First Flag: PASSPORT AND SECOND CITIZENSHIP
A second passport from Canada, Brazil, Italy or Australia. In addition to the passport of your native country, you should hold one or more passports from small, neutral and respectable nations. They do not try to tax their citizens living outside their territory, nor to draft them into military service. These passports should ideally allow visa-free access to as many nations as possible. For ease of travel, we recommend European Union followed by Latin American passports. These should be from a country unconcerned about its offshore citizens and what they do outside its borders. There must be no tax or military requirement for non-residents. Passports must be available to foreigners relatively easily. Dual or multiple nationality is one of the cornerstones of the PT philosophy. The PT should strive to have several passports regardless of original nationality. A second passport always comes in handy and has often saved the skin of many an individual during times of war, persecution and political upheaval.
Second Flag: RESIDENCE AND DOMICILE
A legal or fiscal address in Monaco, a Channel Island or Andorra. These should generally be in a tax haven with good communication systems. A place where wealthy, productive people can be creative, live, relax, prosper and enjoy themselves, preferably with bank secrecy and no threat of war or revolution. Monaco, the Channel Islands, Campione, Andorra, Bermuda and the Bahamas are all recommended. Dominican Republic and other Caribbean islands are good second-rate contenders. This is your official residence. A country which regards you as a bona- fide resident, although you might not actually spend too much (or any) time there. It should be a country which does not tax income earned abroad, the effect being that you don’t have to file any personal tax returns anywhere. Tax havens like Turks and Caicos, Panama and Andorra are good low-budget candidates. Bermuda, Liechtenstein, Switzerland and Monaco are more up market – if you can afford them. In the first world, the UK, Italy and Ireland are also worth considering because of their no-tax treatment of foreigners. Most Asian, Central and South American countries do not tax offshore incomes, and many of these countries, like Paraguay (and believe it or not, North Korea!) have no income taxes at all. They are de-facto tax havens. But then again, the whole world is a fiscal paradise for PTs who arrange their paperwork properly.
Third Flag: BUSINESS BASES
A business or source of income in New York, London or Singapore. These are places where you actually earn your money. If you own an existing business that can’t be moved, you may not have much choice in the matter: you may have to bite the bullet and pay some taxes. Almost all businesses can be gradually shifted abroad by outsourcing and exporting more. If you earn money with your skills, you can probably re- domicile and operate in cyberspace (on the internet). Or choose an offshore tax haven as your physical business base. Then you are tax free. Either way, your business will be incorporated, to insulate against personal liability. Ideally, you will set up the paperwork properly and you will never have to file personal tax returns, nor need any permits, licenses or special dispensations.
Good access to contacts, labor markets or materials is also important. London, Tokyo and New York are the big centers for finance and insurance. Zurich, Milan, Singapore and Frankfurt are among the second-ranked contenders. But in today’s global economy, you could frankly base your business anywhere. Wild-card contenders such as Estonia, Malaysia or Panama are out there competing to offer you a business haven. They all deserve a serious look. They should also be places that give free land, grant interest-free loans and offer a tax holiday to your business without subjecting you to overregulation. Good access to markets, a cooperative workforce and needed materials are also important. London, Tokyo and New York are the big apples for finance and insurance. Zurich, Milan, Singapore and Frankfurt are among the good second-rank contenders. Even oppressive regimes like China, Russia and the CIS countries will offer interesting concessions to the PT interested in manufacturing, assembling or distribution.
Fourth Flag: ASSET HAVENS & MANAGEMENT
These countries are where you keep your savings and investments, safely salted away from where your money is actually earned or spent. They should score highly on respect for privacy, communications, professionalism and stability. Your assets, kept in secret numbered accounts, will be controlled with hacker-proof encrypted electronic messages or personal visits only. Naturally, you don’t live, play or do much business in the place where your assets are discreetly planted.
And it is important to have a banking passport from a country that does not (by treaty or otherwise) insist your banking haven give them a full dossier on your activities. You can have several asset havens. Top-ranked candidates include Liechtenstein, Switzerland, or Austria for non-EU or US citizens. Bankers in other locations may not yet be up to the Swiss standards, but they fly under the radar and are more accessible to people with moderate wealth.
Fifth Flag PLAYGROUNDS
Friends and fun in Paris, Bangkok, Manila, Buenos Aires, Sydney and San Francisco. These are the places where you actually physically spend your time. Quality of life is top priority. Normally, because of legal restrictions on how long one may stay without being considered resident for tax purposes, it is necessary to have from two to four playgrounds, although other arrangements can be made if you want to spend all of your time in one playground. However, for the most part, the PT should try to avoid spending more than 90 days per year in any particular country. My personal recommendations. For no nukes and good fishing: New Zealand. For the most interesting sex life imaginable: Thailand, Costa Rica or the Philippines. For a superb year round climate: San Diego, California, USA, nearby Cabo San Lucas at Baja California (Mexico) or Queensland, Australia. For the gourmet in you: the French Riviera or Hong Kong. For stimulating parties and an active social life: Paris, London or San Francisco. For the best things at the cheapest prices: Singapore, Taiwan and Hong Kong (for consumer goods), Denmark (for cars), Ireland (a summer home), Punta Del Este, Uruguay (winter home).
Sixt Flag ELECTRONIC HAVEN IN CYBERSPACE
In cyberspace, you can be everywhere and nowhere at the same time! This is your Internet Business, Communications and Cash Transmittal System. It’s so cheap to rent server space that it doesn’t matter much where your servers and websites are located. You can be physically anywhere, but invisible to all. Have a few servers, and offshore sites. Best for them to be in places like Taiwan, Costa Rica or Panama – or on far off islands, like Tuvalu or Niue.
Better still, why not just totally distributed so you can change jurisdiction automatically every two seconds – technology makes it possible and it is becoming easier by the day. Your internet presence should emanate from any place where the net is unregulated and untaxed. Your electronic base should be anywhere – where you are not. With no physical presence, you can’t be served with process or sued. Your encrypted communications, files and data banks will be safe from private or government snoopers. If ‘authorities’ in your server’s host country bother you – or if an ISP gives you grief – you just press ‘delete.’ With your sixth flag you can take advantage of many new opportunities in the 21st Century Information Age.
Your electronic base should be anywhere – where you are not. With no physical presence, you can’t be served with process or sued. Your encrypted communications, files and data banks will be safe from private or government snoopers. If ‘authorities’ in your server’s host country bother you – or if an ISP gives you grief – you just press ‘delete.’
With your sixth flag you can take advantage of many new opportunities in the 21st Century Information Age. Virtually all the reports in the Bye Bye Big Brother series deal directly or obliquely with selecting and setting up your six flags. Understanding the six flags theory is vital. We strongly recommend you re-read it a few times so you can think more about it. Until you get there, keep working at it. One flag is better than none. Two or three flags are better than one!