avatar33

Anyone here a permanent traveler?

I wonder if you can own an online business and be a permanent traveler. Would your business still need to pay taxes in your home country?

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Groomez

Any thoughts on the 5 flags theory?

A handful of guys are.

sovereignman.com is a great blog too

geomark

Depends on your home country. U.S. citizens are screwed.

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crackp0t

Gotta love taking advice from domestic terrorists.

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avatar33

I think the main problem is your business' bank account location. If you're a PT and you move your biz bank account to a financial haven like Panama or Belize, you should be able to avoid US taxes. Amirite?

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eliquid

you have never investigated this i see

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Benji49

You need a good accountant and lawyer to do this which costs money which means you should be confident of making six figs (ballpark) for a number of years.

I looked into this years ago. It's non-trivial. Like with the US, there are special requirements for US citizens that don't apply to any other citizens of another country in the world.

For Canada, it's different, you have to paid a 25% exit fee and you can't spend more than 186(?) days in the country ever again.

Don't flame me if I get any of the specifics wrong, just trying to throw out examples.

In short, it's complicated, you need professional advice which is not cheap, and if you have a bad year you're sorta screwed stuck in a shitty country that is maybe not too comfortable for broke ex-pats.

And just to twist the thread around and piss some of you guys off, what the problem with paying some taxes in your home country? I live in Canada, which a lot of you guys think is run by communists, and until I make more $250 a year, my effective tax rate is under 20%. It's called incorporation, income-splitting, and averaging your revenue between good and bad years.

Maybe it would be good for some of guys to spend some time overseas in a shitty low-tax nation where the palms have to be greased, 10 years in jail for a quarter ounce of pot possession, and the locals don't like dumb arrogant whiteys. At the least it would cut down on the number of bitchy threads I see all the time about how tough it is to live under Obama/Bush/whatever politician is in charge.

BRB_fapping

I did this for some time so I happend to accumulate lots of knowledge about that.
you can shoot me a PM if you have any particular questions but be aware my view is quite different on this topic (I fuck this 5flag BS etc)

first when you are a US citizen you are obviously fucked lol. unless you think you are gangster and give up your citizenship + hide your monies in some offshore trusts or some shit "BECUZ NOBODY CAN KNOWZ ITS MINE MONIES HURR DURR". although I never got professional advice here since i'm non-US

general things:
-if you have less than $10mil it's not worth to do this as an asset protection strategy, because when you get fucked you will keep your monies but still be fucked
-if you want to make the "hotel life" be prepared to spend $10k-$20k a month easy
(multiply hotel rate times 2 is good way to go (tips, hotel-food, laundry, minibar, internet, etc))
-living in a 400sqft hotel room sucks ass
-you will be unproductive as fuck
-you still won't be james bond

I really would recommend that only to people who have their business already established and some kind of passive income.
TBH I only would really recommend that for retired ultra-high-networths who have no biz to do and too much time on their hands.
+ as long you have to work, traveling is no traveling, rather be a homeless bum lost in the world.

eliquid

There is an exit fee for Americans as well and you can visit, but spend no more then X days in the county afterward. I dont have my notes in front of me so I am going off what I remember.

I do agree you need to be making a good sum of money from this. I would venture to say mid 6 figures at least. The reason being is yes you have bad years that hit you, but lets do some math here. I am again basing this off what I remember but someone that is top income bracket is at around 36% and then state taxes ( mine was 6% ). I am also doing some general math here as I also dont have a calc in front of me or my notes, but I know normally you have so much % of self employment tax up to X amount of dollars too. Fuck it, here is generalizations:

1. You make 500k year 1. Basing it off 36 + 6% thats 42% which is roughly like 210,000 you would pay in taxes.

2. You make 500k year 2. Again 210,000 in taxes.

^^ this is assuming also no change in the tax codes. Thats 580,000 of money you have left over in 2 years time. If your living in Thailand or lets just say Belize or Panama and your spending up the entire 580,000 you made in 2 years, then you deserve to be broke in your 3rd year if you have a really bad year.

However, lets do this as offshore ( lets minus all the american headache part of this ).

1. You make 500k year 1. Even with we base this on a low tax regime instead of a 0 and do 10%, thats only 50k in taxes you pay.


2. You make 500k year 2. Even with we base this on a low tax regime instead of a 0 and do 10%, thats only 50k in taxes you pay.

^^ Thats 990,000 you keep in your pocket. You should be spending WAY less then 150k a year in Thailand or Belize or ( replace with other tax heaven in 3rd world country ). When you have a bad 3rd year, you can ride this shit out pretty fucking well. You could have 5 more bad years and ride the fucker out.

Its not always about taxes though. I prefer less paperwork, less headache, and less oversight with offshore companies in the right country. I also prefer privacy as well in my personal life.

If you pick the right country, you dont have to live the "hotel life" and can easily get a beach side condo or villa for less then 500k. You can get non beach for way less as well.

Your internet may be so-so and so will lots of other things, but if you ever grew up in rural America then it would be no different then that.

I do not suggest this for someone with less then 2-3 years of making less then 500k and I for sure do not suggest this for someone making a steady 80k a year.

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BRB_fapping

@eliquid, sure, well you have to draw a line between 'permanent traveling' and 'moving to a different country'
i'm sure you can do the later and save some monies,
I myself made the experience that there is a clear tenedency to spend -a lot more- when leaving the homecountry, no matter how you do it.

when you discuss about this topic, I think it's a huge topic where you easily don't look at the whole picture and thus can easily have a strong bias to some position.
after all i'd say it's a making money VS saving money decision

eliquid

its true I missed the point of perm traveler and just moving to a diff country, but even if you did this within your own state/country, constantly moving require a shit ton of money to pull off compared to having a home base in a different area.

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avatar33

Minimum 10 million? WTF man... If you want to live the luxury life maybe, but what about someone that just wants to live a normal life, rent a one-bedroom and chill with the locals. Get to experience the local lifestyle. In Asia the cost of living is ridiculously cheap, beer and food is cheap and transportation is cheap (except Japan, S.Korea and Singapore) ... Same goes for most countries in Eastern Europe, South America & Africa.

Thinking you need millions to do this is BS. I started this thread because I'm worried about the legal/tax aspect of running a business that cannot be "moved" as easily as myself... money is definitely not an obstacle to do this. If your biz is giving you a good life at home, there's nothing to worry about as 90% countries are cheaper than north america.

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eliquid

^^ this. You could always just rent for 2-3 months and then move again.

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BRB_fapping

avatar33, I was talking about going offshore -just- to protect money

/edit
(say hiding in a shit country for the rest of your life, I think that would only be worth it with >$10m

jenzkc

this.

unless you plan to rent an apartment and stay in each place for 3 months (which i also plan to do).

Groomez

Go ahead and explain yourself.

Kiopa_Matt

Why would you suggest that? You have to pay the standard living expenses (ie. rent, electric, food, etc.) whether you're living in your home country or abroad. Granted, you spend more due to flights, checking out the country, you eat out more instead of at home (actually, in many countries it's cheaper to eat at a decent restaurant than it is to cook something in Canada), and so on.

I was traveling the world for years, and only making around say $8000/month on an average month. I generally stayed in a country anywhere from 2 weeks to 6 months, and it was great. No regrets. It doesn't matter if I'm in Canada, Malta, Indonesia, Mexico, or Czech Republic... I'm still going to have to pay for shelter, food, etc. I can either sit in Canada and do it, or tour the world while doing it.

As for taxes, I don't pay any tax to the Canadian government, and have never paid in any of the foreign countries, because I'm never technically employed in them. During the last several years of my dad's career, my parents were on several international assignments. They loved it, because not only do you get to experience another country, you also get a large raise because you don't owe any tax to the Canadian government.

papajohn56

Plenty of ways to do this if you're a current US citizen. Just much harder.

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evelynds

always lots of PTs-turned-homeless-people (literally) at hong kong airport
just don't end up like them.

avatar33

You're the guy I've been looking for. PM'ing you right now!

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Fatbat

You're a wise man and I see the OP has picked up on this.

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avatar33

Our Spanish-Canadian is being sarcastic huh? I picked up on the fact that he actually did it. We're all talking theory here, but he has some practical info.

If he cut off all residential ties with Canada, it is possible.

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tacoX

I feel like a PT with all the traveling I've been doing. I honestly wouldn't want anymore because it gets fucking obnoxious after awhile and I'd rather just pay the taxes for the comfort of just relaxing.

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kingfish

Talk to a lawyer not a internet forum

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evelynds

talk to a lawyer? to become PT? what the fuck is with people????
@ryan eagle ; agreed sometimes.
@avatar33 ; this is right and most nations have a similar ruling. if you literally drop all ownership and severe all ties you will have no rights left but also no responsibilities (you will be judged whereever you happen to be based in that case.)

if your occupations and lifestyle aren't downright bizarre, a human being can live stay and die really just anywhere.

Fatbat

No sarcasm at all, seriously.

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tiz724

Learn to negotiate like a local.

Been living PT style for well over a yr.. easy on $3000 US a month if you work at it. I dont mean like a broke dick either, plenty of partying and womanizing included. Key issues are health insurance, and keeping the travel expenses down.

BluAffiliate

Hard to be productive and traveling all the time. At least I couldn't do it.

geomark

tiz, what are you doing for health insurance? Since you're in Thailand you know that you can walk into a private hospital and get excellent care for pocket change in most cases. But for castrophic insurance, have you found anything good? I've looked at plans from local insurers and they suck, high premiums for poor coverage.

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itchy

exactly, +1.

i live the same way and now i'm married we both do taxes? same as Kiopa, only if i live somewhere, which i don't, i "visit", but i'm english so its a lot easier, just sign out, done.

the trick to long term travelling or just living abroad in general is to earn western money passively. so income from investments, rent, commissions, dividends and now for us IM is the solution. the op has this bit down, all the rest is just details. pm me if you need any advice.

geomark

Some of you guys are very fortunate. It so sucks being a U.S. citizen sometimes. F'ing unbelievable they demand taxes when I rarely step foot in the country. Well, at least I'm not paying California state taxes anymore - got a pretty big raise not paying state income tax, property tax, sales tax, plus other weirdo assessments they would invent now and then.

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Doc

You can avoid them because you are hiding the money. But it is not legal unless you do it correctly.
Panama LLC that the owner of is a local accounting/lawyer firm
you have access to the bank account. the company NETS 300K. you draw out 80 K for personal use. You only have to pay local takes on the first 80K made in a foreign country, not US Tax. YOu draw out 200K you should pay tax US on the 120K.
That is the law (as I recall) but if you decided to pay no US taxes, will they find you if you are living in Panama, probably not, if you are living in San Francisco in a 4000 a month apt and reporting no income, maybe yes.

Here is an issue that you may confront. Lets say you are a US citizen and you really have no plans to take up residency in Thailand/Panama/costa rica etc, and you are banking it with IM. Your panama bank grows and you have a pile of coin. You get married and you want to buy the white picket fenced dream home (it is actually your wife's dream but you go along with it because you like fucking her) You can buy that beauty for CASH, but how do you justify the cash? Where did it come from? International wire for 400K, that will maybe raise a red flag....OK just borrow it, wait you do not qualify because you reported a poverty level income. Get the mortgage in the wife's name and you pay the loan, this may work, and when you get divorced, because you know you will, she is stuck with the loan But because you loved her you told her about the Panama account and during the divorce she threatens the IRS, and you end up giving her 70% of your panama money so you will not go to jail.

Kiopa_Matt

Gotta keep the money flowing to bomb brown people.

geomark

Truth. That's actually a big ethical issue and a major reason I became an expat. The only way to stop the murderous bastards is to starve them of funds. I took a big hit in income when I moved and now pay very little in taxes (still too much) and I'm happy I'm buying far fewer bombs and land mines.

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avatar33

Man this story you're telling me is like the most fucked up scenario that you could think of lol

I'm not worried since I'm Canadian, our gov is more flexible on these things. But damn, I feel sorry for you Americans, would the IRS really come find you anywhere in the world if they know you're hiding big monies in Panama and not paying US tax on it?

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charlesmartel

Man, the US gov't is rapacious. If you have $10k in a foreign account and don't report it, they can pretty much take all of it after a few years. I believe the $10k threshold has been around since the Bank Secrecy Act of 1970. Now just think what you could have bought in 1970 with $10k versus what you can buy with $10k now.

Also, I've heard there are IRS agents at embassies around the world.

itchy

land of the free.

geomark

Oh yes they would. I read a story a couple weeks ago of a guy who owed $45,000 in back taxes, he was hiding out in Thailand, and f'ing Thailand arrested and expedited him on request of the U.S. Almost nowhere in the world is safe from those blood suckers.

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Fatbat

You can get insurance from a European carrier that should adequately cover you globally for medical and dental for about €50-€60 a month. My girlfriend and I are currently covered by Bupa...

International health insurance for individuals and families | Bupa International

One thing to note is that while they cover you for medical procedures and hospital stays and whatnot, they don't cover you for repatriation if you want medical evac to your home country. An intensive care air ambulance from, say, Europe to Canada or the US will cost you around $200k. We learned this after a friend of ours from Vancouver was in a car accident here in Spain that ultimately proved fatal, but she was in a coma for 7 months before she passed away.

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Kamee CA

According to my knowledge you will have to pay taxes on the basis of your bank account status.So, where ever you are you will have to pay tax for your account within your country.

Sonny Forelli

you have 3 options

1) break the law out of greed and or ignorance/stupidity (fail)

2) pay taxes on a portion of income, pay a hell of a lot less on a larger chunk and allow your business to scale but at a cost (correct setup, on site/ground fees, etc). Can be WIN - however can also be FAIL when you get greedy/stupid and "use" "company" perks- like that penthouse apartment. Note- you're never NOT paying taxes on the money - you're just not touching it as an American citizen (yet). Whenever you do, it gets taxed. No <good> way around this.

3) decide this whole mess is a lot more work than it's worth and spend the energy making more money here, in the US, and declaring every bit of it.



Sorry- there's no one-size fits all holy grail. Facebook JUST made the Ireland move, and they're decently big...

drugg1e

no it wouldnt.