Entrepreneurs, Here's How to Legally Lower Your Taxes
Take yourself and your business offshore and reap the benefits of legally reducing your taxes.
Imagine for a minute that you’re looking to buy a car for $28,000.
You’re most likely going to read dozens of online reviews, compare prices at various dealerships nearby, and possibly time your purchase just right so you can get the biggest discount.
All that trouble for a savings of maybe $4,000, if you’re lucky.
Now, think about your tax bill. If your annual taxable income is $500,000 and you live in a western country, you’re easily paying $200,000 a year in taxes.?
Why not look into lowering?that?expense?
Let me put that into perspective. In 20 years, you will shell out $4 million in tax.
The truth of the matter is that the majority of people put more effort into checking out the reviews of the sushi restaurant they were thinking of going to on Friday night than looking into how to reduce the tax burden.
Imagine what sort of reviews the IRS would get… And I’m not just talking about personal tax here. It’s exactly the same for your business too.
People rack their brains to know how to grow their businesses, attract more clients, reduce their spending, and boost their profits. And yet, they somehow fail to factor in their largest expense:?taxes.?
Perhaps you simply consider all those taxes as sunk costs. And if you cannot see beyond the country walls that currently confine your business, I guess that’s true.
But the world has changed dramatically, and it’s time your thinking changes as well. It’s time to think globally.?
Because your businesses can operate in the cloud where borders do not exist, you can “go where you’re treated best,” take yourself and your business offshore, and reap the benefits of legally reducing your taxes.
Caribbean countries, amongst other countries, have attractive?Caribbean citizenship by investment ?programs to compete over you.
You stand everything to gain, so here’s how it works.
HOW TO PAY LESS TAXES
Moving your business abroad by setting up an?offshore company ?is not easy, but it certainly can be done. Depending on your type of business, you could potentially pay 0% tax.
Move your ‘center of life’ abroad, and you could potentially pay no tax at all. Explore some of the best?second residence ?countries first.
You’ll need advice. International tax law isn’t something you want to get wrong. You’d be risking considerable fines or even jail time.?We’re here to help.
COUNTRIES ARE COMPETING FOR YOUR BUSINESS
The greatest advantage governments have is that they’ve brainwashed people to believe that there is nothing better.
Nowhere is this more obvious than in the United States.
People spend their entire lives thinking that the USA is the best place on earth to live, educate their children, go shopping, do business, and invest.
They would never believe that they could get ahead anywhere else.
But things have changed: location-independent businesses are thriving with consulting empires being built over the phone and Amazon FBA sellers sourcing and selling products on a global scale.?
You can basically make money anywhere in the world if there is an internet connection.
So, let’s flip this thing on its head. Instead of believing that one country has a monopoly on the perfect lifestyle and business environment, realize that there are countries out there?competing?for your business.?
Let that sink in.
Dozens of?countries with no income tax ?across the globe want successful people like you, and they’re willing to offer liberal tax deductions, fewer regulations, more efficient systems, and many other benefits.
If you’re looking to lower your tax burden, you’ve got options.?
It’s time to shop around.
Countries – especially the ones that are looking for immediate access to capital to sustain or accelerate their growth –are seeking successful business owners, investors, and high-net-worth individuals to move to their country.
They will take a small slice of your profits, and we do mean small, but largely, they have set up their tax regimes to be beneficial to you.
On the other hand, a US citizen will open a Health Savings Account, track their medical expenses while keeping each receipt to may or not be eligible for a minor tax exemption of their adjusted gross income.
US citizens don’t have to be stuck in the loop of federal income taxes and The Earned Income Tax Credit.?
UK citizens can’t count on their tax code, which is constantly changing.
It all comes down to one question: Do you trust your country’s tax system?
Do you believe that your federal income tax bill is going up? Can you count on a tax break?
Do you believe that investments in retirement accounts are the best ones?
Sometimes it’s worth paying to get out of a bad marriage. And sometimes it’s worth keeping. Although, sometimes, it’s worth just making some tweaks to it.
Nothing excites me more than helping businesses to legally lower their tax bills by setting them up with well-thought-out tax planning strategies so they can go where they’re treated best.?
My team and I can help you through the whole process, from shopping around to find that ideal place to creating your holistic strategy so that you can legally reduce your personal and business taxes.
CHOOSE YOUR TAX RATE
If you’re reading this from a high-tax-rate country, I’m sorry to say, that you’ve chosen to pay that high tax rate.
By choosing to stay put, you are sending your own money down the drain and straight into the pockets of the taxman.
Your government has been successful because they’ve convinced you that you need to hand a considerable percentage of your income over to them on a regular basis.?
You cannot go anywhere else. Your business will crumble without them. You owe it to them. The rest of the world is dangerous. You’re safer at home. It doesn’t get better than this…
That’s what they have you thinking.
But that’s simply not true. You can choose your tax rate. For some, this will be 0% – living a tax-free life to the fullest. Others will choose to pay a low percentage as a trade-off for other benefits.
For instance, you may forego paying 0% in Belize and choose instead to pay taxes in a country like Italy or Portugal through the?Italy Golden visa ?or?Portugal golden visa , where your total tax bill will be substantially lower than what you pay now.?
You’ll lower your taxes but not eliminate them, but you’ll be living in Italy instead of Belize.
Do you see the trade-off?
There are plenty of jurisdictions offering either one of these options – zero or low tax.?
We’ve served more than 1,000 high-net-worth individuals to optimize their personal and corporate tax rates.?
Yes, it’s more complicated than you think, but that’s where we step in.
Our team sits down with government officials and pinpoint loopholes that we can leverage.
We care more about getting the job done right than signing off a client and moving on to the other. That’s how we work.
We get clients that ended up paying double their tax bill because they went to a country that blacklists the country they’ve chosen to set up their offshore country.
There are endless scenarios that can go wrong, but you don’t need to learn this firsthand. We’ll be happy to?serve you .?
That being said, there are many countries that offer generous tax exemptions and other similar incentives to motivate people to move there.
By deciding to go where you’re treated best, you can choose your tax rate and take control of your life.
It’s up to you.
OFFSHORE TAX AVOIDANCE STRATEGIES THAT WILL NOT LOWER YOUR TAXES
Now, there is an important difference between choosing your tax rate and skirting the taxman.?
One is legal; the other is not.
So, before we discuss the techniques you can employ to lower your tax burden, let me dispel two pervasive myths about lowering your tax rate.
First, there are many people who believe that they can pull off the exact same strategies used by Google, Starbucks, and Amazon to lower their taxes.?
But your business is probably not a multinational company with a hundred thousand employees and offices spread all over the world.
That’s just not your reality.?
Your business neither needs nor can it execute such a highly complex tax plan.
领英推荐
Google’s tax plan will not work for you. You need something specific to your business and your personal situation.?
The way you do things must be, as they say in Southeast Asia, “Same same but different.”
Don’t copy someone else’s plan because it works for them. That could land you in hot water. Instead, make a plan based on the same principles that are tailored to you. Think things through and then create solid systems with the help of professionals.
Second, many think that if they open an?offshore bank account , they’re automatically exempt from paying taxes on the money in that account.
And, once again, that couldn’t be further from the truth.
An offshore bank account will certainly protect your money, hold foreign currency, and even garner higher interest rates.
But it won’t lower your taxes.
Just because the money is overseas doesn’t mean it won’t be taxed at home.
Ultimately, the jurisdiction where the money is earned is what matters. And if you’re a US citizen, all that matters is that the money belongs to you.?
An?offshore bank account ?won’t lower your taxes. So, let’s look at what will…
PERSONAL AND BUSINESS TAXES: HOW TO PAY FEWER TAXES
If you want real freedom – not just lower taxes – then you need to do things properly without cutting corners.
But when you don’t know what you’re doing, it can be easy to slip up here and cut a corner there without even knowing until you’re slapped with an exorbitant fine or even faced with jail time.
Creating an international tax strategy is complicated.
That is why I have created the tax-free quadrant to simplify the bigger picture and illustrate the different elements you must address to ensure that you can legally lower your taxes.
YOUR PERSONAL TAX IN THE PLACE YOU’RE ARRIVING
We’re getting to the exciting bit – choosing a new country (or countries) to live in. There are two ways you can go about selecting a new jurisdiction for personal tax reasons:
CHOOSE A ZERO OR LOW-TAX COUNTRY AND OBTAIN TAX RESIDENCY
When it comes to choosing a no or low-tax country, don’t feel trapped into thinking that you must move to one of the?countries with no income tax , like the?United Arab Emirates? or Seychelles – two of the many traditional offshore havens.
It’s true that you should choose a country that has smaller taxes, but don’t cloud your thinking by settling for a 0% tax rate only.
Sure, there are jurisdictions such as the British Virgin Islands, the?Cayman Islands , the UAE, or the Seychelles where you could pay no tax, but these aren’t very desirable places to live.
Why not make a trade: and pay a low percentage of the tax for a better quality of life? As I mentioned before, there are quite a few benefits to paying a little tax.
For one, you’ll be able to tell the tax authorities where your home base is so that no other jurisdiction tries to get you to pay their tax.
Nomad Capitalist clients commonly move to a territorial tax country such as?Thailand ,?Costa Rica , Georgia, or Singapore, among others.
You can live there for as long as you want and if your income is foreign-sourced, you won’t have to pay local tax at all.
And don’t forget about countries that offer all sorts of simplified tax regimes, flat tax rates, or foreigner exemptions. For example, Italy will take you in if you pay them 100,000 euros in tax. That’s all they require.
Depending on your income, that could be a great deal. Say you make 10 million dollars a year, which would make Italy’s tax bill less than 1%. It’s worthwhile checking for other such tax arrangements.
LIVE THE LIFE OF A PERPETUAL TRAVELER
Your other option to reduce your taxes in quadrant three is to live the life of a perpetual traveler if that appeals to you. As a perpetual traveler, you would go to multiple places every year and only spend a limited time in each location so as not to trigger tax residency requirements.
You can travel as much as you like, but if you’re like me and benefit from having a base, consider my Trifecta Method.
From a lifestyle point of view, I personally like Montenegro in the summer, London in the Fall, and Malaysia in between.
You could pick and choose your own countries or just go traveling around the world while working and making money at the same time.
Just know that if you spend six months or more in any single country, they will likely try to tax you.
OBTAINING TAX RESIDENCY STATUS
For both scenarios, it’s very important to obtain the status of tax resident in a tax-friendly country.Even if you’re a perpetual traveler or you’re leaving your home country, the tax authorities will want to know exactly where your new tax home is located.
If you’re able to spend 90 days in one place, rent a place, get a driver’s license, obtain a residence permit there, and more, it will be helpful to solidify your tax residence case.
Establish new connections and shut down old ones when you move from your home country to a new jurisdiction. Make it look like it’s your home.
You won’t need to live there full-time, but you’ll need to ensure that the time you spend in your original ‘home’ doesn’t exceed the time in your new one.
For example, if you’re spending four months in your home country and two weeks at a time in 16 other countries per year, your tax residency case isn’t that strong.
YOUR BUSINESS TAX IN THE PLACE YOU’RE ARRIVING
You’d think that moving your business to a zero or low-tax jurisdiction would be straightforward. But, of course, countries like the ‘fun’ of making things quite complicated.
For example, you can’t move to Portugal to take advantage of their?non-habitual tax residence? (i.e., zero personal tax rate)?and?have an offshore company there. They simply don’t allow offshore companies to be registered under your name.
And then there are the curveballs, such as the US being a legitimate offshore haven for some people and certainly not for others.
Wherever you choose, make sure that you move your company to a low-tax country and spend as little time in your home country as possible.
You don’t want to give the tax authorities a reason to think you might be a ‘double agent’. Move overseas, hire employees, or open offices to have an easier time reducing your taxes.
And just a quick word on tax havens – they are dead as we know them. Belize might be a 0% tax country, but it’s not reputable nor desirable to live there. Neither is Seychelles.
You must think about 21st-century tax havens, the ones of the modern era. For example, Malta could qualify with its 5% tax because it gives you so many options as to where you can bank, visit and live – the entire EU.
There are two ways that you are taxed: based on where you live and based on where your business lives.?
The difference between the two becomes much clearer when you go offshore, but they are also intricately connected. You cannot talk about lowering your business taxes without addressing your personal tax and vice versa.
And when you do make the offshore move, you must clearly understand the rules and provisions affecting your business and personal taxes in both the place you are leaving and the place you are arriving.?
The?tax-free quadrant ?takes all of this into account with its four separate quadrants:
Each individual quadrant impacts the others. You must have a strategy to address all four, or you won’t have a comprehensive tax plan.
IT’S TIME WE SHARE HOW TO PAY LESS TAXES
We’ve covered a lot of tax reduction strategies in this article, so let’s regroup and summarize.
It is clear that the world has changed. There are now many more opportunities to make money from almost anywhere in the world.
Physical location doesn’t matter as much as it used to anymore, which threatens the traditional work setup that countries have relied on to fill their coffers by way of tax.
Because of this, many countries are willing to go to extraordinary lengths to compete for your business, offering tax incentives to move your business to their jurisdiction.
From tax deductions to flat tax rates or even?lump sum tax , there are ways to not just pay fewer taxes but even avoid personal and business taxes altogether.
You’re not bound to pay the adjusted gross income you’re paying?
Some countries offer a tax credit, some cuts and more for simply bringing your business to their countries. has no capital gains tax, tax deductions, including generous cuts,?
Meanwhile, the US, Australia, the UK, and other western countries are continuing to suck their people dry by charging exorbitant personal and business tax rates.
They have enough power and enough sway over their populations that they can just keep taxing them and be fine. Your country does not want to compete.
And while most people don’t bother to do anything about it, you’re here because you’re asking questions.
We’ve given you loads of techniques and strategies to think about in this article, but the most important bit of advice I can give you is to think holistically.
Consider all four quadrants before you make any moves to reduce your taxes.
You’ll likely need some advice, as international tax law isn’t something you want to get wrong.
You’d be risking double taxation, considerable fines, and wasted time and effort.
My team and I help high-net-worth individuals reduce their tax bills every day.
Reach out . We’ll be happy to serve you
LET US CREATE YOUR HOLISTIC OFFSHORE PLAN
Our experienced team can help you legally reduce your tax rate offshore, protect your assets, invest overseas, and obtain a second citizenship. We’ve helped 2,000+ HNWI entrepreneurs and investors and we can help you, too.