 brand countries do. It's pretty simple. If you live here, you pay tax. Here are the rates, right? 05:53.920 --> 05:59.900 If you'd be surprised, even in some smaller European countries, how simple the tax code is, 06:00.020 --> 06:05.240 how simple the tax forms is. I was talking, I met a client. It was a client three or four years, 06:05.380 --> 06:09.880 four years ago on the street. I was walking around Dublin, Ireland. He moved to Dublin, 06:10.060 --> 06:15.760 Ireland after our work with him was done. And he said, have you seen the tax return in 06:15.760 --> 06:22.480 Ireland? He said it's something like a child printed out from school compared to the U.S. 06:22.480 --> 06:27.660 I thought it was a joke. This is the tax return. So the next level beyond that where just, hey, 06:27.700 --> 06:34.440 we make it easier is we don't suck you in as easily. And so let's take Germany as an example. 06:34.880 --> 06:38.620 Germany is very strict. If you're coming from Germany, you've got to do things so by the 06:38.620 --> 06:44.680 book. And Germany, like many European countries, will try and find ways to suck you into the 06:44.680 --> 06:49.260 tax system even if you have not fulfilled the days test. So people think, oh, as long as I don't 06:49.260 --> 06:54.340 spend 183 days, they heard that somewhere. If I spend 183 days, I'm a taxpayer. Therefore, 06:54.480 --> 07:00.480 the inverse must be true. If I spend under 183 days, I'm not a taxpayer. Wrong. Developed 07:00.480 --> 07:05.040 countries with their rooms full of tax law have all sorts of different ways to suck you in. 07:05.240 --> 07:10.420 Did you spend more days here than somewhere else? Do you have a car here? Do you have 07:10.420 --> 07:14.200 available accommodation? Do you have this? Do you have that? Do the other? There's all kinds 07:14.200 --> 07:19.220 of ways they can suck you in and they can make, we had a client once. I think he was German in 07:19.220 --> 07:22.820 going to the UK where he had a girlfriend every weekend he'd go to the UK. And eventually, 07:22.980 --> 07:29.120 they somehow found his address in Germany. This is back when they were both in the EU. And they 07:29.120 --> 07:32.540 said, hey, can you prove to us you don't owe us taxes? It seems like you're coming a lot. 07:32.740 --> 07:38.700 And I think he did. And okay, he's paying taxes in Germany. No problem. But they'll find 07:38.700 --> 07:42.660 you. Now you look at most of the countries and this is what I always tell you. People who live in 07:42.660 --> 07:47.500 a Western legacy brand country think there's nowhere to go. Every other country is exactly the same. 07:47.660 --> 07:52.740 What's wrong? Just as about 120 out of 196 sovereign countries in the world are part of the 07:52.740 --> 07:56.760 so-called non-aligned movement. They're neutral. Leave us alone. We don't have a dog in this 07:56.760 --> 08:00.400 fight. We just want to get along with everybody. Crazy way to think, right? 08:00.720 --> 08:04.700 Somewhat similar are just countries where it's like, why are we making things so difficult? 08:05.200 --> 08:10.640 So for example, I have a home in Bogota, Colombia. At the time I did that, that entitled me to a 08:10.640 --> 08:14.680 permanent residence permit. And so that was an option for me. That was an additional option. 08:14.880 --> 08:18.780 And I spent some time there during the pandemic when that was one of the more open places 08:18.780 --> 08:23.340 for permanent residents. Maybe not for tourists, for permanent residents. And people think, oh, 08:23.360 --> 08:28.380 you own a home so you must be taxed there. Well, I'm not a tax resident. I don't spend a lot 08:28.380 --> 08:33.620 of time there. I go, I check in. I see what's going on in South America. It's a base 08:33.620 --> 08:37.900 that potentially I'll go and we'll make some Love Like a King videos coming up in the next year. 08:38.000 --> 08:41.400 We've got a number of places in South America. We want to film Love Like a King. So I'll go to 08:41.400 --> 08:46.000 Bogota. I'll get settled. I'll get acclimated. I'll get my wardrobe. You know, great. Here's my 08:46.000 --> 08:50.660 home base. And then we're taking the three hour flight somewhere nearby. And then back to Bogota, 08:50.960 --> 08:55.680 regroup all that. Nothing in that makes me a tax resident. And unlike Germany where they're 08:55.680 --> 09:00.120 scratching and clawing and looking for ways to suck me in, it's pretty simple in a country 09:00.120 --> 09:05.500 like that. Did you spend the 183 days or not? Now in some countries it could be 180 or it could 09:05.500 --> 09:10.380 be a little bit different. But my point is they have far fewer conditions. And so what the trifecta 09:10.380 --> 09:15.160 method was was when I was traveling around the world, I said, you know, if you like a certain 09:15.160 --> 09:20.600 amount of uniformity, pick three countries in the world, spend four months in each of them. 09:20.680 --> 09:25.200 And then your life's pretty easy. Pick one for the winter, one for the spring, whatever way 09:25.200 --> 09:30.360 you want to do it. My idea was I like Latin America, I like, you know, parts of Europe, 09:30.360 --> 09:34.100 and I like Asia. And I want to be part of all of them, not even for tax planning, just like, 09:34.120 --> 09:38.180 I like knowing what's going on. I like having a connection to all parts. You know, you land in 09:38.180 --> 09:42.860 one of these places. Oh yeah, I kind of miss Bogota. But what I realized was if all those 09:42.860 --> 09:47.240 countries were in that, you know, kind of global south, non-aligned, you know, in this case, 09:47.360 --> 09:52.580 just, you know, more tax flexible places, theoretically you wouldn't trigger taxes 09:52.580 --> 09:57.740 anywhere. And I think that potentially is true. You have to really understand the tax codes of the 09:57.740 --> 10:03.400 places you live. Columbia has a system where to maintain certain residence permits, you must spend 10:03.400 --> 10:09.180 188 and 80 days. To become a taxpayer, you must spend 183. And we had a guy, I think he comes 10:09.180 --> 10:13.840 to Nomad Capitalist Live every year, our four day event where we bring hundreds and hundreds 10:13.840 --> 10:17.760 of people from around the world to get together and network and share ideas. And we do four 10:17.760 --> 10:21.300 days of deep dive learning from our team and great speakers from around the world, 10:21.300 --> 10:26.460 heads of state speak. And it's just a great time, lots of entertainment. We were talking about 10:26.460 --> 10:32.900 threading the needle. You can spend 180 or 181 or 182 and don't miss. So you can live that way. 10:33.280 --> 10:38.040 Now, if you're entirely in crypto and you don't want a bank account, maybe that can work. 10:38.380 --> 10:42.580 The biggest challenge is if you want to bank or have a brokerage account, I mean, sometimes 10:42.580 --> 10:46.800 they don't even say hello. The question is, where do you pay tax? And the other thing 10:46.800 --> 10:51.760 there is, you might want to have a better tax residence than a worse tax residence. I mean, 10:51.780 --> 10:56.600 so people who have European tax residences sometimes have more banking options than someone 10:56.600 --> 11:00.720 who's a tax resident of a Caribbean island or an Eastern European country, for example. 11:01.040 --> 11:04.760 And so you want to have a tax residence if you want to be in the financial system. 11:05.120 --> 11:09.840 I mean, I suppose you could bank in like the Comoros or something where the banks, 11:10.060 --> 11:14.140 I mean, it's beyond a mess. And they're just so unregulated and they're not part 11:14.140 --> 11:18.380 of the information sharing. I mean, I guess you could do that. I think to a certain extent, 11:18.420 --> 11:23.300 if you're moving large amounts of money around, you know, moving money from the Comoros to, 11:23.620 --> 11:28.000 you know, you want to pay somebody in Singapore, the bank in Singapore is going to be like, 11:28.080 --> 11:31.940 yeah, we got to really look at this money from the Comoros before we accept this and 11:31.940 --> 11:36.020 you're going to have problems. So the bottom line is, thanks to what was first, 11:36.280 --> 11:40.940 FATCA in the U.S., which all the banks and foreign financial institutions 11:40.940 --> 11:45.360 tattled tail on Americans to the Treasury. Now there's the common reporting standard, 11:45.540 --> 11:49.100 CRS, and a lot of countries are signed up to that. Not all of them, but, you know, 11:49.160 --> 11:52.880 you want to have diversified banking, in my opinion. You want to have banking and some 11:52.880 --> 11:56.880 asset havens, Singapore, Switzerland, they're all part of that, and they're going to want 11:56.880 --> 12:01.000 to know where you pay tax. Now the answer is nowhere. That's bad. Now the one loophole 12:01.000 --> 12:05.320 that Americans have, which is kind of cool, despite the frustration of it, is that because 12:05.320 --> 12:09.460 you're subject to citizenship-based taxation, your tax residence is the United States, 12:09.460 --> 12:15.160 even if you don't live there. And so banks that do accept Americans might accept someone nomadic, 12:15.160 --> 12:21.440 where you otherwise wouldn't have a tax residence because your tax residence is the U.S. by default. 12:21.940 --> 12:27.180 There are tax residences you could obtain by spending one, 14, 60 days. Again, the one that 12:27.180 --> 12:31.340 you spend one day in might mean that certain banks don't want to deal with you. I mean, 12:31.380 --> 12:35.920 Swiss banks are difficult to deal with. You've seen our nomad capitalist R&D channel. We've 12:35.920 --> 12:41.240 talked about Singapore versus Switzerland, for example. Swiss banks are tough. They've got a lot 12:41.240 --> 12:46.260 of requirements to throw up roadblocks. That one-day-a-year tax residence, they might not like it. 12:46.540 --> 12:51.320 So what you might do in that case is you might do a modified trifecta, where you spend six months 12:51.320 --> 12:55.840 in the place that you like the most that happens to be tax-friendly, and then do three months 12:55.840 --> 12:59.660 and three months in the other two. And so you could find a country that has no CFC rules, 12:59.740 --> 13:03.820 i.e. tax-flexible. It could be a territorial tax country. It could be a lump-sum country, 13:03.820 --> 13:08.940 non-dumb country. Theoretically, some non-dumb countries might allow you to spend like 90 days. 13:09.440 --> 13:13.900 You could be, you know, so one 14, 60, 90 days could be the minimum, or you could find a place you 13:13.900 --> 13:17.800 just like, rather than spending four months there, you spend six months there. You get the tax 13:17.800 --> 13:22.360 residence as something that's not bad as it would be in the U.S. or Germany or Canada, 13:22.660 --> 13:26.820 but it's good. You know, if you're a tax resident of a country that doesn't have taxes, 13:27.460 --> 13:31.760 then, you know, that's helpful when it goes to going to a bank or a brokerage and saying, 13:31.760 --> 13:37.480 how do I pay my taxes? And so the part of this that really matters is, again, you're not going 13:37.480 --> 13:42.020 to countries that are part of the OECD, for example. Colombia is in the OECD, and yet they are, 13:42.320 --> 13:45.840 they have some of the lowest rates in the OECD. People don't think Colombia is a low tax, and 13:45.840 --> 13:50.320 they're not, but they're one of the lowest tax countries in the lobbying group of countries 13:50.320 --> 13:53.740 that bully people into raising their taxes. But, you know, generally speaking, you're not 13:53.740 --> 13:57.580 going to the other Western countries, legacy brand countries, because they will find a way to 13:57.580 --> 14:02.800 suck you in, just saying, hey, I spent one day in this country, but I spent four months in your 14:02.800 --> 14:08.020 country and I have a car here. Yeah, that one day tax residence is not going to cut it 14:08.020 --> 14:11.880 in a Western country. So this is really for people, if you really wanted to do it, 14:11.960 --> 14:17.980 you'd have to, you know, really accept substandard banking. Brokerage accounts would be 14:19.200 --> 14:23.380 difficult. Perhaps if you did some stuff in the U.S., they wouldn't bother you. Like if 14:23.380 --> 14:26.080 you said, hey, I'm going to, I'm going to, you know, open a brokerage account in the U.S. 14:26.080 --> 14:29.160 The U.S. is not part of the information sharing with the rest of the world, 14:29.440 --> 14:32.560 but you may still have an obligation to report that somewhere else. So obviously, 14:32.620 --> 14:36.180 we want to follow the law. But in the bottom line is this is for someone who wants to be 14:36.180 --> 14:41.400 entirely in emerging countries that are very flexible and just simple tax regimes where, 14:41.820 --> 14:43.980 you know, if you're there the majority of the time they tax you, and if you're not, 14:44.120 --> 14:47.260 they don't. But again, if you want to be plugged into the global financial system, 14:47.260 --> 14:52.640 that is the problem. So have a tax residence. This is not financial advice, but I think 14:52.640 --> 14:56.820 that's probably what most people want. And yet if you do that, I mean, we've helped our clients, 14:57.040 --> 15:00.820 you know, dozens of different countries. We have an entire back-end system where we're 15:00.820 --> 15:05.800 constantly tracking changes to the industry. We have, you know, alerts that come in just 15:05.800 --> 15:09.180 from trawling the Internet of, hey, this country's raising their taxes or this country's 15:09.180 --> 15:13.020 raising their taxes. We have all kinds of things that just pop up in our R&D and 15:13.020 --> 15:18.100 strategy team every single day of being on top of this stuff. So if you come to us, 15:18.100 --> 15:22.700 we can help you put together a plan where, okay, what do you want your life to look like? 15:23.100 --> 15:26.860 What sources does your income come from? Where should we structure your company? What kind of 15:26.860 --> 15:30.220 business is it? I mean, there's hundreds of questions we would ask you to figure out where 15:30.220 --> 15:32.840 you want to go and how you want to structure your life. And that's partially based on what 15:32.840 --> 15:37.020 you want in your life. And it's partially based on what the laws are. And we will work 15:37.020 --> 15:40.120 around that as much as possible to give you what you want. We'll also say, well, 15:40.160 --> 15:44.440 hey, you know, you need this. Go to nomadiccomplist.com slash apply if you want our 15:44.440 --> 15:50.620 help. It's the most holistic service. It is a one stop shop. We've got vendors and experts and 15:50.620 --> 15:55.300 everybody you need that works with us in our extended network. We also have a great team, 15:55.360 --> 16:01.260 again, of R&D and strategy folks that help build and execute plans. That's what we do for folks. 16:01.500 --> 16:05.460 So the bottom line is just because you can do something doesn't mean that you should. 16:05.900 --> 16:10.400 Having a good tax residence that still allows you to whatever amount of flexibility you want 16:10.400 --> 16:15.420 to travel and see the world is ideal. And hey, if you don't want to travel and see the world, 16:15.580 --> 16:18.760 there's plenty of tax residences where you can spend every single day of the year living 16:18.760 --> 16:22.820 in that country and you'll still dramatically reduce if not even eliminate your taxes.