Comments by "Marvin Fine" (@torontovoice1) on "Does the Trifecta Work in High-Tax Countries?" video.

@edwinlkenny6373 yeah that's very true, and you can't claim frustration of contract either, because the law is clear. That's why you need to have multiple passports, not residents permits. Because if you have a passport to the country, they cannot deny you entry. But if you just have a residence permit, it's very easy to deny entry, and if you have anything less than that it's even worse. You have no standing at all
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As usual, a very interesting video innovative, informative and as you pointed out, it's a topic that would take you hours to get into any detail with. But I've been grappling with this very same issue. It's an interesting thing about Canada that many people may not know is he actually have three designations. Residents, non-residents, and deemed residents. The third one's actually quite interesting because you can spend any amount of time in Canada and be treated as a non-resident, provided you are paying tax in a treaty country, in other words being a tax resident of a country that Canada has a treaty with. So I looked at Cyprus. They do have a treaty with Canada, and based on their non-dom program you only have to be in the country for 2 months and not in any other country for more than 183. So that would work for me. I also checked Malta and their regulation is quite different. You have to spend more time in Malta as your tax country than any other country. So that would be a problem with the trifecta because if you were 4 months and three different countries, Malta could not be your tax resident country. I also noticed that you mentioned that it becomes a little more difficult as you get older. I'm a little older than you, and I'm banging my head against the wall how I'm going to live in three different countries, especially if I get sick. But as usual, great video and well balanced. Thanks so much
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@Helena GG no I don't think that'd be a very good idea. My fingers would be sore describing all the reasons why not, but let me put it this way, it's a big hassle. And what's the point of having a place if it's not available for your full-time use. You may as well stay in a hotel. You're not buying it as an investment property, you're buying it as a place to live when you're in that country and for the convenience of being able to live anytime you want and not having to go to a hotel
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@guilhermesalesferreiradaco2934 you might want to spend a little bit of time and research the specifics of each country because they all change. Some countries use center of Life test while others use the days test. Or some use of combination of both. There's been a lot of legislation lately on many of these things so you need to be careful. But I don't think you can be a tax resident in a country without having a resident permit there. You might be able to get a tax number for a corporation as a foreign corporation, that's possible but I don't know how you can personally be a tax resident in a country and not be a resident there? Can you explain that? Which country do you want to be a resident of I mean a tax resident of?
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@guilhermesalesferreiradaco2934 I think when you go to Georgia, they give you a Visa for $364 days as a tourist. The tax residency is an entirely different story, you have to apply to be a tax resident in a country. You can be a tourist easily in most countries anywhere from 3 to 6 months at a time without triggering any tax residency, but all countries have different rules and the rules are getting tighter all the time. People used to live in Panama for 10-20 years without ever being a tax resident or even having a resident permit. And just take a bus trip to Costa Rica and come back and get another 3 months of the Visa they call these Visa runs. But today open up a bank account you need to tell them where your tax residency is, and banks for getting more and more difficult to open. So the whole situation with the trifecta is what countries they are. If their third world countries, it's probably easier because they just happy that you're there cuz you're spending money. The b countries are clamping down, the a countries are doing even more. Spain has just started doing a lot for example for people who claim to live in Gibraltar and there's lots of other examples. Where do you live now, and where do you want to live. I might know the answer
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@guilhermesalesferreiradaco2934 I think you can get a tourist visa for $364 days depending on which passport you have so if you enter a country on a tourist visa you're a tourist. I think Georgia has territorial tax anyway, so you're only taxed on income that you would earn in Georgia so all your foreign income would be exempt anyway. I don't know what you do for a living, but a lot of that would have an implication on your tax planning. I guess if you have a portable business, it might work well for you but you still need to have a tax residency somewhere. And the rules for each country vary so if you want to send me a private message on Facebook you can and I'll respond to you
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I think the immigration side is quite clear in most cases it's quite clear, and the tax residency issues are also pretty clear. I think the biggest question is one of lifestyle and philosophy. You mentioned in your previous video that you bought all your places and it gives you some sense of permanency, which makes complete sense to me. My concern is how would I look after a place where I'm only there three or four months a year? Could I give a blind trust to a third person to look after it for me? The laws and some of these countries are very archaic, cumbersome and difficult to enforce. You know when you study law, you read a lot of cases about things that went bad! You don't read cases where things worked out, because after all they wouldn't be a case. So what do you do with a dishonest property manager who starts renting the property out on Airbnb? Now you mentioned you keep the internet on and you can put cameras in, but you know a Polaroid in a clothespin can do wonders. What are you going to do if you find out God forbid that the guys doing that? That's only one of them multitude of things going through my mind. I don't think renting is any better because of the tremendous uncertainty that you have when you arrive at the place. So I think that's my biggest question and I really don't know if there's any answer to it other than you may say it hasn't happened to you. I think you also did mention that you have staff that go to these places that you have, so it's not exactly just an occupied for 2/3 of the year. But that's a real concern that I and probably other people have had.
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@wolfgangwust5883 that's exactly my point, how you going to look after a place where you're only there for a few months of the year. I would have real concerns about that, especially hiring a property manager that might rent it up behind your back, or worse. What about squatters rights? I was in Jamaica and I spoke to a landowner that called the army to clear out a bunch of squatters on his land. They cleared him out all right, and the next day they went to his house and burned it down.
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@blackmuslimconservative I don't think that's a problem owning a property in a place that you don't have a residence permit in. But I think most countries will give you a residence permit if you own property, you can correct me if I'm wrong though? Of course it also depends on the country.
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Well that's quite true what you said. The opportunities to do entrepreneurial projects in emerging markets is quite challenging and involves a lot of camaraderie if I could use that word loosely with government officials. You can't just go into a country and all of a sudden starts manufacturing things and hiring people without the blessing if you know what I mean of the government. Even then when governments change, they're can be challenges as well. So the bulk of the people that are thinking about being nomads or moving around are exactly the demographics that you described. There's a lot of people that are retired, but not necessarily at retirement age. So what they may be doing likely is passive investing which can take a lot of different forms. But if you don't need to be in a particular country to conduct business, why should you pay anywhere from 25 to 50% tax on the money you've already paid tax on. So whether you have capital gains, interest, dividends etc. So there's other examples of people going to emerging markets and getting into real estate but it has its challenges because of the local laws, sometimes the lack of regulatory oversight particularly when it comes to the right of title, right of ways, squatters rights, and the list goes on. In the case of rentals, it may be very difficult to evict non paying tenants. Even in the United States because of covid they enacted no eviction laws. So who's paying all the rent? And if a tenant stays there for a year without paying rent because maybe he had no job or maybe he just chose not to pay the rent to keep the money. How are you going to collect it? But most tenants are generally under capitalized, if they had money they probably buy a property instead. There is a certain price ownership which gives you a much clearer State of mind. Even if you move around, Andrew was very clear about the things that he does buying properties in all the places that he frequents. He did the hotel route and probably didn't like it despite the fact that the cost is substantially higher as well. But maybe if you can tell me what type of specific businesses you're interested in starting and what countries you're looking at I might be able to shed further light on the subject.
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@mattcavoto Yes I think you hit the nail in the head, that's really true. Opening up businesses in emerging markets has his challenges. And I remember another video that I watched not long ago spoke about not only the cost in lifestyle but the wages. So if you go to a high wage country like Switzerland for example, your cost may be higher, and your taxes will be there but when you calculate your total wages minus your expenses minus your taxes you might be further ahead doing that. I spoke with a realtor in Gibraltar the other day. So as you can imagine the cost of real estate Gibraltar is through the roof, not quite like Monaco but the very expensive. So all the workers, live in Spain where things are much much cheaper. And there's a dispute now as to whether or not Gibraltar it's going to join the Schengen area. But they're still a border in place temporarily and apparently they started wet stabbing all passports going in and out. So it might be a problem because there's only so many pages in a passport book and getting another passport give me very challenging at this time.
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@adam3504 it's a lot easier said than done. It's not only a matter of knowledge, but it's a matter of trust. Multinational organizations often contract with locals on the ground. I was at a seminar not long ago about Africa and they were talking about setting up factories in basically as Islands. Because there's no infrastructure, you have to go there and put in solar panels generators etc to run your factory. But if you don't have a local person that has skin in the deal. You come back a week later you won't even find the two by four left on the property as the presenter clearly described. So this concept of just going out hiring a bunch of people and things just go on autopilot is more a dream than a reality
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Well that's a very real possibility, so the best thing to do is just to comply with the rules and then you don't have to worry about tracking you.
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@wolfgangwust5883 oh I think it's even worse than that, but I don't have any personal experience with that. When I was inquiring about Panama, I spoke to a realtor and she told me that you cannot leave a place in Panama City unattended, in other words it has to be lived in. So you have to hire a live-in helper I could use that word to be there. Because otherwise, the entire premise deteriorates from the humidity etc. I also thought about that as well. How do you have different places all over the world. There's a simple answer of course, you hire a property manager. A reliable property Manager that goes in once a week cleans the place checks everything and make sure the property is kept in pristine conditions. Also you can't leave food there because you'll get the cucarachas if you know what I mean. But living in your own place is much nicer than staying in a hotel. So it's a trade off. I wouldn't buy a car. I did speak to people that own cars that were gone for 6 to 8 months and they deteriorate badly. The compressor seizes up, they rust, things break just from being not used. So I would rent a car or even better just use Uber or taxis. You can always rent a car as well when you have a whole bunch of places to go
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Yes that is the word literally. But don't forget he had a big problem, he was an American person. If you would have renounced his citizenship, he wouldn't have had half of these problems. But you need to tread carefully and know what you're doing and get proper advice, and stick to the advice that you get. The more money you have, the bigger at Target you become in every country. The IRS is not going to audit someone that has an income of $30,000 a year even if they did $20,000 cash, who cares! The time and effort involved and the amount they can get pales in comparison to the money they can get going after a whale. Now I'm not the suggesting that anyone do this don't get me wrong, I'm just commenting on the practicality of the regulatory arm of all countries. The bigger the tax return is, and the more irregularities they see in it, the more it's likely to invoke an audit. So the best thing to do is do things honestly, declare all your income and file the tax return accordingly. Even if there's a disagreement as to whether something is deductible or not, if it's declared, they're not going to assess you for huge penalties, especially if it's a an arguable mistake. So it's real simple, just tell the truth.
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And where would you be a tax resident? Obviously not in Canada so you can only be there 183. Would you choose Brazil or Italy? I don't know what the taxes are like in Brazil, that I know Mr bolsonaro is a nice guy even though he got covid and said it was all just a joke. It wasn't a joke when he got it. But seriously where would you be a tax resident? I think you'd probably be okay with the languages because Portuguese an Italian and Spanish are pretty close.
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@guilhermesalesferreiradaco2934 yeah that's what I was thinking exactly. I did look at the Italian flat rate tax program and it is $100,000 Euros flat or you can pay 7%, but you can only live in the south of Italy. Greece also has a similar program but there's always the island of cypress which has a much lower tax
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I think you did a video on it before, and I'm looking at doing exactly that right now. Who looks after all these properties when you're not there? I was told by a realtor in Panama that you can't leave a property uninhabited because the weather will destroy it. She told me you have to actually hire a living person to work there full time. Have you encountered anything like that? So how do you maintain the properties when you're not there? I think you have similar weather in KL if I'm not mistaken, I've never been there. I guess you could probably put all of the bills on automatic payment or come or even higher management company to look after things but I think there's a correlation between the cost of doing all that and the benefit of having a property that's available for you at your beck and call. But I couldn't agree with you more that having a property and a place to go when you land it's night and day compared to living in a hotel or an Airbnb. What do you do with all your cell phone plans, do you keep Sims active 12 months of the year so you can just open your phone up and change Sims whenever you go to a different country? What do you do for health insurance? What about property insurance, what are you doing things break such as air conditioners etc when you're not there. What do you do with your refrigerator? Do you leave it on when you're not there or do you disconnect it. How do you handle all the mail that comes in? The second area that would be interesting to cover would be a lot of the new regulations that are coming up vis-a-vis making you a tax resident in certain countries by staying so many days. And this is quite a changing phenomena. There are countries where you can stay only 60 days like Cypress, or even one day like Gibraltar and still be a tax resident. But there are other countries like Malta for example where you have to spend more time in Malta to be a tax resident then in other countries. So I think if you spend an equal number of months all over the world in other countries, you have a hard time claiming tax residency in Malta based on what the this lawyer told me. But that seems to be a theme in several countries where you need to spend more time in your tax country then other countries. I think if you became a tax resident of Cypress for example and opted for the non-dom and spend time in other European countries but I would keep Spain off the list, you might be okay. So it's quite an evolving area of law, and with the pandemic that has eaten the way so much of the world's capital, countries are struggling at ways to increase their revenue. Do they do it by increasing taxes? Not really, that's counterproductive because it will reduce their tax base likely. You know your magic works. So they have to find other methods to grab everybody like vat for example. But they look for other more creative ways like taxing people that stay in the country that are not on their tax base. I guess that could be counterproductive as well because if a lot of these so-called holiday type residence we're made less welcome, they might seek other places to live and you'll see a ton of real estate going on sale. All of these measures have counterbalances as you well know. The other thing of course is that a lot of the people that are looking for this initiative may not be in their thirties and forties or they may be slightly older like in their 60s. In that case, they worry about health. So what kind of monkey wrench do you throw into this initiative if you get sick you have to spend three or four months in the hospital, severely overstaying your number of days you're entitled to stay without becoming a resident?
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@Helena GG I think that would probably one of the worst things you could do is to put a property up for rent. First of all in emerging markets, you typically going to get bobcus in rent. And the grief associated with it, and not being able to have the property to use which is the whole purpose of buying it goes out the window. What were you thinking?
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@marcusberglund9105 yes I saw it and it was an excellent video
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@Helena GG well people buy properties for a number of reasons. The first one is of course convenience. Now I'm referring to properties that people want to leave empty for their exclusive use. Now when I say convenience, I mean you can leave your clothes there you know shouldn't leave valuables but a lot of other personal items that you need your phone charger pots and pans you know all these sort of necessities of a basic apartment so you so when you arrive you're all set to go you go to the grocery store buy whatever food you want and you get to eat exactly the way you like it. Maybe I'm more fussy because I like cook my own food. Now in addition to that you do have costs there's no doubt about it and the cost is relative to the cost of buying the apartment, the cost of the utilities and the cost of having someone maintain it while you're not there. I don't know how much people pay for apartments in these countries, but they're not the same as what you would pay let's say in the UK or Toronto or something like that, it's a lot less. Now, these apartments do offer a lot of convenience, but even more than that whenever you travel there are so many unknowns especially today with covid. By having a place that you know where it is ETC, it makes your whole traveling that much more pleasant. And if you're traveling for business, to meet clients etc in these places where you have apartments, it gives you the feeling that you're at home as opposed to a hotel that 10 million people have slept in, maybe not literally but it's in the back of your mind. So that's a cost certainly, but when you calculate the cost and the benefits, as long as you're using the apartment for three or four months a year, it's generally a good deal. Now the other thing of course is that people do also have an asset, that asset being the apartment. And most of the time but not necessarily always, these properties do appreciate the time. So you might expect an appreciation of anywhere from 3 to 5%, sometimes it goes as high as 10 come in an emerging markets they could be even more. So that's sort of the business case in my view of buying an apartment versus living in hotels. Now if you're only going to be in the apartment for 2 weeks a year, then you have to rethink it. The other thing of course is that I think Andrew also let his staff I use his apartment and they can sort of rotate it when they're there and when they're not there. When you add that into the equation, it really becomes viable, in fact I think if it's used in that respect it might even be a home run
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@guilhermesalesferreiradaco2934 that's quite an interesting question, but I don't think anyone can answer that in 15 or 20 minutes because it really depends on which country you want to go to. It also depends on what passwords you have and how much you want to spend on residency permits. You can't just live somewhere as a resident and without getting a residence permit. You can certainly visit most places 90 days sometimes you can get them extended but you're not a tax resident there you're only a visitor. You can only be a tax resident in one country from what I know. If you choose a tax residency of a country that has territorial tax like Panama Costa Rica etc and there's others I just use those as to examples then you don't have anything to worry about on all your foreign income because you won't be taxed on it and you can drift around the world wherever your passport will let you go. But I think at the end of the day you have to look at what you're doing for a living. For example if you're a freelancer and you work online, then you probably don't have too many problems because all your income will be foreign. You'll also you'll also have to register your bank account in the jurisdiction where your tax residence is. I don't know how incorporating helps you if you're not paying any tax in a jurisdiction, you probably don't have to file tax return to do anything. Some places like Panama require that you incorporate a company but I think they're changing that or that's the end of that program so it depends where you go.
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@marcusberglund9105 I think I did see that video but I don't think it explained in detailed how he's able to leave unattended properties for months. Unless that's not the case like I think he mentioned that he has staff staying in them etc. And some of these tropical countries like Mexico Malaysia Columbia etc. The apartment will deteriorate if it's not lived in. Just like in Florida you have to run air conditioning even if you're not there. Mold mildew and all kinds of other issues that take place when it's not inhabited. So I don't know how he does this am I presume you'd have to pay a property manager to maintain the property when he's not there and you got to give someone blind trust to do that
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@blackmuslimconservative that's really a no brainer. There's lots of countries that have territorial tax such as Panama Costa Rica etc if that's your flavor. The problem you have is trying to set up a bank account in one of these countries. Since many of them put on the gray list including Malta just recently, it's very difficult to open a bank accounts. So if you have a tax residence in a country that's a tax Haven, you might not find a bank that's wanting to do business with you. And you'll find other bankers particularly in Switzerland that will automatically freeze your account if they find out that you're involved in working with a gray listed jurisdiction. The world is getting smaller and since that new initiative where they've tried to get a major corporations that's pay a minimum of 15% tax, things are going to get even tougher. There's not going to be anywhere else to hide. And maybe when they do that the high tax countries may start relaxing some of their generous social programs and start to become more competitive. That remains to be seen
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Exactly. What you're talking about doesn't really fit with any of these things. The only occupations that work with all of these initiatives are people that have what I call portable jobs or portable businesses or their investors or retirees as you pointed out. If you open up a factory, that's where the center of life test comes in. I don't think you can run a factory hands off, maybe you know something more than I do
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