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#NomadTalks 3: Offshore Theory

Presentation by Jes Black on Nomad Talks on Mar 14, 2016 - CODINO - Community of Digital Nomads Barcelona

Most startup entrepreneurs and digital nomads are quite confused by the rules and regulations and unsure if they can legally reduce or eliminate certain reporting requirements.

Integrating legal and tax strategy into your business plan from the beginning can save you a lot of time, money and hassle.

We will discuss the pros and cons of incorporation in various jurisdictions and compare the two heavyweights for nomads - Hong Kong vs. Panama. This is mission critical for startup ventures as well. We will follow with a “how-to” review of digital banking options, invoicing and accounting firms that can make your life a little bit easier (and tax compliant!).

#NomadTalks 3: Offshore Theory

  1. 1. Offshore Theory Virtual Economies & Nomad Millionaires Virtual PlacesDigital Autonomo
  2. 2. Introduction Part 1 - Why Go Offshore? Part 2 - Offshore is Onshore :) Part 3 - Legal Jurisdictions Part 4 - Best Practices Part 5 - Practical Steps
  3. 3. You THINK You Know Offshore? Those who know don't talk ... & Those who talk a lot don't know.
  4. 4. PART 1 - Why Go Offshore? Simon Sinek
  5. 5. The New GLOBAL Citizen Going offshore allows you to have personal liberty, company freedom & capital mobility Doing so in a transparent, legal way to gain freedom from national laws ~ global citizen
  6. 6. Global Constitutionalism Ronen Palan (2003) Global constitutionalism. Every society adopts an organizing myth, consituting itself in the name of some absent presence: God, the nation, working classes.
  7. 7. The New GLOBAL Citizen Global Citizens have Private Health Insurance, Private Pensions, Pay Tax Where their PC resides Doing so gains freedom from national laws ~ global citizen
  8. 8. But PROFESSORS Talk & Know
  9. 9. Let's Start with Some THEORY offshore ... globalization ... imagined ...
  10. 10. OFFSHORE aides Globalization Nation (Welfare) State (1945- 75) vs. Market (Neoliberal) State Capitalism → Shareholders → Profit Maximization → OFFSHORE London & NYC State Sponsors of Offshore JURIDICAL Finance
  11. 11. NEOLIBERAL Pyramid 60% 30% 5% 4% 1% Neo Lib, NWO, Media Silent Majority Trade, TPP, NAFTA One World Gov, EU State Government
  12. 12. Trump is ANTI - Establishment
  13. 13. PART 2 - Offshore is Onshore
  14. 14. OffShore Is Very IMAGINARY The offshore world completely integrated with onshore world It increases profits for major banks and corporations (and individuals) ~ virtual economies
  15. 15. Virtual Money & Volatility Ficticious Capital Moves Offshore
  16. 16. Who Pays & Who BENEFITS? Former Fed President Fisher: "We Injected Cocaine And Heroin Into The System To Create A Wealth Effect" ... But it did not work .... virtual money It's ALL About Productivity!
  17. 17. Off Shore Globalization IMAGINED If No Productivity, Need Pop+$
  18. 18. Who Pays & Who BENEFITS? The only way the Nation (Welfare) State can coexist with the Market State (NeoLiberal) is if the economy is in constant expansion. Since 2008 we have debt $ system now at peak debt
  19. 19. Off Shore Globalization Imagined So We Need MORE Credit, But....
  20. 20. Is FIAT FINANCING Legal Fiction? Why Does this Matter to Me? If Monetary System Fails to Stimulate Demand You Will Pay! Private Bank Credit→Central Bank Fiat→Government power
  21. 21. But This is Your Situation It's a Prisoner's Dillema
  22. 22. Offshore Under PRESSURE To maintain the current financial system, the fiscal gap to health & pensioners ~$127 T Unfunded Must have rising productivity, population increase and increased credit as money ....
  23. 23. Paper PROMISES > GDP
  24. 24. Peak DEBT Low Productivity Peak Debt and Low Productivity To Pay for Welfare State Must: Debase Currency Allow Increased Immigration Reduce Benefits Raise Taxes Or Just Forgive Debt (Jubilee?)
  25. 25. Is FINANCE Legal Fiction? Taxes are a misguided tool in a pure fiat money economy If you can imagine money into existence, why do you need to tax any of it to pay for services?
  26. 26. Who Will Blink FIRST ? Summary: Something Will Give! But don't expect any favors... First comes higher taxes, then common sense to solve the demographic/productivity "gap"
  27. 27. PART 3 - Legal Jurisdictions
  28. 28. Legal FICTION Just because a corporation is a “person” does not mean that it can be arrested ... False factual suppositions that serve as the grounds for law. LEGAL FICTION ~Ronen Palan
  29. 29. Is FINANCE Legal Fiction? Central banks can print money digitally & give it out but they can't "print" productivity Social contracts should reward productivity over taxes, doing so could afford to "print" a deficit
  30. 30. What is YOUR Legal Fiction? Ok, Won't Happen, So Who Pays? Can you be used as collateral for the government to pay debt?
  31. 31. What is YOUR Legal Fiction? ID Acts "Like" or "Deems" your Person to be like a Company For Tax Purposes
  32. 32. What is YOUR Legal Fiction? Your Personal Corporation (PC) has Benefits AND Liabilities Financial assets can be bought and sold. Social Benefits cannot be bought and sold. But your liablity is an asset to the State.
  33. 33. What is YOUR Legal Fiction? In the USA, you have Federal PC & State PC obligations (Army, Schools, Roads, etc) It is possible to be "double taxed" for being in various states more than 30 days
  34. 34. What is YOUR Legal Fiction? Domicile is determining factor requiring physical presence Taxpayer cannot establish a new domicile unless he or she proves intent to abandon his or her original domicile
  35. 35. Off Shore Globalization Imagined Change your PC Jurisdiction?
  36. 36. We All Have Friends Like This
  37. 37. Capital Savings Capital Savings PC Residency PC Residency Corporate Income Corporate Income Try to Fit YOUR SITUATION Best PC Tax Residency Offshore Company Jurisdiction Capital & Savings
  38. 38. PART 4 - Best Practices WARNING - Most people want results without the sacrifice. In tax issues this leads to trouble (circle or square?)
  39. 39. Warning ~ Its Not That EASY Tax Factorial Formula (x!) (x) citizen living in (x) jurisdiction paid by company (x) with capital gains from (x) investment (4!) 4 x 3 x 2 x 1 = know 24 tax laws
  40. 40. ACCOUNTANTS Are Not Fans Local accountants will not help
  41. 41. Johan Sjögren As well, AEOI, is an agreement from OECD that all bank information in the countries will be shared automatically. Spain will join 2017. Hong Kong 2018. Panama has not yet signed.
  42. 42. LEARN Your Personal Situation
  43. 43. Self Employed Nomads ~ EASY Self-employed digital nomads can still be free but must decide Give up tax residency in one jurisdiction for another one Offshore = Tax Deferment
  44. 44. You Want to DEFER Taxes Reinvest your capital in tax- defered programs (like an IRA) Tax-free combined with the power of compound interest
  45. 45. Offshore and Online is Best Offshore online business builds streams of income outside of your home country. Coupled with an offshore bank account, is the perfect solution ** You might need to move! **
  46. 46. Part 5 - Practical First Steps 1. Know Why You Want To - Hopefully its not just about taxes. Is personal freedom important? 2. Know Your Tax Factorial (x!) - Your situation is similar but MUCH different than the guy next to you :) 3. Find an Accountant - Its not that is hard (per se) Its just got a steep learning curve 4. Put Offshore into Your Life - Go there. Don't listen to "experts" who suffer from "group-think" 5. No Apologies ~ Enjoy It !
  47. 47. Top Offshore LIVEABLE Destinations Uses the US Dollar ~ USAPanama Close to China ~ BritainHong Kong AKA Dubai ~ BritainUAE City State ~ BritainSingapore
  48. 48. Why Even Bother to Do It ? 1 2 3 4 5 Cheaper to Set Up Less Compliance Zero Corporate Tax Rate No Personal Tax Rate Strong Legal Systems
  49. 49. Payment Service Providers PSP 1 2 3 4 5 Paypal, Braintree, Bitcoin WorldPay, Wirecard HSBC for Panama, HK Credicorp Bank, Panama Crèdit Andorrà
  50. 50. If you Don't Move, Consider ... Spain has DTC for both Hong Kong and Panama, so no info exchange today about ownership. But Spain also has a rule that says you must tell the spanish government about everything you own in the world.
  51. 51. If you Don't Move, Consider ... Spain and Italian banks are (technically) bankrupt. Work with the government to report on you if money is sent to Panama or Hong Kong.
  52. 52. If you Don't Move, Consider ... Chose jurisdiction(s) carefully Put ownership of assets in a trust or foundation in one jurisdiction that owns the assets located in another jurisdiction
  53. 53. If you Don't Move, Consider ... If you earn more then 30,000 Euro/month or if you love study taxes, its worth to set up your own structure. If you earn less then 30,000 Euro/month, use a global tax planning company
  54. 54. Sign Up For Beta Testing :)