This is a pretty ambitious topic to cover with a mere blog post but I’m going to give it a shot anyway. First thing’s first, ideally you have already escaped the corporate prison and moved abroad. If you haven’t, you had best put those things at the top of your to do list ASAP!
So what to do next? An ideal internationalization and wealth preservation plan for the Single Dude basically boils down to not putting all of your eggs in one basket, or to take it one step further, making sure your most important eggs are in as many different baskets as possible. I am certainly not the first to write about this but it’s surely worth repeating; if you want have the best possible chances of preserving your wealth you should do the following: Establish your citizenship in country A, your residency in country B, your business in country C, your bank accounts and financial assets in country D, your real estate in Country E and your precious metals in a secure non-bank facility in country F. If you are a member of the tiny elite that has already done all of this then you can further diversify by making further investments in additional countries as well as doing everything you can to establish maintain your location independence.
I realize that for most these may be rather lofty goals. Maybe you don’t have any wealth to protect yet, that’s OK everyone needs short term, medium term and long term goals to strive towards. Maybe you can’t cover everything on that list but the more you can cover, the better off you’ll be. Let’s face it, the west is becoming an increasingly hostile place for the Single Dude and the United States is among the worst of the west. From draconian taxation to draconian police state tactics with mass surveillance on top of it all, the tyrannical government of the United States is one of biggest threats to the Single Dude’s freedom. But this article isn’t about that, we’ve been there and done that. This article is about what you can do to minimize the potential damage that can be done to your wealth and ultimately your freedom.
Citizenship: Ideally you’ll have a citizenship from anywhere but the United States or Eritrea which are the only two countries in the world that extort money (“tax”) from citizens that live abroad and have no domestic income or assets. Even if you are unlucky enough to be a tax slave of one of these two governments you can always pursue a second passport and eventually renounce your citizenship. You have plenty of options through ancestry, marriage, investment or just plain serving out the required amount of time as a resident.
Residency: If you haven’t moved abroad do it now! You don’t have to travel much to see that the vast majority of governments treat tourists and temporary residents far better than citizens. Furthermore, US Citizens that live abroad can exclude up to $100,800 of income plus foreign housing expenses if they structure their affairs properly (hint: talk to an accountant!).
Business: Establishing a legal entity in a foreign country is easier and cheaper than you think. There are plenty of foreign countries that are competing for the business of establishing your business. You will have to do your own research to find out where the hottest jurisdictions are these days but here are four countries I know of that have corporate tax rates under 20%: Hong Kong, Singapore, Ireland and Bulgaria. Surely there are others. Plus, some forward thinking countries like Estonia are leading the way into the 21st century by doing away with useless paper documents and ink based signatures. An added benefit besides lower tax rates is that having a foreign legal entity may allow you to open a foreign bank account. More and more foreign banks are simply refusing to deal with US citizens outright, while some countries require residency to open a bank account regardless of your citizenship. A foreign legal entity may offer you a way around this. There are also many 0% tax havens to choose from, however for small businesses it’s often much easier to select a low tax jurisdiction than a true 0% offshore tax haven. Why? Several reasons: They can be costly and complicated to setup (several thousand dollars instead of several hundred dollars). They can also be more costly to maintain (again, several thousand dollars annually instead of several hundred). Entities established in 0% tax havens are often flagged for additional scrutiny when attempting to do business in the rest of the world and that’s clearly not something you want. It is also more difficult and more costly to establish bank accounts and credit card merchant accounts for these entities, you may be treated as a “high-risk” business even if you aren’t actually engaging in any “high-risk” business activities (read: lots of extra fees). Unless you have the time and money to fly to your chosen jurisdiction, you are stuck dealing with some shady, fly-by-night operation to do all the paper work for you. At the end of the day unless you have a lot of taxable income at the end of the year and you cannot come up with some “expenses” to reduce it, you’re frequently better off just paying a low tax rate due to all the incidental expenses associated with forming and maintaining a legal entity in a 0% tax haven. All of that aside if you’re dealing in serious sums of money, 0% tax havens may be worth a look. You may also consider a multi-entity structure where you simply have a holding company in a tax haven where the majority of your profits accrue and another entity to handle the day to day operations via a contract service provider and/or contract manufacturing agreement.
Bank Accounts and Financial Assets: As the war on cash kicks into high gear with ridiculous withdrawal limits, prohibition on cash in safety deposit boxes, civil asset forfeitures, and absurd “suspicious activity reports”, the need for a bank account outside of your country of citizenship (and residence as well if they happen to be different) should be painfully obvious. Here is a list of eight places where those unlucky enough to be US citizens can still bank. As for brokerage accounts, I’ve heard many good things about Interactive Brokers.
Real Estate: If you’ve got everything else in order, it never hurts to have some real estate. A piece of property that you can rent out for break even cash flows (or better) makes an excellent nest egg. Or if you’re buying for cash, look for the best cap rate you can find and remember that <=5% almost certainly will not keep pace with inflation in this era of never ending money printing. Look for a country that has a stable government (obviously) and a long track record of respect for property rights. This may be easier said then done but it’s worth doing your research. Throughout history a great many fortunes where made in real estate.
Precious Metals: We’ve made the case for precious metals time and time again. No need to do it again here. Buy this shit and make sure you store it in a secure, non-bank facility. This may even mean a safe in your home. Whatever you do, do not put it in a bank safety deposit box. Countries that have no tax and no import or export restrictions on precious metals would be ideal. Again, do your homework.
Cyrptocurrencies: If you’ve got everything else squared away, maybe you want to make a small gamble on some Bitcoins. The vote is still out on where Bitcoin and other cryptocurrencies are headed but they certainly some unique advantages. Just remember, Bitcoin is not anonymous unless you are a very advanced user that really knows what he’s doing and even then you could always slip up.
Hopefully this brief article will act as a starting point for a few single dudes out there to set some very important goals aimed at protecting their wealth and their personal sovereignty. Here are few blogs that provide more information on these topics: Sovereign Man, International Man, Nomad Capitalist (they are all selling something but they do have free information available). Good luck on your mission dudes!