Offshore Investing and Life As An Expat Interview With Mikkel Thorup

Do you like the country you live in? Have you imagined living in another country? What about investing in another country?

On this week's show we discuss a lifestyle that many imagine... and only a few really live. The life of an expat, living overseas, making money while you travel, and offshore investing. I really enjoyed this interview with Mikkel Thorup. He is a seasoned traveler and teaches others about how they can live this lifestyle as well. 

offshore investing


The Flag Theory: A Flagship of Financial Libertarianism

by Mikkel Thorup, EscapeArtist.com

People want more freedom today; not just the privileges to work or to express their political opinions, but financial freedom where they can choose how they pay taxes and protect their assets. 

Growing political and economic instability in many countries have made people lose faith in their governments and question if paying all the heavy taxes on their hard-earned money is even worth it; if being linked to national identities makes sense in the world that’s so connected and if the government’s control on their lives is fair. 

The flag theory is what has emerged as a result of these questions about one’s liberties. 

 

A Quick Look Into When It Started

The concept was introduced by Harry Shultz, an American investment advisor in the 1980s. Shultz endorsed the idea of having a second passport, of having residency in a tax-free country and introduced the world to asset protection strategies. The concept has gained popularity recently as more people want to structure their lives to get tax advantages in different countries. 

 

What’s The Flag Theory? 

The flag theory is an internationalization strategy that’s achieved by planting different flags in countries that best favor your situation. It helps you minimize your tax obligations to the government and maximize your privacy so you get more personal freedom. 

The idea is to base different aspects of your life in different countries in a way that you don’t become a resident in your country of birth and hence you’re not liable to pay taxes that other residents are entitled to pay. It’s a great way to protect yourself, your family, and your assets from shaky economies and precarious political conditions in your home country. 

There are a number of ways you can become a flag theorist, of which a few are listed below.

 

Obtain a Second Passport

There are contrasting opinions about having a second passport. Some people think it’s illegal and unethical; some think there are no additional benefits of having a second passport. Let me tell you that both these notions are wrong and based on assumptions. 

If your country allows dual citizenship, getting a second passport is legal. If you’re a perpetual traveller, having two passports means you can access a number of countries without a visa or with a visa on arrival. It also broadens your options for work permits. For example, if you get your second citizenship in a European country, it becomes very easy for you to get a work permit almost anywhere in Europe. 

 

Becoming a Resident in a Low or No Tax-country

Most countries have a residential tax system; which means you’re taxed on your income generated within the country. Some countries have 183-day rule under which, if you live in a country for half the year, you’re entitled to pay the taxes as a resident. So if you don’t want to pay the resident taxes, you can manage it by following the 183-day rule. 

If you’re a U.S. national—irrespective of where you work or reside—you’re liable to pay taxes on your worldwide income until you hold the U.S. passport. One way to get some tax relief is by applying for Foreign-Earned Income Exclusion if you’re a legal resident in another country.

Some countries that levy no or low taxes on their resident include Qatar, Hong Kong, Cayman Islands, the British Virgin Islands, and the Bahamas. 

Panama doesn’t levy taxes on your foreign-sourced income. You can become a resident of Panama through its Friendly Nations Visa Program, which is one of the simplest and easiest ways to obtain a second residency.  

Malta is a good option for people who want to base themselves in Europe but want to spend maximum time travelling because it doesn’t tax its residents on the worldwide income. 

 

Incorporate Your Company in an Offshore Tax Haven

Some countries are considered tax havens for businesses because they have minimum barriers and low tax liability for incorporating businesses. These countries don’t require the business owners to reside or do business in the country of incorporation. Some of the leading companies like Apple, Microsoft, and General Electric have their subsidiaries in offshore locations. 

According to a study, 73% of Fortune 500 companies use offshoring strategies for tax purposes. 

When your company is incorporated in a tax haven country, you’re not taxed on the income generated outside the country. If you’re a traveller and run an online business, you need a base to register your business and a tax haven is the best place to do it. You can operate from anywhere in the world and pay no taxes on your income. 

The Netherlands is the most popular tax haven among the Fortune 500 companies. The Cayman Islands levy no taxes on income, payroll, capital gains, and corporate taxes on foreign-sourced income. Countries like Belize, Bermuda, and the UAE also offer a number of tax benefits to offshore companies. 

 

Keep Your Assets in Secure Jurisdictions

Secure jurisdictions mean countries that have stable economies and politics and are renowned for their banking systems. These countries are the best places to protect your assets because it’s highly unlikely that such countries will run into a financial crisis and confiscate the assets of its residents. It’s also recommended to keep your assets it in different countries to minimize the risk against inflation and political unrest. 

Countries that have good banking systems have strong privacy laws for offshore accounts that inhibit banks from revealing information about their clients without their consent; so no one but you has access to your accounts. 

While some countries can be excellent for protecting your digital assets, their weak cybersecurity can be a bad option for your digital assets. Digital assets include the patents of your company, your company website, and photographs. Countries like Norway and Iceland have excellent data security laws that protect digital assets from theft

 

Invest in Real Estate in a Low Property-tax Country

While you travel the world, there are some places that you fall in love with and wish to keep returning or where you see your future once you’re ready to settle down. Investing in property is a great way to prepare for it to build your base in that country. Invest in real estate in countries that have low tax on property like Chile, Fiji, Georgia, and the Cayman Islands. 

About The Author

Mikkel Thorup is the Director at EscapeArtist.com the oldest and largest offshore website in the world and hosts The Expat Money Show podcast. He is also the author of #1 Best-Selling book Expat Secrets on Amazon. Mikkel has spent over 20 years in continual travel around the world, visiting more than 100 countries including Colombia, North Korea, Zimbabwe, and Iran. His goal is to help people just like you to generate additional streams of income, legally eliminate your tax bill, and take advantage of offshore structures so you can travel the world freely and never have to worry about money again. Follow Mikkel Thorup on Twitter @ThorupMikkel

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It doesn’t cost much to start, and you get access to a portfolio built around your risk tolerance and your goals. Using Modern Portfolio Theory, pioneered by a Nobel laureate, Betterment can help you build wealth without getting caught up in the noise of the market.


Today's Guest:  Mikkel Thorup

Mikkel Thorup is the Director at EscapeArtist.com the oldest and largest offshore website in the world and hosts The Expat Money Show podcast. He is also the author of #1 Best-Selling book Expat Secrets on Amazon. Mikkel has spent over 20 years in continual travel around the world, visiting more than 100 countries including Colombia, North Korea, Zimbabwe, and Iran. His goal is to help people just like you to generate additional streams of income, legally eliminate your tax bill, and take advantage of offshore structures so you can travel the world freely and never have to worry about money again. Follow Mikkel Thorup on Twitter @ThorupMikkel .

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Today's Panelists

Do you need a Financial Counselor? Interview with President of the AFCPE, Rebecca Wiggins

Rebecca Wiggins, Executive Director of AFCPE has done a great job of bringing more financial help to the public. The AFC® designation (Accredited Financial Counselor®), focuses on providing help to people on the numbers side of finance, but also the emotional side of numbers. 

We discuss the emerging side of financial advice and why it is necessary to fill some voids in the personal finance space.


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It doesn’t cost much to start, and you get access to a portfolio built around your risk tolerance and your goals. Using Modern Portfolio Theory, pioneered by a Nobel laureate, Betterment can help you build wealth without getting caught up in the noise of the market.


Today's Guest:  Rebecca Wiggins

Rebecca Wiggins is the Executive Director of the Association for Financial Counseling and Planning Education® (AFCPE®) where she leads the professional membership and certification organization for the field of financial counseling and education and provides an annual research and training symposium for field professionals. She is a hands-on executive with over 15 years of experience in nonprofit organizational management. As a respected leader, she has built motivated staff teams with strategic vision and diligence, while optimizing operational efficiencies and creative opportunities. 

Ms. Wiggins holds a Masters of Family Financial Planning and a Masters in Business Administration. She is deeply committed to AFCPE’s mission and focused efforts to build, support and ensure the integrity of the Personal Finance profession and improve the economic well-being of all individuals and families worldwide.

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Today's Panelists

Budgeting Made Easy – How To Get Good At Budgeting When You Hate Budgeting

This week we discuss how to think about budgeting when you don't want to think about budgeting. 

This is a great episode where we discuss a number of related topics to help you improve your money mindset, setting your intentions, making more money vs cutting expenses, creating passive cash flow, how to live on the go with no permanent residence, and more. It is a budgeting made easy episode.

Nick truly (no pun intended) is one of the most interesting people we have interviewed on this show. While I shy away from keeping up with the Joneses and FOMO, Nick takes this line of thinking to a whole new level. He caused me to reexamine my premises. This is something we all should do from time to time.


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Looking for a better way to invest? 

Consider Betterment.

It doesn’t cost much to start, and you get access to a portfolio built around your risk tolerance and your goals. Using Modern Portfolio Theory, pioneered by a Nobel laureate, Betterment can help you build wealth without getting caught up in the noise of the market.


Today's Guest:  Nick True

Nick True is a married twenty-something from Tennessee and father to four fur-children. Through their YouTube channel and podcast, Nick & his wife Hanna write and speak about personal finance, budgeting, and Slow-FI, all while traveling full-time in a 27ft Airstream. Nick is passionate about teaching people to enjoy their money now, while also saving and investing for the future. 

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Current Market Conditions Update, Types of Wealth Management Firms, and Barbipedia

The stock market is approaching all time highs... yet unemployment is somewhere between 13-20%. Prior to the selloff It was below 4%. What am I missing???

How should an investor invest in this market? 

Buy and hold, DCA, market timing, or another secret strategy...

We discuss these issues, the 5 types of wealth management firms, and Barbipedia. We had a lot of fun on this episode. Join us for and market update.

types of wealth management firms


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Looking for a better way to invest? 

Consider Betterment.

It doesn’t cost much to start, and you get access to a portfolio built around your risk tolerance and your goals. Using Modern Portfolio Theory, pioneered by a Nobel laureate, Betterment can help you build wealth without getting caught up in the noise of the market.


Today's Panelists

The History of Money Interview With John Sneisen

Have you ever wondered why there is such a large wealth gap in the US?

Do you know why the middle class is disappearing?

Have you thought about why our financial system is so unstable?

You might be surprised at the answers to these questions. You don't have to look far, because the answers are found in the history of money. Join us this week as we interview money historian, John Sneisen on our show.

history of money


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Looking for a better way to invest? 

Consider Betterment.

It doesn’t cost much to start, and you get access to a portfolio built around your risk tolerance and your goals. Using Modern Portfolio Theory, pioneered by a Nobel laureate, Betterment can help you build wealth without getting caught up in the noise of the market.


Today's Guest:  John Sneisen

John is a Best-Selling Author of two books: The End of Freedom: How Our Monetary System Enslaves Us(2014), a world bestseller in the category of Financial Risk Management. Canada, The Greatest Economy In The World? (2015) Which has been a Canadian bestseller in many categories, including Economics, Finance, Macroeconomics and Financial Risk Management. The End of Freedom is an overview over 3000 years of history of money and how monetary pattern repeats themselves throughout history and how to mitigate the hit of these risks. Canada, The Greatest Economy In The World? is a book that takes a grand view of the Canadian Economy and points out the many dangers lurking in the Economic dark that most politicians and economists are not aware of or ignorant of.

 

John is an international speaker. He has spoken in 6 countries on three topics in two languages. John is working closely with world best-selling author G. Edward Griffin as a Leadership Council member of Freedom Force International. John has been interviewed and featured on various Alternative Media and Mainstream Media CBC, BBC, CTV and Citytv. He has written 100's of articles, and some have been featured in InvestitIn, Billionaire Chronicle and The Dollar Vigilante Newsletters. He has also advised two Blockchains Companies, one in the Real Estate sector and one in the Ratings and Review sector.

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Today's Panelists

Smart Beta vs Dumb Beta … Which is Better? A Discussion About ETFs

Is your ETF employing the best strategies for this market?

This week we discuss ETFs and why you should consider them for your portfolio.

We discuss the difference between mutual funds and ETFs, active and passive ETF strategies, Smart Beta, ex-out indexing, quant strategies, gold, and more. 


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Looking for a better way to invest? 

Consider Betterment.

It doesn’t cost much to start, and you get access to a portfolio built around your risk tolerance and your goals. Using Modern Portfolio Theory, pioneered by a Nobel laureate, Betterment can help you build wealth without getting caught up in the noise of the market.


Today's Guest:  Will Rhind

Will Rhind is the Founder and CEO of GraniteShares, a New York City-based ETF issuer that seeks to launch innovative and disruptive investments. Will is an established ETF entrepreneur with more than 20 years of experience in the industry. Prior to founding GraniteShares, he served as the CEO of the world's largest gold ETF owned by the World Gold Council. He was also a senior executive at ETF Securities from 2007 to 2013 as well as a principal at iShares and one of the original team members in Europe.

Will spends his time outside of GraniteShares with his wife and three children. He’s on the Board of Directors of the Bath University Foundation, has a passion for classic cars, Manchester United, and travel – especially back to his roots in Aberdeen, Scotland, “The Granite City.”

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Today's Panelists

Social Security Benefits: What You Need To Know About Maximizing Your Benefits

Are you trying to maximize your social security benefits? 

Confused by the complexity of when to apply?

Looking for someone to make it easy?

This week we interview a social security expert, Devin Carroll about the best practices, helpful tips and tools you can use to optimize your social security benefits.


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Looking for a better way to invest? 

Consider Betterment.

It doesn’t cost much to start, and you get access to a portfolio built around your risk tolerance and your goals. Using Modern Portfolio Theory, pioneered by a Nobel laureate, Betterment can help you build wealth without getting caught up in the noise of the market.


Today's Panelists

The 5 F’s of Financial Fraud

The 5 F's of Finance discusses financial fraud, why it happens, how to protect yourself against it, why smart people are more susceptible to it and more.

The best part about this episode is literally the day we recorded it I got an email that hit all 5 Fs on their first outreach. It was priceless. Most frauds are easy to spot to the trained eye and the diligent investor.

This special episode is the start of a series we are doing on financial fraud.

This is a must listen episode...


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Looking for a better way to invest? 

Consider Betterment.

It doesn’t cost much to start, and you get access to a portfolio built around your risk tolerance and your goals. Using Modern Portfolio Theory, pioneered by a Nobel laureate, Betterment can help you build wealth without getting caught up in the noise of the market.


Today's Guest: Stan Haithcock

Stan The Annuity Man is America’s top independent agent & annuity educator.  He is licensed in all 50 states, has published 7 books on the subject, and has written over 400 articles on the controversial annuity topic.  Known as “the walking middle finger of annuity truth”, Stan only focuses on the contractually guaranteed transfer of risk benefits that annuities can provide.  He has offices in Ponte Vedra Beach & Las Vegas, and has over 3 decades of experience in the financial services industry.

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Today's Panelists

Are Generation 4 Nuclear Reactors The Holy Grail of Energy? Mark Schneider Explains What We Don’t Know About This Secret Trend

This week we discuss the best trend you have never heard of... Generation 4 Nuclear Reactors 

Think about all the problems you think you know about nuclear energy... Those are all solved with generation 4 nuclear reactors. 

This week we talk with the leading expert in nuclear energy who has the ear of both political parties. Big changes are afoot. Find out how you can participate in the trend.


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Looking for a better way to invest? 

Consider Betterment.

It doesn’t cost much to start, and you get access to a portfolio built around your risk tolerance and your goals. Using Modern Portfolio Theory, pioneered by a Nobel laureate, Betterment can help you build wealth without getting caught up in the noise of the market.


Today's Guest: Mark Schneider

Mark Schneider is a nuclear futurist and a leading expert in emerging Gen IV Nuclear. He has a Bachelors Degree in Nuclear Engineering Technology and has spent 20 years working with advanced, small-scale reactors within the US Naval Nuclear Power Program.

Mark dedicates himself to educating the public about the implications of Gen IV nuclear technology. 

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The Wealthy Gardner Interview with John Soforic

Looking to create $20,000 a month in passive income?

We interview the Wealthy Gardener, John Soforic, about how he turned his humble beginnings into a strong passive cash flow, retired at 49 years old and why he has decided to teach others his secrets.


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Looking for a better way to invest? 

Consider Betterment.

It doesn’t cost much to start, and you get access to a portfolio built around your risk tolerance and your goals. Using Modern Portfolio Theory, pioneered by a Nobel laureate, Betterment can help you build wealth without getting caught up in the noise of the market.


Today's Guest:  John Soforic

John Soforic (so-4-ic) achieved financial freedom at 49, retired and then wrote a book for his son called The Wealthy Gardener: Lessons on Prosperity between Father and Son. The book sold 50,000 copies in its first year, became an Amazon bestseller, was translated into three foreign languages, and was recently bought by Penguin.

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