No Tax Residence, banks and brokerages

[Freeeeedom]

I'm thinking about flagging my boat in Cayman Islands, registering a consulting company there and having no tax residency anywhere in the world.


This is quite easy legally. I'm not asking for legal or tax advice. I'm asking about practicalities.


There was a time in the past when I had not tax residency and I found out that it makes brokers and banks completely freak out. Does anyone have recommendation where I could park my cash and investment without the risk of having my assets frozen or accounts closed?



Perhaps someone has experience with safe banks that understand clients with no tax residency? Perhaps I should park my personal assets in Cayman Islands as well?

[NaClyDog]

I had looked into doing this very thing but quickly discovered I would i) immediately be liable for quite a tax burden in Canada and ii) would lose access to my brokerage accounts without ability to get new ones.


Losing tax residency comes with a ton of baggage and it's just easier to keep a residence here to keep the privileges that come with paying (high?) taxes. lol

[valhalla360]

Originally Posted by Freeeeedom

This is quite easy legally. I'm not asking for legal or tax advice. I'm asking about practicalities.

Legal/Tax & Practical are one in the same.

Banks played fast and loose for too long and now the laws make it so they have to know who you are and where you pay taxes. It doesn't matter what country you or the bank are from.

If you have negligible wealth and plan to hide off the grid...it's kind of possible but with huge hassles. If you are on the grid, it's still huge hassles and someone is likely to come looking for some tax money.

[Freeeeedom]

Originally Posted by valhalla360

Legal/Tax & Practical are one in the same.

That's simply not true. Please refrain from commenting on this thread if you are uninformed.

[valhalla360]

Originally Posted by Freeeeedom

That's simply not true. Please refrain from commenting on this thread if you are uninformed.

Please share once you've done it for a few years, how it works. I'm sure it will be easy and you will know it all.

[Lake-Effect]

Originally Posted by Freeeeedom

I'm thinking about flagging my boat in Cayman Islands, registering a consulting company there and having no tax residency anywhere in the world.

Your boat is one thing; is it even possible for anyone but an isolated hermit to not technically 'belong' to some country or other? Many countries automatically decide that you're a resident for tax purposes after you stay a certain length of time, or visit often.

It might still be technically possible to not have tax residency status anywhere... but as the Panama Papers, the hunt for Russian oligarchs, etc all show, it's becoming harder to be part of the economy and remain faceless.

Wikipedia link for tax residency

[Freeeeedom]

Originally Posted by Lake-Effect

Many countries automatically decide that you're a resident for tax purposes after you stay a certain length of time, or visit often.

True. And sadly you have to go through the rules of every country to which you have substantial ties. This is tedious but easy. I have done this work. I know my legal status. Once again, I'm not asking for a legal or tax advice.


Banks and brokers have a lot of freedom in deciding which clients are too risky for them. (In the EU the there is a debate slowly starting about curtailing that freedom as it's often abused.) I'm specifically asking which banks do not automatically classify clients with no tax residency as unwelcome.

but as the Panama Papers, the hunt for Russian oligarchs, etc all show, it's becoming harder to be part of the economy and remain faceless.

You are conflating two completely different issues. Panama Papers etc. are about people who should have legally paid tax but hid their money in order to avoid that. I don't need to hide my money because I will not legally owe tax to any country.

[Shrew]

Which country issued your passport?

There are three considerations....

1) Where you live

2) Where you earn income

3) Where you keep your assets

Either 1 or 2 (or both) are going to want stick their hand out (palm up). Getting Entity #3 to shield you from Entities #1 and #2 is an age old challenge that many, many, people have tried to overcome since industrialization.

[ThereAndBack]

Bitcoin

It was built for this.

[Dockhead]

Are you a US citizen? A lot of expatriate US citizens pay tax to the U.S. (to fund the glorious wars in Iraq, Afghanistan, Syria, and Ukraine -- pony up) but don't pay tax anywhere else, since they don't spend more than half a year in any one country. Pretty standard digital nomad deal. If you're not a very high earner, the Foreign Earned Income Exclusion can make this a pretty decent deal. The first $110k or so is tax free, but mind the social



Europeans are pretty tolerant of this. Estonia has an actual digital nomad visa, which is a great basis for doing this.

[Sailor Sailor]

Dubai, UAE, if you are o.k. with the Middle East...

[Lake-Effect]

Originally Posted by Freeeeedom

You are conflating two completely different issues. Panama Papers etc. are about people who should have legally paid tax but hid their money in order to avoid that. I don't need to hide my money because I will not legally owe tax to any country.

Taxes are user fees. Where/how do you plan to live in the developed world that doesn't in some fashion draw on a country's resources and protections? What embassy would you contact if you are in some kind of jeopardy or need protection/assistance?

(Yes this is political quicksand, but like NaClyDog, I feel that my Cdn user fees, like my yacht club annual dues, bring a lot of benefits.)

[Sailor Sailor]

Originally Posted by Lake-Effect

Taxes are user fees. Where/how do you plan to live in the developed world that doesn't in some fashion draw on a country's resources and protections? What embassy would you contact if you are in some kind of jeopardy or need protection/assistance?

(Yes this is political quicksand, but like NaClyDog, I feel that my Cdn user fees, like my yacht club annual dues, bring a lot of benefits.)

The UAE has significant oil production. It taxes oil companies and banks. Consequently, the UAE does not need to impose income taxes on individuals. Wealthy individuals like that. The "user fees" are paid by the oil companies using its oil resources.

At first, I did not understand when clients told me some wealthy associate of theirs moved to Dubai from some other country. I always wondered why someone would want to live in the Middle East. Now, I no longer ask why certain people want to live in Dubai. Apparently the city is quite beautiful, sort of like the Singapore of the ME.

[valhalla360]

Originally Posted by ThereAndBack

Bitcoin

It was built for this.

They figured out how to track bitcoin years ago. Now if you don't have enough assets for them to care, you might fly under the radar but if you have enough that you are worried about tax residency, they can and will track you down and add penalties to their proverbial pound of flesh.

The USA has strong armed the tax haven countries such that banks don't want to get caught up with anything that looks questionable, so if you can't show a clear paper trail of where you are from with all the legal T's crossed and I's dotted, they want nothing to do with you.

Which leads to a question? If the OP has enough wealth to worry about this, why is he asking on a random cruising forum rather than his accountant and lawyer.

[valhalla360]

Originally Posted by Sailor Sailor

The UAE has significant oil production. It taxes oil companies and banks. Consequently, the UAE does not need to impose income taxes on individuals. Wealthy individuals like that. The "user fees" are paid by the oil companies using its oil resources.

At first, I did not understand when clients told me some wealthy associate of theirs moved to Dubai from some other country. I always wondered why someone would want to live in the Middle East. Now, I no longer ask why certain people want to live in Dubai. Apparently the city is quite beautiful, sort of like the Singapore of the ME.

I spent around 7 yrs on and off in Kuwait and worked with a lot of guys stationed in the UAE. If you have a skill set in demand, you can go there to make money. If you are just trying to set up a tax haven, unless you are uber rich, it's a losing proposition. They aren't handing out residency for free.

PS: Singapore =/= Dubai by a long shot.