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Tax-Free Life Set Up - Could This be Any Good?

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GenPro

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Hi guys, I decided to be open a little because I'm bored in a tax-free country.

One and a half years ago I made my first breakout in my online business after I had toiled night and day for many years. I am a digital nomad and I never made money in local currency in my life. So the first thing I did after success was to move my business and my residence overseas to avoid exorbitant tax rate. And I chose to live in a hot country with clean air and thankfully my health improved greatly in the last 10 months.

Now I'm pretty healthy again and I want to have life again. And here comes other issues:

I have residence in tax-free countries which don't provide what I want such as culture, cultural activities, various personal services, property types I like (plus highest oversupply of high-end properties in history), etc, etc.

Those tax-free countries don't provide vibrant and huge market for success. So no new offline business plans.

I'm in my 40's. I can live financially well-off just maintaining my current business and accumulating wealth. But there should be better life choices. I feel trapped: I do have cake but I cannot eat it.

I'm thinking moving out to Europe or USA five to ten years later. I'd rather pay tax for good life.

Or,

I will make good expat friends to have fun and live here happily ever after. Quietly.


Anybody living or dreaming tax-free life?

Any opinions?
 

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GlobalWealth

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Hi guys, I decided to open a little because I'm bored in a tax-free country.

One and a half years ago I made my first breakout in my online business after I had toiled night and day for many years. I am a digital nomad and I never made money in local currency in my life. So the first thing I did after success was to move my business and my residence overseas to avoid exorbitant tax rate. And I chose to live in a hot country with clean air and thankfully my health improved greatly in the last 10 months.

Now I'm pretty healthy again and I want to have life again. And here comes other issues:

I have residence in tax-free countries which don't provide what I want such as culture, cultural activities, various personal services, property types I like (plus highest oversupply of high-end properties in history), etc, etc.

Those tax-free countries don't provide vibrant and huge market for success. So no new offline business plans.

I'm in my 40's. I can live financially well-off just maintaining my current business and accumulating wealth. But there should be better life choices. I feel trapped: I do have cake but I cannot eat.

I'm thinking moving out to Europe or USA five to ten years later. I'd rather pay tax for good life.

Or,

I will make good expat friends to have fun and live here happily ever after. Quietly.


Anybody living or dreaming tax-free life?

Any opinions?
I know a guy.....lol

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I'm dealing with a pretty similar problem and I realized that I prefer paying some taxes (not high, but not the lowest either) in exchange for living in a country with good infrastructure, safety, etc. (and most importantly - where my family and friends are, as your relationships are the most important key to happiness).

I could probably set up some kind of a structure that would reduce my taxes but I'd have to sacrifice simplicity and freedom of staying here for however long I want so in the end I'd rather pay more and have an easy life not worrying about how to avoid the tax man.

If I were you - basically set for life from what you've shared with us - I'd probably focus on maximizing life satisfaction at this point. Taxes suck - I'm not a fan at all - but consider them a price you need to pay in exchange for the access to better infrastructure (which is the case in most, though not all, countries). Who cares that you can live tax free in, say, the Cayman Islands if you're stuck on an island the size of a small town and food prices, housing, etc. are several times higher than somewhere where you need to pay, say, 20% or 30% tax.

Please note that while moving to Europe, depending on the country obviously, can be easy/not that hard, moving to the US (permanently) will be probably difficult. Also, pay attention to the fact that none of the countries in Europe have such a hot and sunny climate as the UAE or Malaysia so you're sacrificing endless summer for other benefits.
 

Kak

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I am all for an aggressive tax strategy, but not at the expense of opportunity. My focus is on accumulation. Access to a large economy is worth some amount of tax to me.

Right now a low tax state in the US works for me. Will it forever? Maybe. A Bernie Sanders type would ruin it for me.
 
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Mutant

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Can you split the two? By which I mean keep your business one place, but move your residence elsewhere.

Depending on the nature of incorporation it could be that any money you want to save in your business to reinvest remains subject to the tax rules of that jurisdiction, and you would only have to pay income or other tax on any money you repatriate to where you reside (& you could look at taking money out as salary or dividends or other options depending on tax rates of your target residence jurisdiction).

Obviously there's a whole load of variables here, including the nature of your business (whether you can automate it, or it needs your personal boots on the ground), where you want to live, & what your citizenship(s) is/are (I hear countries like the US have a penchant for taxing you wherever you are).

The main thing is to focus on what you want out of the limited number of years we have on this earth. For a few, sticking two fingers up to tax collectors would be wholly satisfying, but to most - there are things that are more important. Keep perspective. The fastlane is designed to free you - not trap you.

It's not quite the same, but I moved away from where I grew up (still in the UK), & now live in London. Sure, the taxes are the same, but the cost of living is far higher. But the opportunities are greater, & I can earn more money, so I'm pretty sure it comes out net positive. And I love it. And don't forget the opportunity costs!

Try the sums. What would you lose in tax and (potentially) living costs? (x) What would you gain in lifestyle? (y) Would you pay x for y? If yes, then sweet! If no, but still unsatisfied - shop around...


[edit] Oh! & I forgot to say about also the possibility of splitting up your residencies, so you spend a certain number of months a year in a high tax/high lifestyle place, and other months in a low tax jurisdiction. Would it be enough to have half your time "being cultural" & half your time "sunbathing"? Would it be acceptable to split that still further e.g. quarter of your time in the US (or just under), quarter in Europe (or just under), etc. Could bring in a whole different set of rules you can play with - keeping your domicile in a favourable jurisdiction.
 
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Tommo

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Hi guys, I decided to be open a little because I'm bored in a tax-free country.

One and a half years ago I made my first breakout in my online business after I had toiled night and day for many years. I am a digital nomad and I never made money in local currency in my life. So the first thing I did after success was to move my business and my residence overseas to avoid exorbitant tax rate. And I chose to live in a hot country with clean air and thankfully my health improved greatly in the last 10 months.

Now I'm pretty healthy again and I want to have life again. And here comes other issues:

I have residence in tax-free countries which don't provide what I want such as culture, cultural activities, various personal services, property types I like (plus highest oversupply of high-end properties in history), etc, etc.

Those tax-free countries don't provide vibrant and huge market for success. So no new offline business plans.

I'm in my 40's. I can live financially well-off just maintaining my current business and accumulating wealth. But there should be better life choices. I feel trapped: I do have cake but I cannot eat it.

I'm thinking moving out to Europe or USA five to ten years later. I'd rather pay tax for good life.

Or,

I will make good expat friends to have fun and live here happily ever after. Quietly.


Anybody living or dreaming tax-free life?

Any opinions?
You've read TMF so try the Weighted Average Decision Matrix method in Chapter 24. Good luck.
 

GenPro

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@MTF @Kak

Anyway the true American entrepreneurs will stay in the US. I see so many opportunities there.
In case you haven't watched: Alain de Botton on meritocracy @ 6:00 It's interesting.
View: https://www.youtube.com/watch?v=MtSE4rglxbY&t=1s


@Mutant

Yes, I set up a company in country A, and I live in country B. I travel country A, C, D, E regularly. I'm originally from F.

The market I belong to is getting more and more stable and barriers to market entry is getting higher. So it seems like my business is becoming a goose laying gold eggs. But I'm not totally retired. I still work online to keep the score. Nobody knows the future.
 

Kak

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“You can’t have it all” was said in the above video.

In entrepreneurship, I believe to the core of my being that you can indeed have it all.

Other than that, yes meritocracy perfectly defines the USA. I disagree however that it is about position or education, but it is about what stuff you have.

This is off topic, but is interesting considering that video.

I have these two guys that work for me... yuppies... but good at what they do. One has a Tesla and the other a really nice BMW. My business partner and I were dying laughing the other day after a meeting at some white tablecloth place where the waiters put the napkin in your lap for you (BMW got to pick this one, my partner and I normally meet at a hole in the wall Mexican place) when BMW, after Tesla couldn’t say enough good stuff about his car, felt the need to make an excuse to Tesla about why he doesn’t have one. “I’m waiting until the autonomous driving gets better”. For f*cks sake... I would describe a lot of the yuppie type as high income and likely less than a year’s salary in net worth. Facebook is to blame for much of this shift from position oriented to stuff oriented IMO.
 
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GlobalWealth

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I consider tax minimization/elimination to be a morally sound endeavor.

Not everyone agrees with my view and that's ok, but I consider income taxation to be pure theft - plain and simple.

Of course it is difficult to structure your life in such a way to eliminate it, but taking legal measures to minimize taxes only leaves you with more disposable our investable income. And this certainly helps with the accumulation of wealth.

However there can also be opportunity costs based on your lifestyle. If living in a low or zero tax jurisdiction means you are not able to capitalize on certain opportunities, then that's the choice one must make.

I have personally found out much more interesting to live in such a way that minimizes my tax burden as well as adhere to my core set of values.

I have also found no shortage of opportunities living outside the US, even for opportunities located in the US.

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GenPro

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@Kak

Alain de Botton is an Oxford educated, VW Golf driving UK author who is inherited several hundred millions from his Swiss banker father. His father was successful as a banker but didn't like Alain's privilege as his son. So he keeps talking about education, status, 'you cannot have it all', etc. On the contrary American high school dropout Eminem rose from rock bottom to top of the world and loved his daughter dearly. Now Hailie turned out to be one fine lady. In future Eminem is likely to leave Haillie double 'several hundred millions' plus music royalties for generations to come. Definitely someone can have it all and become God, or almost.

Yuppies... they might need a revealing moment. I've never been material oriented but in the past I spent all my hard earned money in experiences: private education, traveling both cities and remote places, haute cuisine, etc. And by the time I was getting introduced to a newly 'filthy rich' family in London as their friend, I stopped all and came back to work and work only. I wanted wealth. It was the moment I realized the pattern of my behaviors did not properly serve my life.

@GlobalWealth

Actually this setup was not that difficult for me. I spent many years overseas. I only developed online business. But the difficulty level would vary from case to case.
 

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