What Is Flag Theory? Story of A Perpetual Tourist In Search Of Tax Havens
Do you want to maximize your financial freedom? Consider planting flags in countries that offer you the best services. Think of it as a form of diversification. Just like you shouldn’t put all your eggs in one basket, you shouldn’t avail only one country’s legal and financial services.
If you’re sick of incessant government taxes, consider diversifying your options in the form of offshore incorporation. After all, your hard earned money isn’t the right of any government.
If this mentality was the norm, governments around the world wouldn’t dare introduce tax policies at the expense of their citizens.
What Is Flag Theory?
Flag theory revolves around the concept of international diversification. It highlights a way forward for entrepreneurs wanting to leverage minimized tax collections.
Perpetual tourists are ‘citizens of the world.’ They’re constantly on the move in search of tax havens to safeguard their money. However, you can remain in one place and still reap the benefits of flag theory.
Why You Need To Follow Flag Theory
Harry Schultz invented the dynamic flag theory. Originally, it was based on three main ideas:
Live in a country where your foreign-source income isn’t taxed
Singapore is a country where citizens can avoid paying local taxes while earning money from any country in the world. In short, they avoid territorial taxation.
The reason for having a second passport is so attractive is because they allow you to avoid nationality-based taxation. Those who renounce their nationality and earn money outside their country of origin don’t have to let go of their hard-earned income in the form of nationality-based taxation.
Live in a country that values you
As a perpetual tourist, you generally stay in a single country for no longer than six months. You can travel to the most attractive countries in the world while enjoying foreign income exclusion.
Keep your assets in stable tax havens
If you’re eligible for Foreign Earned Income Exclusion, consider offshore company formation. It’s recommended to choose countries like Seychelles, the British Virgin Islands, the Cayman Islands, or Nevis. Non-domestic companies operating in these countries aren’t usually subject to income taxes.
Free Yourself From The State
Did you know that there are thousands of successful Expats around the world who are building their businesses abroad and have eliminated their tax bill? Get in touch with Mikkel Thorup to internationalize your business.