½ûÂþÌìÌÃ

Mike. Cayman (which is my home) is not the only place in the world that doesn't have an Income Tax. I'm not familiar with the new "global citizen" rules, but I presume that by "tax resident" you are referring to Income Tax, not some other tax. But your post is a bit too vague. Why do you want to live anywhere for 180 days, if you want to travel? Why do you want to spend only 3 months + five days in Cayman? That doesn't make sense.

International tax law is EXTREMELY complicated and national rules do not follow any general standard - especially the "180 days" or "90 days" to tax liability is a myth!
In most countries, you need a work visa in order to work and earn (as those "digital nomads" supposedly want to do). That usually includes income tax liability from the first day you work there - often for your entire world income.
Furthermore, working without a fixed, local employer is classified as freelancing or self-employed - for which few countries have a visa class and those which do might add formal requirements for business registration, proper accounting and value-added or other taxes.
I have looked into these matters in detail (for the countries I lived and worked in, mostly in Asia) and can tell you that there is more chance of being double-taxed rather than less or not taxed - and even if you find a loophole, the cost and complexity of maintaining several visa, residences and tax advisers (if you aren't fluent enough to do proper accounts and tax declarations in the legalese version of the local language) makes such plans impractical in almost all cases.
I believe that over 99% of currently existing, self-declared "digital nomads" are illegal at least some of the time - and due to the grey zone they are in, their status is never assured in the long-term. Not something anyone would base a good career or life plan on. Maybe not even sufficient to save a few bucks!

Gordon Barlow wrote:

Mike. Cayman (which is my home) is not the only place in the world that doesn't have an Income Tax. I'm not familiar with the new "global citizen" rules, but I presume that by "tax resident" you are referring to Income Tax, not some other tax. But your post is a bit too vague. Why do you want to live anywhere for 180 days, if you want to travel? Why do you want to spend only 3 months + five days in Cayman? That doesn't make sense.

I simply say 3 months and five days, because that is what completes a year.

It is simple. What if you wanted to live in 3 different countries.

One will be the country that you are tax resident in. So if a person becomes tax resident in Cayman Islands for instance, in order to keep being a tax resident, Cayman Island requires you to stay there a minimum of 3 months. Since the other 2 countries I am inteading to live less than 6 months and less than 3 months, than naturally will need to live a few more days or weeks in the tax resident country for it to be the whole year.

So lets say for simplicity sakes one stays in Cayman Islands for 3 months and 1 week.

And in the second country one lives for 6 months  less one week.

And in the third country one lives for 3 months.

That will add up to one complete year.

So the question is, which country will allow living and working for upto 6 months and not needing to pay tax, and which country will allow living and working upto 3 months and not needing to pay any tax.

The goal is to find a place where it is legal. It seems all too easy to be working remotely and not notifying any authority, but I want to do it legally. That is the whole point. I always like to do things by the law. The law says you don't become tax resident by this or that amount, or the law says you need a visa or work permit etc. So I want to find out.

With just travelling between 3 countries by staying longer, like 3 + 9 + 3 months, makes things more simpler.

As I said, there is no such general rule about tax residency, but everyy country decides on their own.
And certainly there is no rule preventing double taxation.
For work visa, most countries charge income tax from the first day you live and work there (why shouldn‘t they?), often on your world income.
The 6 or 3 months rule only exists in very few places. So your construct could only work if you commute between three with the same rules as the Cayman Islands - which is very unlikely!

Thanks for the response.

Like you said most countries, but which countries don't charge on world income?

Also I know it is few places that have the 3 month or 6 months rule, so what I am trying to find out is, which ones they are.

Also, I have been considering commuting between 3 difference no income tax countries such as Cayman Island, Barbabados and Bermuda for example. I have also considered travelling between no income and low income tax countries is also a possibility.

If a person is travelling between no income tax countries it doesn't even matter if person stay more than or less 3 months or 6 months as becoming tax resident there doesn't cause the person to have to pay any tax.

So what is the problem doing that? Why give up so easily, if people really want this to be done? One shouldn't give up so easily.

Mike,

This is getting pointless. All I can see is you avoiding paying taxes. Am I correct?

I don't see why it is pointless. If there is a way to do things legally, what is the problem to find out what that is?

The truth is I want to hit 2 birds with one stone.

I've been working like an ant and paying taxes in London UK for too long and my financial situation is bleak. I've even been suffering from depression and become suicidal. Travelling and living more like a digital nomad does give hope to me. If there are people doing this, which I am only recently finding out and it is legal, I don't understand all the hate that is coming from you guys. We are talking about what is legal.

The tax residence tests like the UK one for instance, talks about the number of days having lived, worked, and also ties to the country such as family or property. If a person passes all these residence, overseas etc tests which I know I can if I just leave the country, what difference does the intention make? Is there an intention test? The world just doesn't want people to be happy.

I think that where this conversation is hanging up is on the subtle but very real distinction between "legal" and "not illegal".

Mike, what you're suggesting is not illegal in a lot of places -- mostly, as Beppi and SimCity imply, because a lot of places haven't thought it worth legislating about -- yet.  If they did -- and when they do -- they probably will, and in ways you don't like.  I don't know of anywhere except Madeira that actively encourages digital nomads at the moment.

You want to live in a gray area.  I neither condone nor condemn that, but most expats live with a largely unspoken compact with their host countries to respect local laws in both letter and spirit.  You're not going to find much sympathy for gray zones on a site whose purpose is serving expats, especially from the Experts.

As I've said before, good luck in your research.

MikeGreo wrote:

I've been working like an ant and paying taxes in London UK for too long and my financial situation is bleak. I've even been suffering from depression and become suicidal. Travelling and living more like a digital nomad does give hope to me. If there are people doing this, which I am only recently finding out and it is legal, I don't understand all the hate that is coming from you guys. We are talking about what is legal.

Sorry to say, but that's what London is. Did you know there is elsewhere in the UK that pays more council tax than in London?

Count yourself lucky you are in the UK with the NHS which is free paid by your taxes. So if you do move to a tax FREE country you will be paying for healthcare.

While others on the board have disagreed, I think, as a general rule, tax residence happens after 180 days in a particular country. With the proviso that, usually, if you're in a particular territory, and earning money, then you should most likely be paying tax on it.

I would say that you can consider the issue of "legal", or you can think of what is "practical". Practicality dictates that you stay away from (living in) high enforcement countries, which are the USA or large European (UK, Germany, France, Spain, etc.).

In addition, you shouldn't fixate on no-tax countries, there are low-tax countries too.

And, it's not just about your taxes, it's about your cost of living. Many "tax haven" countries such as Caymans, Switzerland, Isle of Man, etc. are very expensive. So what you save in taxes, you lose in living costs.

Also, while it's possible to be a "Perpetual Traveller" or PT, and never stay long in any particular place, I think it's asking for trouble. I think it's safer to keep an official residence / tax basis in a "home" base, even while moving. This way you can show you are resident in X, and paying taxes every year there.

Sooo... specifically...

I lived in Andorra for a few years, which was a budget tax haven... but it was still not cheap. And property in particular was expensive. I enoyed living there, and was a ski instructor for a couple of years. But I don't think it's ideal for a nomad.

I also spent a few years in Latin America (Chile, Panama, Argentina, Brazil). Argentina was (and is) very cheap to live in if you're earning US dollars from freelancing. Buenos Aires is a pretty great city, and you can live very well here. I think this quite a popular location for "digital nomads" from the USA, so much so that they even introduced a "digital nomad" visa recently! I still like this option, if you like Latin America.

I came back to Europe to be closer to my folks in the UK. I spent a bit of time in Germany, Spain, Cyprus. None of these is cheap, but I definitely enjoyed living in Cyprus and Spain. Cyprus is the lowest tax with 20k euros tax-free, then next band at 20%.

However, I then decided I needed to get an offical residence permit (because of Brexit), so I came to Bulgaria to get it. It was cheap and easy. And I liked it so much I decided to stay here. This place has a flat tax of 10%, BUT it also has a very low cost of living... and you can buy property pretty cheap too. I have a country house, and even here, in the middle of nowhere, I have fiber to the house with 80 mbps wifi, so I've done Zoom lessons to Chinese kids learning English and American high schoolers needing to work on their math and SAT tests.

I would say Bulgaria is really growing on me, and I wish I'd come here years ago. 10% is pretty low tax, and IMHO is not worth messing around to try to get that tax rate down even further. Especially when you can also live so cheaply (e.g. property tax 50 euros annually vs my 1,200 quid council tax bill in UK, electricity bill 30 euros, fiber internet 10 euros, car insurance 100 euros annually). And it's an EU country too, so it's easy to move around -- and it doesn't look like you're hiding out in a tax haven trying to avoid paying your taxes. :-)

If you register as self-employed, the minimum monthly social security contribution is 60 euros. This entitles you to free healthcare and a Bulgarian EHIC card.

I also had previously gotten the Estonia E-Residence as they've been pushing it pretty hard for digital nomads. I didn't end up using it at all because you have to use one of their Estonia agents for filing and they were very expensive. It's cheaper to have a Bulgarian company and pay an accountant here to do the taxes.

I would suggest you consider Bulgaria as a home base, and then either work from home here, or travel around as nomad too. Variety is great, but renting short-term gets expensive. I used to travel all the time, and I am glad I stopped! Now, as well as the country house, we have a lovely little flat in a very nice city (Plovdiv), and a studio in the biggest ski resort (Bansko). So if we get bored of the house, we go to one of the flats. It has worked even better in these Covid days 'cos I don't need a PCR test, and it's only a couple of hours driving. :-)

My 3 places in Bulgaria cost me less than a shitty little flat in London, so I was able to just pay cash. I have no rent or mortgage, so I only need to cover fairly minimal expenses. While I was at it, I paid off all my debts and credit cards so that I'm debt-free too. I have two cars and a motorcycle that I brought over from the UK and re-registered. One's a beaten-up Vauxhall Vectra from 2008, so I'm not saying I'm living like an Oligarch. :-) But I've got a really low-stress, low-hassle life now. :-)

Just FYI I looked up CEIC data website for income comparison: household income (annual in US $), per capita
- Switzerland  57,400
- USA 33,150
- UK 32,350
- Argentina 3,800
- Bulgaria 3,600

or, average wages, monthly:
- Switzerland $5,800
- USA $4,200
- UK $3,100
- Argentina ?
- Bulgaria 700 euros

So you can see, if you're doing remote freelance work and earning anything over a couple of grand a month... well, you're just another struggling stiff in Switzerland, USA and UK... but in Argentina and Bulgaria you can live the high life. :-)

***

IntiAlDiamond: You are propagating overstaying a visa and dodging taxes, which are illegal in any jurisdiction (even where, as you wrote, penalties are lax or chances of being found low).
Since it is not allowed, by the forum rules, to discuss illegal acts, I have removed your post and temporarily banned you. Please don‘t do it again!

"Illegal" doesn't just mean "carrying a criminal charge".  It means "against the law", whether the offense is treated as criminal or civil, and whether the law seems to be enforced or not.  The definition is up to the host country,  not the expat.

Interesting post. You're quite right that I over-simplified the tax situation. But I think you're sailing a bit close to the wind!

Typically, if you are a tax resident in Country A, you will pay tax on your worldwide income. But some countries don't apply this, and only tax your local income (made in, or remitted to) Country A.

If you go to Country B, it usually (but not always) takes 180 days to become a tax resident there. But, even before this, income made in Country B would normally be liable to tax. But income earned in another country (from remote freelancing) would not.

You're also quite right that there are more possibilities if you have a company and bank account in Country C (or even just a bank account), that you can use to invoice.

However, depending on the jurisdiction of Country C, some countries (such as USA) have rules that payments to these places must have tax withheld at source. Pretty sure that Panama is on the USA's withholding tax list.

Moreoever, you would, as I mentioned in my earlier post, get into trouble if your Country A is one of the high enforcement countries. These have "anti-avoidance" rules (specifically CFC, or "Controlled Foreign Company"), which means it's NOT correct to say that you'd "only be liable for taxes on personal income that you'd set aside for yourself as a salary". Although perhaps Tunisia doesn't have CFC rules.

You'd certainly find the UK and USA tax authorities would be highly offended by your use of a corporate credit card to pay your expenses as "Benefits-in-Kind" are reportable income! I'd expect Tunisia to also consider these to be taxable!

The blacklisting of various 0% havens, and local income jurisdictions like Panama, meant that a lot of schemes involving these  countries fell out of favor. That's why the big guys (Starbucks, Google, Nike, etc.) moved much more into EU jurisdictions (Ireland, Luxemburg), and focused much more on IP companies (with IP rights payments) and intra-company transfer pricing.

But you're quite right that, most likely, Tunisia (or perhaps Bulgaria) would be unlikely to make a big deal of your Panama company. But I suppose it depends on how many millions of dollars are flowing through it. :-) Nevertheless, I don't think this is recommendable.

The UK and USA are not known as tax haven countries. But the UK has very favorable treatment for "non-doms", hence the popularity of Moscow-on-Thames. :-) Similarly, the US is a popular location for incorporation because it's pretty relaxed if you're not a resident.

You're quite right that you can do the PT thing and flit around the world, or stay "unofficially" in one or two countries. I did the same for several years in Panama and Argentina, just popping over to Costa Rica (or Uruguay) to reset my tourist visa. But, again, lots of these countries are tightening up and imposing larger fines for overstaying, and applying longer time limits before you can step back in with a renewed tourist visa.

If you're happy, and Tunisia is still loosey-goosey, then it's all good. Personally, I just got fed up with the hassle, and decided to make the effort to be formally resident... hence my sequence of residence permits in Panama, Chile, Singapore, Spain, Bulgaria.

I also got fed up with kleptocratic third-world regions and bribe-hungry policemen, and thought it's time to get back to Europe and civilization. Germany, Spain, and Cyprus were nice, but just a tad too expensive. Bulgaria is economically third-world (judging by the stats), but is actually very civilized and very safe.

And I don't have to worry about a Colombian drug kingpin renting an apartment in my name (using a copy of my passport that a realtor has sold him), and then when it all goes pear-shaped I get carted off by the Feds and interrogated. (That's Panama!)

I'm guessing Tunisia cost of living is pretty similar to Bulgaria. If you have a nice quality of life there, then congratulations!

As to Bulgaria...

As mentioned, it's safe, it's civilized, it has lots of natural beauty... and it's about the poorest/cheapest in the EU. And, a big plus for me, it's in the EU. Next year (2022) I qualify for my permanent residence here, which is pretty much equivalent to an EU passport in terms of allowing me to live/work/hang out in another EU country.

60 euros/monthly is the minimum social security contribution for the self-employed. This entitles you to free healthcare and Bulgarian EHIC. Like Tunisia, private medical care is very cheap... so, like you, usually I just go to a private clinic and be done with it. I've even developed a bad habit (it's a bit socially irresponsible, innit) of just walking across the road and going to the Pulmed Emergency Room, instead of making an appointment. Last time I did this the Emergency Room Doc hit me with a bunch of tests (blood pressure, EKG, ultrasound exam, blood analysis) but even with his consult fee it was less than 75 euros. :-) This would be several thousand dollars if I pulled the same stunt in the USA.

Sadly, yes, I arrived before the end of the Transition Period (31/12/2020). So it was easy-peasy for UK passport holders.

Now, it's same rules as other non-EU, which means you have to get a D Visa first, then apply for Residence Permit. And D visa is easy for pensioners, but otherwise not. My attorney says the usual way (if not a pensioner) is to setup as a Foreign Trade Representative (of your company in Panama, for example). This costs a little bit of money, but nothing too crazy. Otherwise the requirements (criminal record check, bit of money in a BG account, medical policy) are usually pretty easy to sort out.

One you have a residence permit, you can do "family reunification" to get a residence permit for wife or other family member.

With a Russian father, there might be an easier way, but I don't know anything about their rules for those with connections to former USSR.

It's pretty obvious that Mike - and perhaps some of the others - don't really understand offshore zero-tax havens. I'm not going to go through the whole rigmarole, but will link to just one of the several posts on my personal blog that I wrote from 2010 till 2016.

Others of this genre can be found by looking through the index on the right-hand side of each post, and pulling up any whose titles look promising.

The main point Mike seems not to grasp is that zero-tax havens (zero-Income-Tax havens, at least) don't care where he lives or for how long or what other place might or might not levy taxes on his income. They will not touch his income, and don't care how much he has of it; he doesn't even have to lodge a return. All they care about is: can he afford to live there?

I am thinking probably a good way might be like this:

Cayman Islands (3 months) + United Arab Emirates (6 months) + Bulgaria/Malta/Cyprus/Barbados/Bermuda/Montenegro/Georgia/Spain/Italy/France/ (3 months) = 1 year

Cayman Islands requires the person to stay at least 3 months per year to remain tax resident.

UAE provides a 1 year work visa at a certain prices, which I checked seems reasonable. I can stay in the country during the periods that is not so hot. Thinking to stay there just 6 months per year.

The third place I am thinking a number of places as option. It could be Bulgaria or Cyprus or Malta. I can ask for work VISA. But it seems taxes are not very high for those places.

What do you think? Will it work?

Also if I wanted to go to some EU country like Spain for 3 months with a work visa, would I have to pay the tax to Spain or to Cayman Islands or UAE? The idea is become a tax resident in Cayman Island. If during my stay at UAE I also become tax resident in UAE not a problem.

But not sure if I stay for 3 months in a year in an EU country like Spain, will that mess things up, and Spain expect me to pay taxes to them even when I leave the country after the 3 months.

In almost all cases (except for the few countries that don't charge income tax), you have to pay income tax on income generated while living there and holding a work visa - regardless of how many days or months per year that is.
In many EU countries (and probably others, too), if you work there even for a short period, you have to declare (but not necessarily pay tax on) your world income for the entire year, because the tax rate applied on the taxable income depends on your entire income. You will need (and pay) a local tax consultant for this.
In some countries (mostly EU, but possibly others, too), tax residency is not even tied to being physically present in the country, but on having a residence (rented or owned property) or office there.
And some others (most notably the USA) apply other criteria which make it almost impossible to escape their tax liability, no matter where and how you live.
Remember: It is not in any country' interest to let you off, so they make it as difficult as they can. (And the few loopholes you may find now could be plugged at any time.)

In my opinion, it is a pretty stupid move to chose your home and (nomadic) lifestyle just for tax reasons. Happiness, which, as studies show, is not correlated to money owned, is surely more important!

Thanks for your response Beppi.

I would say since I've pretty much hit rock bottom in the UK, anything is better than here.

I think happiness does correlate how much one is able to travel. Travelling I always feel happiness. Misery can also correlate to working the whole year and not having any property, car and no savings.

So personally I think it is absolutely worth it. I want to see more countries and live there too. I don't need to own any property at the moment in any country which will tie to it.

But becoming tax resident in Cayman Islands(3 months) and UAE(6 months) and living the rest of the year like Romania or Bulgaria, I would be happy to do.

At least I will see the sea in Cayman Island, or see a different country like UAE. I don't care about property right now. If I can travel, get out of London and save some money it will be worth it.

I've checked the rent prices in Cayman Island and Dubai, its not too different from what I am paying in London. Only difference is in UK I am also paying taxes.

I think I said that before: You are delusioned.
While rents might be similar, short-term rents are far higher. And living costs, in a place you don't know and where you cannot live like the locals, too.
I have seen many people like you, who have a sense of what they want to get away from, but don't know their destination. They usually fail. A major contributor to this is that they cannot run away from themselves and their own worldview (which tends to paint their current circumstances black and everything else in colour).
Learn to be happy with what you have  - I can assure you that 90% of the world population envies you for your current UK living standard!

MikeGreo wrote:

I think happiness does correlate how much one is able to travel. Travelling I always feel happiness. Misery can also correlate to working the whole year and not having any property, car and no savings.

Have you ever worked full-time while travelling? Or you have only travelled while on holiday? Mixing the two is something else... Generally happiness is more about having realistic expectations. I encourage you to keep looking for happiness, if something looks like a good idea, investigate it, but start with baby steps, don't cancel your rent and move to Cayman Island right away. Talking to a professional would also be smart.

MikeGreo wrote:

I've checked the rent prices in Cayman Island and Dubai, its not too different from what I am paying in London. Only difference is in UK I am also paying taxes.

And living in Romania and paying 10-15% taxes might be even cheaper than CI or Dubai. Is your employer OK with you invoicing them as a contractor and working from abroad?

I don't think it is delusional. Worst case if all else fails I move permanently to Dubai and just live there working remotely.

Also 6 months is hardly short-term if I go between 2 places. I have already checked those rents.

I have also considered Romania. I am considering a lot of things. I am taking baby steps. This won't even happen this year. Might happen even a few years later. But at least I have something aim to.

I would be willing to quit my job or find whatever company allows me the nomadic lifestyle. I am seeing more and more companies accepting remote workers. And more and more companies are even starting to say you can work from anywhere in the world. If my current job doesn't allow, I will change it. I have seen some colleagues go to their home country for 6 months though and work remotely from there for the UK company.