Arbitrage as digital nomad

[Ajtothec]

Hey guys,
after getting in touch with TFM I decided to head into the fastlane direction in the long run and drop non fastlane businesses I am doing right now (especially affiliating). I do not want to quit from one day to another, actually it does not make sense for me.

Anyways, I am planning to grow my fastlane businesses in the next two years and then go abroad working as digital nomad with my GF (slowlaner of course). Main reason is the 50% taxes here and I want to see more from this world when I'm young. And I'm independent anyways so it's very much possible.

My question is: Are there any digital nomads at the moment that are operating without tax liability? I know it is tricky for US guys and luckily I'm from Europe. I would just need to proof that I'm not mainly living in my home country. As far as I understand I need to set up an offshore company in 0% tax states like Dubai, Seychelles, Cayman etc. All income needs to go there but I don't have to be a citizen of this country and could just get holiday visas and hop from country to country that you actually have no residence.

I'm sure it will be more complicated than that but I give myself 1.5 years, so enough time for preparation.
It would be great to hear some advice from you guys. Btw, my goal is not to live as cheap as possible as many digital nomads try, I'm ready to spend some money too.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[RazorCut]

You will find this has already been discussed in depth on several Affiliate Marketing sites as it goes with the territory (being able to run your business from a laptop anywhere there is a decent internet connection).

I'm surprised you haven't come across them. Or have I misunderstood your current business model of:

(especially affiliating)

 

[Ajtothec]

You will find this has already been discussed in depth on several Affiliate Marketing sites as it goes with the territory (being able to run your business from a laptop anywhere there is a decent internet connection).

I'm surprised you haven't come across them. Or have I misunderstood your current business model of:

I did but I'm more interested in experiences from fastlaners compared to webdesigners or translators...

 

[themaxx]

Google "perpetual traveler", and unless you plan on living in a tax free jurisdiction for the majority of your time it's quite difficult to pull off.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[RazorCut]

I did but I'm more interested in experiences from fastlaners compared to webdesigners or translators...

Web designers and translators don't tend to hang out much in dedicated Affiliate Marketing forums. Totally different ball game altogether in my experience.

 

[Phones]

Google "perpetual traveler", and unless you plan on living in a tax free jurisdiction for the majority of your time it's quite difficult to pull off.

Depends, he can stay up to 6 months in almost every country.

I'm getting my business ready for the move (meaning, zero payroll, no physical presence), all stuff outsourced/employees as contractors.

 

[Ajtothec]

Web designers and translators don't tend to hang out much in dedicated Affiliate Marketing forums. Totally different ball game altogether in my experience.

Well, affiliates are not really fast laners as well, that's why I wanted to start a discussion here on this forum. I'm aware of the fact that there are ongoing discussions in several forums too.

Google "perpetual traveler", and unless you plan on living in a tax free jurisdiction for the majority of your time it's quite difficult to pull off.

Afaik it's more the opposite for non US, especially for citizens of the EU. The way to go seems to set up a company in a tax free jurisdiction (formerly it was Gibraltar, thanks to EU it's not so any more), bank account in another state (Switzerland for example) and not living any where to be classified as citizen (stay tourist). Then there's no state that can ask for your real residency or for income tax.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[RazorCut]

Bobby @GlobalWealth would be the best qualified to answer your questions. Better to pose them directly to him here:

https://www.thefastlaneforum.com/co...r-global-wealth-protection.60788/#post-465915

 

[Nomangee]

For us in the EU, it's really a lot easier then for US citizens, but still not that easy. From my research I made, at least in Germany, you can't be a normal "tourist" to get to where you want to be. You need to have a real residence outside of your country where you live at least for 6 months in a year. So you can only jump from country to country, if you have one "home" outside for these months.

But I would consult an accountant, they should know all the tips&tricks, how you can do it the best way possible.

 

[GlobalWealth]

For Americans, it is not that difficult. The simple answer is to qualify for the FEIE (foreign earned income exclusion of about $100k + about $50k in housing allowance), you need to be either out of the US 330 days per year or establish residency in a foreign country and you can be out of the US only 240 days per year. Ideally you set up an offshore company so eliminate the need to pay the "self-employment" tax, get the $150k tax free and defer any excess profits offshore.

For non-Americans, the process depends on where you are from. For example, for UK or Canadian (or other commonwealth countries), you need to give up your residency status (not citizenship). To do that, you must become a resident somewhere else. Ideally, in a country that does not tax foreign source income like Panama.

I am working with 2 clients now. One is a UK couple. We are getting their residency established in both Paraguay and Panama (they want the 2nd and 3rd passports eventually) so they can give up UK residency. In their case, they live off investment income so we did the Estonian e-residency program so he can open his business and bank account there as Estonia does not tax dividends and non-Estonian residents pay no tax in Estonia.

The other client is American. We are getting their residency in Panama. We set up an offshore company as his income comes from around the world. We also set up a US LLC to receive income from his US clients. He will qualify for the FEIE but since he qualifies for the bonafide residency test, he can be in the US up to 120 days per year.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[GlobalWealth]

Google "perpetual traveler", and unless you plan on living in a tax free jurisdiction for the majority of your time it's quite difficult to pull off.

Not really. You just need to know how to structure your life and your business. You don't need to live in the Caribbean to pull it off.

 

[Ajtothec]

For Americans, it is not that difficult. The simple answer is to qualify for the FEIE (foreign earned income exclusion of about $100k + about $50k in housing allowance), you need to be either out of the US 330 days per year or establish residency in a foreign country and you can be out of the US only 240 days per year. Ideally you set up an offshore company so eliminate the need to pay the "self-employment" tax, get the $150k tax free and defer any excess profits offshore.

For non-Americans, the process depends on where you are from. For example, for UK or Canadian (or other commonwealth countries), you need to give up your residency status (not citizenship). To do that, you must become a resident somewhere else. Ideally, in a country that does not tax foreign source income like Panama.

I am working with 2 clients now. One is a UK couple. We are getting their residency established in both Paraguay and Panama (they want the 2nd and 3rd passports eventually) so they can give up UK residency. In their case, they live off investment income so we did the Estonian e-residency program so he can open his business and bank account there as Estonia does not tax dividends and non-Estonian residents pay no tax in Estonia.

The other client is American. We are getting their residency in Panama. We set up an offshore company as his income comes from around the world. We also set up a US LLC to receive income from his US clients. He will qualify for the FEIE but since he qualifies for the bonafide residency test, he can be in the US up to 120 days per year.

Thanks a lot, that was very helpful!
I can only talk about Germany as this is what I'm really concerned about and I assume it's similar to UK or Canada. Afaik, only the US is making it difficult because of their citizenship rule.

Anyways, what do you think when you do it all properly (as UK) but still own equity in a UK company or own real estate there. Is this really a risk? Everybody I asked said to cut it off completely but I do not see the point. I can own a house in any country in the world and rent it out. Don't see how this could hurt.

What are your thoughts on the tax free countries like Seychelles or Panama? What would be your top choice as someone operating fast lane businesses, mainly consisting of online services, ecommerce, etc.?

Anyways, I bookmarked your service and will take a closer look at it soon.

 

[GlobalWealth]

We do offshore corporate services in Anguilla, Belize, Seychelles and a couple of others.

Anguilla is best for 95% of people. We don't recommend Panama at all although my biz partner lives there and we do a lot of business there.

You can still own UK property and company shares. No issue.

You need to opt out of social system and close UK bank accounts though.


Sent from my SM-G900FD using Tapatalk

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Phones]

close UK bank accounts though

Could you briefly explain why ? Is this something specific to the UK?

I'm certain lots of Portuguese emigrants maintain PT bank accounts with residence somewhere else.

I will have to set up something similar to your UK couple clients as I still need an EU business to handle VAT related stuff.

Cheers

 

[GlobalWealth]

UK requires you to close bank accounts to give up residency. Their rule.

Portugal doesn't require the same of Portuguese citizens.

Sent from my SM-G900FD using Tapatalk

 

[themaxx]

Not really. You just need to know how to structure your life and your business. You don't need to live in the Caribbean to pull it off.

How do you avoid living in a country long enough for them to consider you tax resident? Surely you'd need to move every few months, or keep your primary residence in a jurisdiction with no tax?

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[GlobalWealth]

How do you avoid living in a country long enough for them to consider you tax resident? Surely you'd need to move every few months, or keep your primary residence in a jurisdiction with no tax?

That is almost impossible to answer.

Some countries it is 183 days. Some 60 days.

Some countries like Panama don't even tax foreign source income.

Sent from my SM-G900FD using Tapatalk

 

[eliquid]

Well, affiliates are not really fast laners as well, that's why I wanted to start a discussion here on this forum. I'm aware of the fact that there are ongoing discussions in several forums too.

Maybe not, but a lot of us affiliate marketers have 7-8 figures in the bank and want to live around the world and work when we want and know more about reducing our tax burden.

I wouldn't specifically hone my advice to only "fastlaners" who made the trip, but to anyone who has and has done so successfully with a good amount of money.

Not anything against "fastlaners", but there are lots of smart people outside the fastlane methodology who might know more about what you're asking. Don't cut yourself short.

 

[GlobalWealth]

Maybe not, but a lot of us affiliate marketers have 7-8 figures in the bank and want to live around the world and work when we want and know more about reducing our tax burden.

I wouldn't specifically hone my advice to only "fasteners" who made the trip, but to anyone who has and has done so successfully with a good amount of money.

Not anything against "fastlaners", but there are lots of smart people outside the fastlane methodology who might know more about what you're asking. Don't cut yourself short.

Aff marketers are actually great candidates for going offshore as it is very easy to "internationalize" the business and reclassify income.


Sent from my SM-G900FD using Tapatalk

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[themaxx]

That is almost impossible to answer.

Some countries it is 183 days. Some 60 days.

Some countries like Panama don't even tax foreign source income.

Sent from my SM-G900FD using Tapatalk

So my original comment is correct: "unless you plan on living in a tax free jurisdiction for the majority of your time it's quite difficult to pull off."???

 

[GlobalWealth]

So my original comment is correct: "unless you plan on living in a tax free jurisdiction for the majority of your time it's quite difficult to pull off."???

No. Difficult suggests that it is hard to accomplish. In fact it is easy to accomplish. You just need to do research to learn the best way to accomplish it. Or find someone to teach you.

 

[Boo Blizzi]

Maybe not, but a lot of us affiliate marketers have 7-8 figures in the bank and want to live around the world and work when we want and know more about reducing our tax burden.

I wouldn't specifically hone my advice to only "fastlaners" who made the trip, but to anyone who has and has done so successfully with a good amount of money.

Not anything against "fastlaners", but there are lots of smart people outside the fastlane methodology who might know more about what you're asking. Don't cut yourself short.

Ahh shit E... Im glad you chimed in. (been learning from your post and getting dick rolled on WF since 09)
I was about to say... I know some affs who make millions and truly live the internet lifestyle but have no idea what "fastlane" is.
I think the OP should look beyond clickbank and Amazon products and see how much money there is in lead gen arbitrage.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Ajtothec]

You guys are right, I should not cut myself to fastlaners. As already mentioned, I'm successful with affiliate marketing and this will be my main source of income when going abroad. So it's all right.

Anyways, @GlobalWealth, I think you know something about this:
What would you suggest is a "safe period" of time staying in your home country? Even if my business is international I have friends and family in my home country. As far as I know, as perpetual traveller you are supposed to stay only as long as you're allowed to as tourist. But there's something I don't quite understand. Because in Germany for example, it is defined that it is your domicile when you're 365/2+1 days here. That makes sense of course. I don't plan to stay that long of course but when you can restrict your visits to only 2 months a year, it's not that easy when using your domicile as your "hub" meaning to stay there for a couple of days before moving along.
Would be cool if you could share some insights.

 

[MTF]

Be careful, be very careful.

I've read about it quite a lot and researched the tax implications. Most internationalization experts will tell you stuff that's illegal, but since it's not them that will go to prison in case the government catches you, they don't care to tell you the truth (or they will tell you "relax, they won't catch you" - if you like living with this kind of uncertainty, then I suppose it's an option for you). Now, I'm not a fan of taxation at all, but I value my freedom more than saving money by evading taxes and risking punishment that would destroy my freedom.

First and foremost, I'm not a tax expert nor a lawyer. All I've learned I've read online from a wide variety of (usually more credible than internationalization experts) sources like articles written by tax attorneys. It's possible I'm wrong or at least overly cautious, or I don't understand things correctly.

Anyway...

The idea of not being a tax resident anywhere is NOT viable, nor possible if you want to run a business. There will ALWAYS be a country that will try to deem you its tax resident and most countries will not let you give up your tax residency until you have it established elsewhere. It's better to be a tax resident somewhere so you can protect yourself against paying taxes in a few countries (by utilizing double taxation treaties). In other words, your goal should be to seek the most optimal place for your tax residency, not try not to be a tax resident anywhere. This either includes countries with territorial taxation (you don't pay taxes on foreign-sourced income) or "pure" tax havens (with 0% personal income tax).

As for your offshore business - that's probably the biggest myth in this entire industry that you can simply set up your business in an offshore country and pay no corporate taxes. Sorry, it doesn't work like that. If you're the only owner of the company, your company will be taxed just like you - wherever you are a tax resident. If you have business partners, it will be taxed wherever the "brain" of the company is or wherever most of the decisions take place.

In most cases, such optimization (which needs to be set up VERY carefully by a tax attorney IN YOUR COUNTRY, not simply a guy who knows US/UK regulations) is very costly and in general doesn't make much sense for people making less than solid six figures a year.

Here are two articles to check:

Is your Corporation Really Tax Free? Flag 2: Residence

http://www.internationalman.com/articles/e2-80-9cwhy-i-set-up-an-offshore-company-e2-80-9d and this part which I found a rare gem of truth (most experts will tell you that the biggest advantage of an offshore company is to save on taxes, while it's rarely true):

PC: I think the main pitfall of an offshore company is the tax on profits aspect. A lot of people instantly think by having an offshore company they won't be taxed or they can hide their profit. This is not the case. While you can choose not to tell HMRC that your company exists (and if you never bring money into the UK this will probably work), but based on UK tax law you could well get into trouble. I did consider this but for me it doesn't work. I'd much rather be working on my business rather than fighting court cases, of which there have been many. I read the HMRC tax manuals and legislation extensively and came to the conclusion that the best thing to do was go by the book. Based on the UK tax rules for companies, if a company has its "mind and management" in the UK, then the company is classed as also being resident in the UK for corporation tax. This means if you live in the UK and make business decisions here you had better be ready for court if you don't register the company.

What this means for me is that I have to fill in one form each year—the CT600 Corporation Tax return. This is a snap as I have all the details from my books which are drawn up by my accountants. If you manage things correctly you can offset costs against this tax bill. By offsetting the cost of the offshore company itself, the costs of accountants and anything else the business pays out for, the corporation tax bill can be reduced quite significantly. These are costs you would have to pay out on anyway so why not use them to reduce your tax footprint and all within the tax law. Of course you should always speak to a qualified accountant and do your own research.

A second pitfall is that of dishonest companies that advertise their services for setting up offshore companies. Some will make all sorts of claims about evading tax and saving thousands, but when push comes to shove you will be the one in hot water, not them. They will have made a nice amount from the incorporation of the company already. So before doing anything, make sure you are dealing with a reputable company.

Also keep in mind the offshore jurisdictions’ own tax laws. Most offshore centres will not tax a company if it doesn't trade locally, so you only have to deal with tax in the UK. However, if you have chosen a jurisdiction that does tax you, make sure this country has a double taxation treaty with the UK — this will stop you from being taxed twice on any profit as the UK will take into account that your company has been taxed once already.

As for ceasing to be a tax resident in your country, many (if not most - sorry, I mostly researched this stuff for myself) countries will not only look at the time spent in your country, but also other things you do there. If the government can demonstrate your ties to Germany (and this can be the fact you return there every few weeks, have an apartment there, a car, a bank account, a girlfriend, etc), you are most likely a tax resident there.

Unless your TRUE intention is to leave your home country for good, it's not going to be easy to stop being a tax resident there. In other words, if you think you can get away with being a permanent traveler for a few months and returning every couple of weeks/months, it most likely won't work.

 

[GlobalWealth]

Would be cool if you could share some insights.

It really depends on the country. If you are an EU citizen, then just move between the 28 member states. Technically you can only be in any EU country up to 90 days before you must leave, but as an EU passport holder you can leave one day and return. Plus there is no way to check it.

If you are a non-EU citizen in Europe you can only be in a EU country 90 days every 6 months.

It really varies based on your citizenship and the country you are visiting.

Maybe @JasonR can shed some light on getting a 6 month residency visa in Indonesia.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[JasonR]

Maybe @JasonR can shed some light on getting a 6 month residency visa in Indonesia.

If you want to go to Indonesia for an extended stay you have a couple options. Having been through this recently:

If you're staying less than 60 days, you don't have to do anything other than show up in the Airport, present your passport, pay $35 USD, and you will get a 30 day tourist visa. You can extend this Visa at immigration for another 30 days for $35. Plan to spend a day at immigration. I've heard it can be busy. You will have to leave the country after 60 days. You will be fined every day you are over the 60 days.

If you want to stay longer than 60 days, you can do one of two things. Obtain a social visa, which you'll need a sponsor, and then you can stay for 6 months. However, you will need to have your sponsor renew your visa every 2 months. You will NOT need to leave the country or go to immigrations - your sponsor does the work for you. If you're interested in the social visa, you can find companies specializing in obtaining sponsors and taking care of the paperwork before you get here. This is very common I have a social visa, and\ I haven't even met my sponsor.

You can get a Tourist Visa, and then obtain a sponsor and social visa once you arrive in Bali/Indonesia. I do NOT recommend this route as you will have to leave and re-enter the country to get your Social Visa Stamp. I did this and it ended up costing a little more in the long-run, because I wasn't planning on staying for more than one month (originally). It is an option if you get here and want to stay.

Your third and final option is to renew your Tourist Visa every 2 months. All you need to do is leave the country, and re-enter, again paying a $35 fee. You'll also have to renew your tourist visa every 30 days. Flights are typically cheap to Singapore or Australia (I went to Singapore). You don't even have to leave the airport in Singapore if you don't want to - although Singapore is a pretty cool place and a good reason to stop over for a bit.

 

[kurisu]

Please delete

 

[Vigilante]

Please delete

Awesome first post!

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.