Quote: (06-18-2013 02:25 PM)thegmanifesto Wrote:
I think a lot of you are familiar with Five Flag Theory or Three Flag Theory but I don't see any real threads on the topic or any examples of it being done on here by guys.
In case you are not familiar:
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Five Flag Theory
Perpetual travellers may attempt to organize their affairs around the "Five Flags" theory, arranging for different facets of their lives to fall under the jurisdiction of separate countries or flags. This is W.G. Hill'sown "2 flag" extension of investment advisor Harry Schultz's original "Three Flags" approach.
Whether to minimize governmental interference (via taxes or otherwise), or to maximize privacy, the theory proposes that you arrange for each of the following to be in a separate country:
1. Passport and citizenship - in a country that does not tax money earned outside the country or control actions.
2. Legal residence - in a tax haven.
3. Business base - where you earn your money, ideally somewhere with low corporate tax rates.
4. Asset haven - where you keep your money, ideally somewhere with low taxation of savings interest and capital gains.
5. Playgrounds - where you spend your money, ideally somewhere with low consumption tax and VAT.
Three Flag Theory
The general basis of the Three Flag Theory is:
1. Have your citizenship somewhere that does not tax income earned outside the country.
2. Have your businesses and speculations in stable, low or no tax countries.
3. Live as a tourist in countries where what you do for a living is valued, not outlawed.
In recent times, PTs are revising the Flag Theory and looking beyond planting just a few flags.
http://en.wikipedia.org/wiki/Perpetual_traveler
Is anyone doing this on here?
If so, can you share your experiences?
What would be good countries for each "flag"?
What are some sample situations that you guys like?
(Not sure if this should be in Lifestyle or Travel, feel free to move it if you think it would be better suited there.)
The choices for each flag is very personal so what is good for one isn't necessarily for another. I'm doing this now and my structure is quite complicated due to the nature of my business and the extent that I want to be covered.
Also, here are a couple of things to also note:
1. Passport and citizenship - not only in a country that does not tax money earned outside the country or control actions but also one with a passport that allows visa free entry to the most countries possible.
2. Legal residence - very personal. Néchin and Campeone d'Italia might be good for some people but might not be for you.
3. Business base - I would suggest bases with an 's'. Also depends on what type of business: ad revenue from your blog, online trading, a startup, import/export, etc.
4. Asset haven - I would also suggest havens with an 's'. Don't have your eggs in one basket.
5. Playgrounds - shouldn't be on this list. You go where you want to go.
For ideas on which countries might be a fit for you, check out the list of countries where you can set up a corp or trust at http://www.wwincorp.com