Back when I first started my online business I realized that the tax man was going to take a big chunk of my self employment income. That ended up spawning dreams of moving somewhere abroad to work on my online business. Maybe I’d even setup residency in some low tax country while traveling the world.
Unfortunately those dreams haven’t panned out yet, but it’s still something I might eventually do. I can’t ignore the significant raise I’d get on my online income if I were to leave the United States and move to another country that have some of the lowest tax. It’s just a matter of building up the revenue I get from my online business high enough to justify the move.
If I do eventually make the move, there are certain countries referred to as ‘nil-tax havens’. These countries do not have the 3 main direct taxes: income tax or corporate tax, capital gains tax and inheritance tax. These include:
- The Cayman Islands
- St. Kitts and Nevis
- The Bahamas
I don’t know about you, but I sure like the idea of not having to pay those major taxes and get to live in paradise. Out of that list I’ve only been to The Bahamas and it was pretty sweet. I’m not sure if I could see myself settling there long term though. If my French was stronger Monaco would be a pretty awesome choice. Then I could travel around Europe while there.
Obviously I’d have to do a lot more research into things like property prices, education, healthcare, etc. If they’re taking less taxes in, maybe that means that their government run services may be lacking a bit. Or maybe the import taxes and sales taxes balance it out.
Or if you don’t want to move to a completely different company, there are other ways you can take advantage of lower income tax rates elsewhere. For example, you could have an offshore investment. No I don’t mean the kind of bank account that people often use to try to hide money from the government. The government has been going after those kinds of accounts more lately. Instead this is a way of investing in foreign markets for things like stocks, bonds and currencies.
Or simply having an offshore bank account could allow you to take advantage of international banking tax benefits. Basically you wouldn’t have to pay income tax on the interest gained in such an account. Offshore banking advisors can help to explain what programs would be best suited to your needs.
Personally I am more leaning towards one day moving to a tax haven country, but if those plans don’t come to fruition, international investments may be an option to consider.
Would you ever consider moving to take advantage of lower tax rates in another country? Or do you think you might someday open up an offshore account for banking or investments? Feel free to comment your insights below.