In Canada, if you own a home or if you have dependants living in Canada, you are considered a resident for tax purposes, even if you live overseas 365 days a year.
This rules started to be challenged and hard to use in around 2014 -15, before the regulators where still use this after, no way, now all kinds of residence tests, and ties to the place of your staying, its getting harder, defo.
This was the same idea that came in my mind today morning and well in the evening you are here with a video in it. Thanks for the beautiful explanation:)
The 183-day rule is great intra-USA when determining which state you live in but when dealing with day tests for countries. This is a great explanation that the rules that the US lives by are not necessarily what the rest of the world practices.
Great video and very relevant points mentioned here in this video. There is no question that in many cases this "hack" does not work today and was likely something that was over exploited many years ago and also was established in a different era of travel. It is important for one to remember at that point in time constant global travel was not so common and likewise many aspects of this rule don't apply to most countries today.
Andrew, can you do a video about how stocks are taxed if we are in another country as well as if we can still buy US based stocks doing the nomad lifestyle? Thank you in advance
The idea is that you move to a country that only taxes local income earned in that country, then use a broker in another country to actually do your trading. So you can trade whatever the offshore broker allows you to trade, and basically pay no tax since the country you live in only taxes income in that country but your income (provided you are a profitable trader) comes from your overseas broker.
Profits are typically shared in the country you move to. What you can consider is doing those investment through another legal entity, could be a LLC in Delaware and first pay the potential tax as dividends when you leave.
Great content as always. If govt's could be this good with numbers in budgets and staff salaries, boy would they ever be efficient. Have a good weekend Andrew and team.
Brilliant video, thank you for sharing Andrew. You've said it very well, the best way to show them you're leaving is to actually leave. Simple, yet a very useful reminder
How about this: - live in your home country - have a company and a holding in an income tax free country - don't pay yourself a salary for years - move to the tax friendly country for one year to pay yourself all the money
You have to take care of the corporate residency. If you do all the work in your native country, there id a good chance your company will be taxed there.
Thank you for the information! Great content as always. Working hard now to get to the level of becoming a Nomad Capitalist in the future. As Dutch passport Holder, and living for the last 12 years in Asia... What i was wondering: Is it possible to become residence in Malaysia and then setup a Tri-fecta: (with owning property) 5 1/2 month Malaysia -> 2 1/2 month Netherlands -> 4 months Portugal..
You are really genius Sir Andrew , all your videos contain so many helpful information and I am really interesting to buy your book the Nomad capitalist
Great video as always!! Hey, perhaps a dumb question, but hopefully you can make a video on this: How can I create a bank account in some country where I have no status? Say I'm considering relocating to some country, well... I'd like to start by opening a bank account, putting some money out there, perhaps investing it in some local business or their local stock exchange - For all that I first need a bank account. I know in the USA you must have (supposedly...) legal status to open a bank account. Can I open a bank account in other countries without legal status? Must I physically be in that country and open it in person or are there way to open it even while I'm still in the USA without even visiting? THANK YOU !
Why is the Mexican passport strong, despite the fact that Mexico has a high rate of poverty and crime, and do you think that in the future it will become stronger or weaker, and what are the countries whose passport will become stronger in the future?
My guess is that Mexicans are not overstaying or illegally entering countries other than the US. Mexican passport holders that travel around to the countries they have visa free access to probably are going for vacation or business. It will probably become stronger in the future, as the trend is countries opening up to each other.
Happened to me years ago, as I worked under a commuting regime in Asia. Eventually had to pay some income tax to the country where my services were being delivered (still a tiny fraction of what my home country would have grabbed, though). Home country tried to levy taxes as well, but my lawyer filed an appeal and we won. Took us a 10-year legal fist-fight, nevertheless...
I misunderstand this topic. For example I have permanent resident in UK 🇬🇧, I bought a house in London…, after 5 year a become civilian, but I have other house in Greece.etc. But 183 rules is , do I always have to unsubscribe from the population, or?
I live in France and Morocco but am tax res in France because my house, medical stuff etc is there. The UK, however, where I am from, has the 180 day rule and if you go somewhere else to work you don't pay tax in the UK. It doesn't make any difference where you earn money for France though, wherever you earn it you pay tax in France. So each country is different. Btw I'm an impoverished DN so don't worry about my taxes, I work on my benefits instead 😁
Aah so you can only do the trifecta method in countries that have this strict 183 days rule, otherwise they will appoint one where they consider you to be tax resident with these other tests. Is that correct? And then you dont pay any personal income tax. (And if it might change later then you simply appoint/choose where you’ll be tax resident, like Malaysia a territorial tax country that doesnt tax foreign sourced income any way) Still wonder what Andrew is filling in on the forms, in every country you say that your home is in the other country?
I haven't as of yet retired, but the opportunity may present itself earlier than expected. How does this apply for people with 7 figures or more in IRA's. Is there a video for this? BTW....I just received your book this afternoon!
Question about this. I'm Canadian and and planning to spend 3 months in the Caymans a year, 6 months or less in Korea with my wife's family and about 3 months in Canada to visit family. Would the trifecta approach apply here? I have heard being a Canadian I still need to be a tax resident of a country if it is not going to be Canada. Therefore if I need to claim as a tax resident in korea I might end up paying similar tax as I would if I stayed in Canada. Any insight here?
If u leave your country and spend 3 to 4 months in different countries, won't your country still tax u? Don't u gotta show them u left their tax net? Like won't they be like oh u left but where are u paying taxes, I don't see anything so you're still "mine"
Triggering tax residency (beware a common pitfall) You’ll want to manage the timing of when your tax residency starts. This is because typically tax residents are taxed on their worldwide income; while non-tax residents are taxed only on their country of citizenship sourced income. Residency is triggered by one of two tests - either you’re in the country for 183 days in any 12-month period; or you have a ‘permanent place of abode’ (i.e. a dwelling that’s available for your use). A common pitfall is for people to inadvertently trigger residency status by returning for holidays or visits, prior to the permanent return. To avoid that, make sure there’s a period of least six months between your last visit and your permanent return. Purchasing a home here could also trigger domestic residence earlier than is desirable. It’s a good idea to seek advice before making that commitment.
8:12 now that's a huge piece of information! But then I have to ask you: how do you cope with your empty homes in Georgia, Montenegro and Colombia? Are those countries on a different enforcement level than the UK, for example?
I had already watched that and it's not exactly related to that. I meant about potencial issues with those countries' tax authorities if you keep empty homes. Are they more relaxed than the UK?
In Canada, if you own a home or if you have dependants living in Canada, you are considered a resident for tax purposes, even if you live overseas 365 days a year.
😱😱😱😱
Logical if you have dependants there, you're there.
This rules started to be challenged and hard to use in around 2014 -15, before the regulators where still use this after, no way, now all kinds of residence tests, and ties to the place of your staying, its getting harder, defo.
YES OVERSEAS BANK REPORTING. BIG BROTHER.
This was the same idea that came in my mind today morning and well in the evening you are here with a video in it. Thanks for the beautiful explanation:)
You are so welcome!🙌
The 183-day rule is great intra-USA when determining which state you live in but when dealing with day tests for countries. This is a great explanation that the rules that the US lives by are not necessarily what the rest of the world practices.
Great video and very relevant points mentioned here in this video. There is no question that in many cases this "hack" does not work today and was likely something that was over exploited many years ago and also was established in a different era of travel. It is important for one to remember at that point in time constant global travel was not so common and likewise many aspects of this rule don't apply to most countries today.
Andrew, can you do a video about how stocks are taxed if we are in another country as well as if we can still buy US based stocks doing the nomad lifestyle? Thank you in advance
The idea is that you move to a country that only taxes local income earned in that country, then use a broker in another country to actually do your trading.
So you can trade whatever the offshore broker allows you to trade, and basically pay no tax since the country you live in only taxes income in that country but your income (provided you are a profitable trader) comes from your overseas broker.
Profits are typically shared in the country you move to. What you can consider is doing those investment through another legal entity, could be a LLC in Delaware and first pay the potential tax as dividends when you leave.
Great content as always. If govt's could be this good with numbers in budgets and staff salaries, boy would they ever be efficient. Have a good weekend Andrew and team.
Brilliant video, thank you for sharing Andrew. You've said it very well, the best way to show them you're leaving is to actually leave. Simple, yet a very useful reminder
Nice to see you here Anna! All the brilliant and beautiful people think alike!
@@halmofernandez422 :-D
How about this:
- live in your home country
- have a company and a holding in an income tax free country
- don't pay yourself a salary for years
- move to the tax friendly country for one year to pay yourself all the money
You have to take care of the corporate residency. If you do all the work in your native country, there id a good chance your company will be taxed there.
You might have to pay corporate tax in your native country if it has CFC rules, which most developed countries have
Thank you for the information! Great content as always. Working hard now to get to the level of becoming a Nomad Capitalist in the future. As Dutch passport Holder, and living for the last 12 years in Asia... What i was wondering: Is it possible to become residence in Malaysia and then setup a Tri-fecta: (with owning property) 5 1/2 month Malaysia -> 2 1/2 month Netherlands -> 4 months Portugal..
It's unbelievable. It seems anytime I face a problem u provide an answer
You are really genius Sir Andrew , all your videos contain so many helpful information and I am really interesting to buy your book the Nomad capitalist
Thank you for your kind words!
Yes so true, nobody travelled as much back years ago. Shows you how silly things have gotten...
Great video as always!! Hey, perhaps a dumb question, but hopefully you can make a video on this: How can I create a bank account in some country where I have no status? Say I'm considering relocating to some country, well... I'd like to start by opening a bank account, putting some money out there, perhaps investing it in some local business or their local stock exchange - For all that I first need a bank account. I know in the USA you must have (supposedly...) legal status to open a bank account. Can I open a bank account in other countries without legal status? Must I physically be in that country and open it in person or are there way to open it even while I'm still in the USA without even visiting? THANK YOU !
Good to know
Why is the Mexican passport strong, despite the fact that Mexico has a high rate of poverty and crime, and do you think that in the future it will become stronger or weaker, and what are the countries whose passport will become stronger in the future?
My guess is that Mexicans are not overstaying or illegally entering countries other than the US. Mexican passport holders that travel around to the countries they have visa free access to probably are going for vacation or business. It will probably become stronger in the future, as the trend is countries opening up to each other.
Happened to me years ago, as I worked under a commuting regime in Asia. Eventually had to pay some income tax to the country where my services were being delivered (still a tiny fraction of what my home country would have grabbed, though). Home country tried to levy taxes as well, but my lawyer filed an appeal and we won. Took us a 10-year legal fist-fight, nevertheless...
I misunderstand this topic. For example I have permanent resident in UK 🇬🇧, I bought a house in London…, after 5 year a become civilian, but I have other house in Greece.etc. But 183 rules is , do I always have to unsubscribe from the population, or?
Less ties, more freedom.
If Facebook knows when you poop, the legacy brand governments can coordinate car/house sales and how many days/times you are there.
is there a way for a new us citizen under eb5 to become a non tax resident or non tax citizen?
I live in France and Morocco but am tax res in France because my house, medical stuff etc is there. The UK, however, where I am from, has the 180 day rule and if you go somewhere else to work you don't pay tax in the UK. It doesn't make any difference where you earn money for France though, wherever you earn it you pay tax in France. So each country is different. Btw I'm an impoverished DN so don't worry about my taxes, I work on my benefits instead 😁
Boy didn't Covoid smash this concept, I have a family & love my country, tripping around the world long gone now.
Aah so you can only do the trifecta method in countries that have this strict 183 days rule, otherwise they will appoint one where they consider you to be tax resident with these other tests. Is that correct? And then you dont pay any personal income tax.
(And if it might change later then you simply appoint/choose where you’ll be tax resident, like Malaysia a territorial tax country that doesnt tax foreign sourced income any way)
Still wonder what Andrew is filling in on the forms, in every country you say that your home is in the other country?
I haven't as of yet retired, but the opportunity may present itself earlier than expected. How does this apply for people with 7 figures or more in IRA's. Is there a video for this? BTW....I just received your book this afternoon!
Can W2 Employee(for US Employer) can reduce tax living abroad
Question about this. I'm Canadian and and planning to spend 3 months in the Caymans a year, 6 months or less in Korea with my wife's family and about 3 months in Canada to visit family. Would the trifecta approach apply here? I have heard being a Canadian I still need to be a tax resident of a country if it is not going to be Canada. Therefore if I need to claim as a tax resident in korea I might end up paying similar tax as I would if I stayed in Canada. Any insight here?
Love it!
If u leave your country and spend 3 to 4 months in different countries, won't your country still tax u? Don't u gotta show them u left their tax net? Like won't they be like oh u left but where are u paying taxes, I don't see anything so you're still "mine"
Does this mean 183 days in one year only or can it be for example 3 months in 2020 + another 4 months in 2021?
MrAndrej4life 6 months + 1 day in the same year
Triggering tax residency (beware a common pitfall)
You’ll want to manage the timing of when your tax residency starts. This is because typically tax residents are taxed on their worldwide income; while non-tax residents are taxed only on their country of citizenship sourced income.
Residency is triggered by one of two tests - either you’re in the country for 183 days in any 12-month period; or you have a ‘permanent place of abode’ (i.e. a dwelling that’s available for your use).
A common pitfall is for people to inadvertently trigger residency status by returning for holidays or visits, prior to the permanent return.
To avoid that, make sure there’s a period of least six months between your last visit and your permanent return.
Purchasing a home here could also trigger domestic residence earlier than is desirable. It’s a good idea to seek advice before making that commitment.
8:12 now that's a huge piece of information! But then I have to ask you: how do you cope with your empty homes in Georgia, Montenegro and Colombia? Are those countries on a different enforcement level than the UK, for example?
Hi Rubens! Thanks for your interesting, maybe this video ua-cam.com/video/fvgmdwflSe4/v-deo.html will be helpful.😊
I had already watched that and it's not exactly related to that. I meant about potencial issues with those countries' tax authorities if you keep empty homes. Are they more relaxed than the UK?
Tri-fecta?
Five-fecta.
Living in 3 countries for 4 months.
I think it's 99 days in the UK
Nope
If you have the keys to an apartment in Germany, and a toothbrush there, you are taxed in Germany, no matter what.
Million Dollar Question - Where is Andrew Henderson's Tax Residence ? IRS would be dying to know ;)
He renounced his citizenship.
First🤙🏻