Dateline: Vlore, Albania
Here at Nomad Capitalist, I spend lots of time speaking concerning the idea of going where you’re handled greatest.
At its most elementary, this concept means looking for out places that have plentiful enterprise opportunities, worth your wealth, and fit your way of life.
Nevertheless, for many people, this notion goes towards all the things that they’ve ever discovered.
You see, the default position for most individuals is to rely on one nation for all of their needs. We’re raised to reside, financial institution, pay tax, get married, have youngsters, and reside our lives in just one nation.
Naturally, then, when individuals first study going offshore, they’re a bit perplexed.
Should you’ve never considered going offshore before, then you definitely may be overwhelmed by all the info that’s floating round out there. With one weblog telling you that Panama is the answer to your issues and another telling you to put your whole money in a Swiss bank account, it’s straightforward to fall into evaluation paralysis given all the prospects of going offshore.
And at that point, you is perhaps wondering, “how can I actually do this in the real world?”
As somebody who’s been proper where you at the moment are, I know how necessary it is to have particular examples of how one can begin to diversify internationally so that you simply’re banking in the perfect place for banking and dwelling in one of the best place for dwelling, however since these locations are often mutually unique, placing this offshore puzzle collectively can seem difficult.
So, on this article, my objective is to make going offshore appear a little less intimidating by supplying you with a three-part instance of how you can get began – my international citizen sandwich.
- 1 What’s a Global Citizen Sandwich?
- 2 The Global Citizen Sandwich within the Real World
- 3 Executing your Global Citizen Sandwich
What’s a Global Citizen Sandwich?
Right now, you may be wondering, “why the heck is Andrew talking about sandwiches in an article about going offshore?”
You see, my international citizen sandwich is an analogy that I exploit to explain how I construction my worldwide way of life.
The global citizen sandwich is predicated on the fact that most individuals who need to go offshore are wanting to do three things: they need to maintain more of their money, reside a freer and happier life, and grow their wealth.
So, what does all of that involve?
To succeed in those objectives, you’ll want to reside in a spot the place you take pleasure in dwelling (but can also be tax-friendly), spend money on a spot the place you will get the most effective returns, and store your cash in a place with a high-quality banking system.
Your international citizen sandwich, then, can be manufactured from three elements:
On the highest, you’ll have the place the place you’re storing your money and allowing your wealth to construct. This place is likely to be a higher-end international metropolis that may treat your money nicely like London, Zurich, or Singapore.
The contents within the middle are your on a regular basis life – where you’re truly spending your time and how that plays into your tax strategy. For this part, you’ll need to discover someplace like that’s well-developed and livable without the high price ticket of a larger, more established metropolis, and you’ll need to be in a rustic with low-to-no taxes.
Lastly, the bottom of your sandwich will probably be where you make investments. This place won’t be somewhere that you really want to stay or bank in, nevertheless it’s somewhere that you would be able to get excessive returns in the event you’re prepared to take a fair bit of danger.
Finally, the benefits of those two prime pieces – banking in a high-quality jurisdiction and dwelling in a tax-friendly place – will stream down to that bottom piece – where you make investments your money for one of the best returns.
The Global Citizen Sandwich within the Real World
Now, to see how my international citizen sandwich works, let’s use a real-world instance – my offshore strategy in Southeast Asia.
Once I’m in Southeast Asia, I spend most of my time dwelling in Kuala Lumpur, however I bank in Singapore and spend money on Cambodia. Each of these locations is well-suited to each of my objectives, so with this international citizen sandwich, I’m going the place I’m handled greatest by selecting nations and cities that match my wants.
Subsequently, on this section, I’ll use this example to walk you through how the global citizen sandwich truly works in the actual world by telling you ways and why I chose every nation.
Dwelling: Kuala Lumpur, Malaysia
For the meat of my international citizen sandwich, I select to reside in Kuala Lumpur.
I’ve talked about how Kuala Lumpur is a wonderful place to stay for years. You will get by simply with only English right here, and it’s also relatively developed despite having a low value of dwelling. It’s also quite straightforward to get around Kuala Lumpur, which is necessary for me since I’m not precisely a fan of driving.
Another wonderful thing about Malaysia is that it’s relatively tax-friendly. It’s a territorial tax nation, which signifies that you only pay tax on locally-sourced revenue, and the taxes you do have to pay are fairly low.
So, when deciding the place you need to stay, you want to find someplace that’s both extremely livable but may even play nicely into your offshore strategy, and for me, that place is Kuala Lumpur.
Whereas I really like dwelling in Kuala Lumpur, Malaysia isn’t precisely the most effective place on the planet to bank.
Granted, I do have a bit of money in a Malaysian bank as a part of my visa and to use for everyday things, however since banking in Malaysia signifies that I’ve fairly a little bit of overseas foreign money publicity, I don’t want to maintain all of my wealth there.
Fortunately, Singapore is true next door.
Presently, Singapore is probably the number one wealth hub on the planet. Its banking is top-notch, and it has wonderful personal vault storage for every part from valuable metals to artwork collections.
So, if I have the selection between putting all of my money in a Malaysian bank or touring an hour and storing my wealth in Singapore, I’m going to select Singapore.
Lastly, let’s talk about the last piece of this puzzle – what do you do with your whole cash when you’ve earned it?
When investing, you naturally need to hunt down the places where you’re going to get one of the best returns, and sadly, neither Singapore nor Malaysia match that invoice.
Singapore is a extremely developed country, which signifies that real estate is usually expensive and returns aren’t excellent. Malaysia is turning into a comparatively developed country, and because there’s been a lot property built there already, you gained’t see good returns there, either.
You see, the perfect places to invest are going to be up-and-coming nations the place you will get incredibly excessive returns, however these are locations where you won’t precisely need to stay.
For me, that place is Cambodia.
I’ve talked about Cambodia for a very long time as a superb place to make investments. Every time I visit the country, it’s extra booming than it was before, and because the country uses US dollars as its main foreign money, I don’t even want to change my money over to invest there.
There’s also plenty of nice investment opportunities there. In truth, you should purchase metropolis middle flats in the capital, Phnom Penh, for remarkably low costs and earn big rental yields and appreciation returns.
So, while I personally wouldn’t need to stay there, Cambodia is a wonderful place to invest thanks to its ultra-cheap property prices and quickly growing financial system.
Executing your Global Citizen Sandwich
Now that you simply understand how you should use the worldwide citizen sandwich to create an internationally diversified way of life, it’s now time to make your personal.
As you start your offshore journey, understand that you gained’t give you the chance to make your international citizen sandwich overnight. It shouldn’t be a PB&J that you simply slap collectively rapidly – it must be a gourmand meal that takes time to put together.
You also need to assume holistically as you make your international citizen sandwich. In case you plan on investing in Cambodia, as an example, then storing all your wealth in Bermuda wouldn’t make much sense. You’ll be able to’t blindly slap elements together and hope for the most effective on the planet of offshore planning.
Nevertheless, you don’t necessarily need to pigeonhole yourself into one specific area to make a cohesive offshore technique. Whereas individuals just like the regional story like my Southeast Asia example, you will get away with dwelling, banking, and investing nearly anyplace if the pieces match together.
If you’d like to stay in Europe, for example, you possibly can reside in tax-friendly Bulgaria whereas banking in Switzerland and investing in Armenia. The chances are virtually infinite.
So, with those issues in mind, let’s speak about how you can begin making your sandwich.
Open a Bank Account
One of many first steps that I typically recommend is to open an offshore checking account.
To return to my Asia example, one of the issues that I like to recommend if you’d like to arrange a base in Southeast Asia is to travel to Singapore and open a checking account. If the bank asks you why you want to open the account, you should use the truth that you’re considering of shifting to and investing within the region as a wonderfully valid cause.
The same goes for almost another country that you simply’d want to bank in, whether or not it’s Switzerland, the US, or Georgia.
For probably the most part, opening an offshore bank account continues to be relatively accessible for most people – especially in case you’re planning on dwelling within the region that you simply’re opening an account in. Chances are you’ll need to fill out extra paperwork than in years past, but offshore banking is usually a good way to dip your toe into a more diversified way of life.
Discover a Place to Reside (and Get a Residence Permit)
The next step, then, can be to get a residence permit in a rustic the place you want to stay.
Figuring out where you want to go is usually a matter of choice. Your very best way of life is going to look totally different from mine or someone else’s, so your first precedence when selecting the place to reside must be your needs.
Nevertheless, there are two practical elements of this determination that everybody ought to bear in mind – ease of immigration and tax-friendliness.
Getting a second residency is a bit more concerned than opening up an offshore checking account. In addition to a rustic’s basic livability, you’ll need to contemplate points like investment necessities and potential for citizenship, and you have to additionally take a look at how that residency will impression your tax planning.
Put merely, you don’t want to transfer to a country where you’ll be continually battling with immigration to keep there, and you don’t need your residency to throw off your tax strategy. Peru, as an example, is a reasonably livable nation with a simple second residency program, however you’ll doubtless find yourself paying fairly a bit in taxes there to keep your residence permit.
These reasons are why Malaysia is the right place for me to go in Asia. I take pleasure in dwelling in Kuala Lumpur on a private degree, however it additionally works for me on a practical degree. I can easily get residency there by way of the MM2H investor visa program, and it’s a territorial tax country with relatively low taxes basically.
Seek Out Funding Opportunities
When you’ve found a place to bank and a spot to reside, you possibly can then get to the exciting part – looking for out funding opportunities overseas.
To seek out the perfect funding opportunities, you must look toward up-and-coming markets which may not be best places to stay, however have skilled consistent progress over the past decade or so. While these markets definitely carry a great quantity of danger, additionally they have the best potential for a big return on your funding since they’re typically underpriced.
You’re going to find a majority of these markets in places like Cambodia, Colombia, and sure elements of Africa.
The most effective methods to make investments overseas is to buy low cost real estate in these kinds of rising markets. In Cambodia, for example, you should purchase flats, business actual estate, and even entire buildings for as little as $750 per sq. meter.
While this a part of the method is definitely exciting, nevertheless, you may want some skilled advice to do it proper – notably in the event you aren’t very acquainted with the country that you simply’re investing in. In truth, my staff and I typically hunt down local contacts when in search of funding opportunities for myself or my shoppers.
Broaden your Offshore Strategy
After you’ve made your international citizen sandwich, your work shouldn’t be finished. As an alternative, you must use this strategy as the inspiration of your broader offshore technique for a wealthier, freer, and happier life.
When you lastly move your life offshore, an infinite collection of prospects will open up to you. You may want to go and create a world CD ladder to develop your savings, or you could hunt for thrilling investment alternatives across the globe.
Put merely, the worldwide citizen sandwich isn’t the end-all-be-all of all offshore strategies. It’s, nevertheless, a great way to get started planting flags around the globe and building a world way of life.
When you’re considering of taking the leap to go offshore and want a bit extra course, I recommend that you simply apply for a technique call. My workforce and I have helped plenty of individuals identical to you begin constructing a Nomad Capitalist way of life and go the place you’re handled greatest.
Andrew Henderson is the world’s most sought-after marketing consultant on authorized offshore tax discount, funding immigration, and international citizenship. He works solely with six- and seven-figure entrepreneurs and buyers who need to “go where they’re treated best”. He has been researching and truly doing these things personally since 2007.