Comments by "Jeremy Barlow" (@jeremybarlow2291) on "Nomad Capitalist"
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The one big benefit Turkey offers with it's passport is their excellent consular protection as compared with many countries. If your Turkish passport was lost in just about any country that Turkey gives you visa free, visa on arrival, of e-visa access to, it is a safe bet you could walk into a Turkish consulate and obtain assistance getting a replacement passport.
The Caricom countries that offer CBI are personally lacking in terms of consular protection, but as member states of the British Commonwealth, the UKs extensive consular protection network offers similar benefits to the Turkish embassies and consulates around the world. Interestingly enough, the UK Commonwealth's extensive network of embassies is often useful for Canadians, Australians, and New Zealand because while the CNA countries of CUNA like the US are quite selective about who they allow to visit or reside in their territories, their embassy networks are no where near as extensive as the US or the leading European powers of the UK, France, or Germany. While it is unlikely anyone would obtain citizenship by naturalization in Singapore or Malaysia, it is good to know that the extensive network or diplomatic missions those nations which do not allow dual citizenship are backstopped by the UK's nearly universal network of diplomatic missions as member states of the British Commonwealth. Like the US, the UK's network of consulates has a few minor gaps in countries that are not likely to be high on anyone's list of places to visit, but there are some gaps, but Turkey has an embassy in most of those countries.
A lot of Latin American countries where you may obtain citizenship through naturalization fairly quickly have good consular protection, but not as extensive as Turkey or the British Commonwealth provides, nor as good as the US consular protection coverage generally although the US leaves something to be desired in a few places you might suspect, but they are countries where travel on an American passport would likely be a poor decision.
Citizenship in an EU country typically provides not only an excellent travel document, but also consular protection not only from your country of citizenship, but also every other EU country in the event your home country does not have a consulate in a particular country. This means that France or Germany will likely be able to provide assistance if your home country cannot.
I believe the consular protection considerations are something people should consider when obtaining a second citizenship, but also, something to consider when planning to obtain a portfolio of passports.
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Antigua & Barbuda is also part of the Eastern Caribbean States treaty with more expansive free movement than Caricom. Caricom has free movement to more countries, but only for skilled workers -which is a select category or professions, but also college graduates with I believe at least a bachelor's degree that must be authenticated and approved for classification as a skilled worker. The Eastern Caribbean States is less countries, I believe Antigua & Barbuda, St Kitts & Nevis, St Lucia, St Vincent & the Grenadines, Grenada, and Dominica are the ECS countries. Not all Caricom members have signed or been accepted as part of the skilled workers free movement regime, but all six ECS countries are part of it, as are I believe Belize, Trinidad & Tobago, Barbados, Suriname, Guyana, Jamaica, and I believe Haiti is part of the single market, but may or may not be part of free movement, and while Montserrat is part of Caricom, as a British Overseas Territory I don't know if they are part of the single market or free movement, and the Bahamas is part of Caricom, but I don't believe it is a participant in the free movement regime.
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There may be others, and we know for sure St Lucia and Comoros, and likely Antigua & Barbuda now. Serbia seems likely, Georgia also seems likely. Morroco and Angola being available visa free leads me to believe likely Russian citizenship because your wife is both Russian and Armenian, and you have said you would not want to obtain Turkish and Armenian citizenship because of the historical conflict there, but Turkish citizenship is not out of the question with your properties there. As your adopted sisters are Russian by birth, that seems likely, but it would also mean this needs updating because the country formerly known as Zaire, now is it Congo or Democratic Republic of the Congo has added e-visa access to Russia and Turkey. I mean both Russia and Turkey have e-visa access to Mexico, and a Colombian residency permit gets you access to Mexico too, so your Colombian residency explains that, but with the changes in African access for many passports in the last few months, I suspect this needs some updating whether or not I am correct. Some countries have lost some African access and others have gained some.
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If you can work anywhere & earn that amount, move to a territorial or zero tax country where you can get residence. If you work for someone else, make sure it doesn't make them tax liable where you live. If necessary pay taxes where you are at & with savings from the Foreign Earned Income Exemption save to buy a CBI, or move to a country where you will obtain citizenship & a second passport. You may even consider moving to an EU country where you can obtain citizenship even if you must pay the tax.
Once you have a second citizenship, your options become more open. If you are working for yourself and earning that and can work anywhere, get yourself to a tax free country like the UAE, you probably can't afford the pricier zero tax countries yet.
The first plan of attack should be figuring out how to get a second citizenship. If you have access to a citizenship by descent somewhere do the work and get that citizenship. If you cannot, then figure out how good your passport must be. Do you want a Tier A or is Tier B+ or A- good enough? Is Tier C good enough?
If you want to live in the Philippines long term getting a passport from even Ecuador with no access to Europe might be good enough for you. If you will never get wealthy, Argentina might be fine, because they have talked about a global wealth tax on citizens regardless of where they live and you cannot renounce Argentine citizenship. If you want to move to a zero tax country eventually, Portugal may not be the place because of their five year tax rule when you move to a blacklist country. They will say you are a Portuguese resident regardless of physical or family ties remaining in Portugal. Luxembourg will tax you a lot while you are there, but won't chase you when you leave. Sweden will chase you. Mexico consider you a resident as a citizen even after you leave if you have a home there. You have to examine the quirks and figure out what citizenships suit you best. the reason St Kitts is so popular as a CBI is because they don't tax you even if you live there, but may tax your company under the current rules if it is managed there.
I recommend reading PWC's reports on countries to figure out the broad tax rules there or Deloitte's highlights and looking at naturalization and residency rules for countries.
You should of course examine the visa requirements for citizens of the countries you might want to obtain citizenship from and understand they change. The US now needs a visa to visit Bolivia a few months ago that was not the case. Once you have it narrowed down, examine the short list more closely by talking with immigration and tax attorneys in those countries. Many will be able to meet with you by something like Zoom, many will not, but a phone call is possible. You need to get practical advice from professionals in the jurisdiction. You will also want to speak with a US tax lawyer who is versed in international tax planning and a similar US accountant especially if you have a US based business. The 2017 tax reforms made moving existing US IP assets most businesses have offshore, more difficult in terms of tax planning for example.
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Gitlab, Buffer, Automattic, Stripe, Zapier, Bandcamp, FlexJobs, just a few companies you may have heard of that were remote only and remote first from day one. You can start billion dollar companies that never have a set physical office, a few of them are on the list and they are not the only ones.
The only thing a business needs is a bank account, the right paperwork sitting in an attorney's filing cabinet somewhere a registered agent in your jurisdiction of choice, and perhaps a mail forwarding service to receive correspondence from the state, vendors, or customers and those do not require you to do much more than sign a low cost agreement with one of hundreds of mail forwarding companies around the world or registered agent service providers.
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Whether or not you are tax resident somewhere outside the US really depends on the rules of each locality. I mean Spain is going to do everything to say you are resident there. Thailand may not consider you a tax resident even if you have lived there two years on say the Thai elite visa. You have to examine the tax residency rules of each locality and structure your lifestyle, business and assets to ensure you aren't tax resident in multiple places, preferably for Americans structured in a way where you aren't tax resident anywhere else, or if you are tax resident somewhere else, it is in a country with a double tax treaty with the US that allows you to structure your affairs to avoid US taxes, and minimize the local taxes too. The US has a lot of DTAs and several Social Security Totalization Agreements that can prove helpful. The country where you decide to become tax resident in such a scenario would be one that it would be most beneficial to have its own Double Tax Agreements with the other countries you intend to spend time in, especially ones that make it clear qualifying for residency in your first choice excludes you from residency in the other place or places.
I mean the general rule would be a short term rental in a place like an AirBNB for 3 months is less likely to make you tax resident than a year long lease you only live at for 3 months, while a place you own and live at for 1 month a year is more likely to make you tax resident than the rental, or at least maintain a tax residency.
There are a lot of broad strokes that vary by country and general rules always have exceptions. I means for Americans the other thing to think about is are you still tax domiciled in the state you lived in before you left. You may be unless you properly severe ties and establish a nona fide residency somewhere else. In some instances it may even make sense to move to an income tax free state particularly one like South Dakota that allows you to obtain a driver's license with a one night hotel stay as proof of residency and a mail forwarder before leaving to severe ties with a state that will continue to tax you like New York or California. You may also need to get rid of storage units, and property ties like a vehicle titled in those states because they want to keep taking a pound of flesh as long as they can.
Exiting the US correctly is phase one. Using the foreign earned income exclusion and foreign housing exemption and foreign tax credits is step 2 of dealing with exiting the US. Not becoming tax resident in the wrong jurisdiction is step 3, becoming tax resident in the right jurisdiction if you must is step 4.
I've looked at the broad stroke tax guides published by Deloitte and Price Waterhouse Coopers for easily 50 or 60 countries to winnow it down to a handful of countries I would even think about becoming tax resident in and amongst those you still have to decide what the tradeoffs are and if the tradeoffs are worthwhile.
I mean the Bahamas, Turks & Caicos, Cayman Islands, and the UAE all have great tax rates at 0% for the most part, but a) do you have the capital to move to them, b) do you want to live full time on a island or in the desert, c) if you can afford one and want to live there can it help you get citizenship in a reasonable period of time if you want or need an alternative passport?
Then you look at a place like Argentina, the tax rate is terrible, it is difficult to exit it's tax net. It has a wealth tax too, but you can get citizenship there in a handful of years potentially and it is relatively inexpensive with a world class city in Buenos Aires and a multitude of climates in the country.
You look at a place like Belize, and it has a mediocre passport for the most part, a tax system that can be very favorable to you, but you wouldn't want to bank there and the Cayes seem relatively safe with the Caribbean beach lifestyle as does Placencia. It takes a fairly long time to get the passport at over 6 years, but it is a relatively easy place to immigrate to, and so are some other places.
You can move to Thailand or the Philippines relatively easily, but you are unlikely to ever get citizenship in either country and if you do, they are not great passports and dual citizenship is a no go for naturalized Filipinos. If you structure your affairs correctly you are unlikely to be liable for tax in either country even if you are there almost all year. It's not impossible to become tax resident in either country, but taxes can be avoided even as a resident with proper structuring.
Mexico has a great passport, it's relatively easy to move there if you have some location independent income, you can naturalize in about 6 years or so, but taxes are extremely high in Mexico and even with a double tax treaty with the US it has a lot of tax risk for a US citizen who becomes resident there and leaving can be hard with its own exit taxes.
Portugal has the NHR which can be beneficial for taxes, but you have to structure your affairs very precisely to benefit from it and you may have exit taxes to pay when you leave on capital gains. It has a fantastic passport which you can get in six or so years of living there, but you have to structure things just right not to get hit with high tax bills if you become tax resident there. If you can afford the golden visa investment you can be resident for the purpose of pursing the citizenship and may not become tax resident, but I think that to obtain the citizenship will involve spending more time there than the minimum to maintain the golden visa, but maybe less than the 183 days in 12 months to become tax resident, but you still might be found to have Portugal as your center of interest, and if that happened on the second year you were there, no NHR for you and really high Portuguese taxes.
All of this is to say the risk reward ratio. Has to be examined for anywhere you are considering and you need to know what does and does not make you tax resident. You also need to know the incentive options available to immigrants if any. You need to figure out it you want to pursue s citizenship by naturalization and residency anywhere or save up and obtain a citizenship by investment.
I mean Dubai is an expensive place to live, but it offers a pretty great tax benefit if you can afford to become tax resident there and can structure a company properly. If you structure trips to other places during the hottest parts of it's year, you can avoid the heat and maintain a tax residency there and with the tax savings maybe buy a CBI.
Figuring out what place interest you, what the tax rules for each place are and how to avoid residency where you don't want to be resident, or become resident in a favorable jurisdiction if you want that is about doing the research. PWC and Deloitte have good resources online to start researching the taxes. Wikipedia does a good job of telling you what countries have what visa free access where to help you figure out where it might be a good place to get a second passport. The next step after that is a lot more google searching and talking with local lawyers and accountants in the countries you are interested in.
This is not a one size fits anyone process.
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I mean if you have a residence in a tax friendly place with solid banking like the Channel Islands or UAE or Switzerland and you have ties with a country such as a permanent home -that is in fact a vacation home as opposed to your true habitual abode, a d that higher tax country has a double tax treaty with the residence you want to be your primary tax home it may well make sense to have your banking in that primary tax home. You will want to have your banking there, your driver's license there, your doctor there, you will want your children if you have any enrolled in a school there, you will want to make it clear under most treaties that where you have a residence is your center of vital economic interest and your primary banking account that you pay bills from, perhaps not all of your money, but your operational accounts for you personal life at the very least ie a current account that pays your living expenses should be there especially if you are for example a citizen of the country where you have a primary residence. The tie breaker rules in Malta's Double Tax Treaties with those three even more tax friendly places will not resort to where you are a national to decide your tax residence if your center of interest is clearly in the other jurisdiction. If that jurisdiction is a solid banking jurisdiction as Switzerland, Jersey and Guernsey or the Isle of Man, and the UAE are, then baking there makes a lot of sense to secure tie breaker benefits under a tax treaty. You don't want Malta to consider you ordinary resident and domiciled there when you could have your money taxed at a zero rate in UAE or a lump sum regime at a favorable rate in Switzerland or even a capped rate in the Channel Islands that is similar to the Swiss lump sum regime.
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@steveb7600 Monaco, Bahamas, Brunei, Kuwait, Bahrain, United Arab Emirates, Bermuda, Turks & Caicos, Anguilla, Cayman Islands, British Virgin Islands, St Barths, St Kitts & Nevis, Antigua & Barbuda, Vanuatu, are the ones I can think of off the top of my head, there are at least a dozen more that can be zero tax with proper planning and structuring of your affairs, including a lot of countries with very high headline taxes, that offer great incentives for immigrant tax payers.
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