Your Realistic Plan to Pay Zero Tax Without Moving Abroad

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There are many myths and misconceptions regarding taxes, international taxes, and tax residency.
International tax myths are common, but can also be very dangerous because one can find themselves in a situation where they're breaking the law due to a lack of knowledge of the rules.
We often get this question ''can I keep living in my high-tax country and pay zero tax''?
We often get this question from residents of Canada, the USA, Australia, the Netherlands, Denmark, France, Germany, Spain, New Zealand, Ireland, etc.
Can you pay zero tax without moving to a tax haven?
What can be done in the case when you don't want to leave your home country? Can you still optimize your taxes?
What is the difference between business and personal taxes in this case? Can you personally pay no tax? What about your business?
Today we are covering this important topic.
Who are we and what do we do?
We are Offshore Citizen team. We help people become global: get a second passport, set up a second residency, pay less taxes, do banking abroad, etc.
We have lots of interesting articles on different topics, we have relevant information up to date.
Author: Michael Rosmer
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/ @offshorecitizen

[@andreas_tech]

a) found a company, that has its headquarter in a low tax country (at least, low tax for foreigners / their companies) b) hire one / a few people, you pay - your headquarter must be physically there c) for hiring people, receive tax incentives. For ex: Romania, you pay only 1% tax (for hiring people) but can live in germany its called 'Doppelbesteuerungsabkommen', a treaty between germany and different other countries, about right taxation / tax cooperation thats it.

[@Vgb_ali_official]

Romania is not stable when it comes to taxes or safe to invest

[@karthikeyankandasami6711]

Excellent video sir. You addressed the often neglected and taken-for-granted aspect of several CBI programs.

[@OffshoreCitizen]

Thanks! Do you have any plans in the making?

[@stephandaley3197]

Michael, the last one you didn’t mention is private placement life insurance options. These insurance tax wrappers are legal boutique structures that are compliant for 0% tax while staying in your high tax country. They can be expensive but they offer great asset protection too.

[@OffshoreCitizen]

Yeah in certain cases that and other insurance options can work though that's typically for investment income rather than earned income

[@VILLVINOUS88]

This was video was gold. Thank yu

[@OffshoreCitizen]

Always a pleasure! Any plans you're working on?

[@LisaCulton]

You have to move. Everything else is folly. (For USA persons)

[@randyleebear]

For US persons, only if you are ready and willing to revoke your citizenship

[@OffshoreCitizen]

Moving doesn't do that much for US persons unless you also renounce or go to Puerto Rico but you can actually build international deferral structures for US persons and can lower the overall rate.

[@LisaCulton]

@@OffshoreCitizen All roads lead to renunciation and you can only renounce once you're gone.

[@mattball7074]

For most people. I say if youre into this sphere and have the wits & capability to make it work.. Chances are youre from a country that should be one that you should move from anyway ahaha.

[@Shabaazs]

Great video Michael, and kinda reaffirms what I decided to do after figuring out this stuff a bit. Bottom line, starting a company offshore and building a local team and having them manage the operations locally is maybe a better way to go about this. You are probably spending a bit initially, and maybe things could work out for good in the long term.

[@OffshoreCitizen]

Just be aware you've got to consider CFC rules & corporate residency rules as well. Assuming those can work out, yes there are often deferral and maybe even optimization possibilities possible. You can also often get lower cost staff.

[@john-s9m3f]

If the management team is local, isn't the company considered a local tax resident? It shouldn't work in that case. The management must be abroad, isn't it?

[@freespiritkaro3414]

This must be one of your best videos, Thank You !!! Please do more of those “proper way of thinking about it & plan” for 1) singles who are yet to build their empires 2) families on the grind, established somewhere but willing to relocate provided the conditions for child-rearing are good 3) senior citizens / retirees, at the top of their empire and adult kids (I feel like most channels tend to cover these as a priority since they are their wealthiest potential clients) But it’s the former 2 undergoing the biggest struggle and needing most education & mindset-shaping to help create anything in the future - for ANY economy to benefit from AND kids -> that is if they can afford to have any! … and lack thereof again, impacting the economies which are making it harder & harder to even own a house… and this loop just never ends… Dire economies shooting themselves in the foot constantly, catering for the wrong crowds. Please create more videos with those former 2 groups in mind, please please 😊

[@nomadic-mind]

Without moving to Puerto Rico I think the most realistic way for an American is pay near zero taxes are to eliminate their income, move to a state with no state income taxes and live on long-term capital gains. You'll still pay sales and property taxes along with negligible capital gains taxes. but it could be possible if you live frugally and have your assets structured correctly.

[@droid806]

Or you move to Alaska, no sales tax, no income tax

[@AZ-kh7np]

If I’m a forex trader in the uk could I form a company in a 0 tax country and call it foreign income? How would the uk even be aware of it? Especially if I’m compounding and not paying myself.

[@fredgreve]

In my own research [watching a lot of your videos :)] I've still not quite understood how governments assume/prove that you are a tax resident in their country, when you haven't registered yourself, haven't stayed longer than 6 months + 1 day and especially when you are moving around in EU countries [no borders]. Can you maybe explain how such a scenario would work? I've heard that when it comes to tax, there is no presumed innocent, rather presumed guilty and the burden of proof is on you?

[@FighterFred]

Yes, but with a Dubai company you don't pay corporate tax for foreign income. Then it depends on the country how high the dividend tax is, in Sweden it's 30%. That's more than 20% lower than a typical tax situation for a Swedish company. Looking at an international comparison, capital taxes vary a lot even within countries. Please explain.

[@OffshoreCitizen]

Dubai tax rates are irrelevant if corporate residency & source income don't match. This is the key mistake people often make you need to start with the rules of your country of residence not the place where you register a company. It's all about the substance behind the structure not just the structure itself. Best is to book a call to discuss details as they might apply to you.

[@hernorossi4365]

Great video. You mention, if you set up a company in the UAE and you have a residence but you don't live there, you still have to pay taxes in your country, is not possible to move your taxation address to UAE?.

[@OffshoreCitizen]

If you don’t live in the UAE you will still be a tax resident in your home country, therefore will be paying taxes in your country. You can pay zero corporate taxes in the UAE, but in order to take real advantage of zero tax environment you’d need to move here

[@hernorossi4365]

@@OffshoreCitizen Thanks for your reply

[@arnoldvosloo220]

Michael, very informative video. I have an idea, which is that trying to play around the rules of your residency country is like a game of cat and mouse. Rules could change, retroactive taxes could come into law, asset confiscation for "greedy business owners" and "tax cheats", etc. If you don't like the rules, and you think you are being treated unfairly in the country you're in, you should move to somewhere that accommodates you. What do you think of this idea? Do you think it's too general? Thanks in advance for your thoughts.

[@OffshoreCitizen]

I think it's a nice idea but it's not realistic for a lot of people Many people have family concerns as a big start. One of the most common reasons clients tell me they can't move is they want their kids to be near grandparents. Then someone might really like where they live so should they leave the place they love to save money? In other words some people aren't going to move or don't want to move and if they are going to stay shouldn't they still optimize?

[@arnoldvosloo220]

@@OffshoreCitizen Good points. Thanks for the thoughtful answer.

[@namalanoi4030]

It's better to relocate or sell everything,but stocks,sit down,chill .

[@OffshoreCitizen]

That's great for if there's other places you'd rather live for sure. Different people have different circumstances.

[@MyLatinLife]

Great one!

[@OffshoreCitizen]

Thanks! Anything you'd like to see next?

[@dailyalien]

@@OffshoreCitizen Yes! Can you make a video about Micro-entrepreneur statuses in some countries? In particularly france has this thing called "micro-entrepreneur" which really helps avoid giant tax & accounting bills especially if your income is less than 78K per year. Would love a video about that!

[@torontovoice1]

Excellent video Michael. A lot of people are well rooted into a high tax country, and would love to be able to reduce their taxes. There is a simple way for Canadians to be able to accumulate tax-free money, and that is through an rrsp. But again as you mentioned, as you dip into it, it's regular income that you have to pay the normal tax on. The big advantage is that you can have the money grow tax-free.

[@daybreaker8811]

You only defer taxes until retirement when you use an RRSP. It is erroneous to say it is a way to accumulate money tax free. At best, you benefit from a lower tax bracket at retirement age than you would have had when you were active.

[@stevenc.6502]

The better way is contributing to a TFSA (Tax Free Savings Account); which can also include investment funds. The RRSP (Registered Retirement Savings Plan), which can also include investment funds, works best if you will be in a lower tax bracket after retirement. The main difference between the two is that withdrawals from the TFSA are untaxed and contributions to the RRSP reduce taxable income, so the RRSP defers taxes but does not eliminate them; while the TFSA can avoid taxes on all income and capital gains generated within the TFSA.

[@arnoldvosloo220]

@@stevenc.6502 TFSA contributions are with after-tax dollars so for many (not all) cases, RRSP vs TFSA is a distinction without a difference. Sometimes one is better than the other. For example, withholding taxes on US investments are lower in RRSPs than in TFSAs because the IRS doesn't recognize the TFSA as a retirement savings account.

[@arnoldvosloo220]

You don't accumulate tax-free $ in the RRSP lol, the opposite. Withdrawals from the RRSP are taxed at your marginal rate.

[@OffshoreCitizen]

There's 3 ways to save on tax. Deferral is one. RRSP and TFSA are both Deferral vehicles. It's fine if you don't ever plan to leave but it's pretty limited.

[@villagerintheshire]

Can you please advise which uploads contain 'source of income' info. Thanks

[@OffshoreCitizen]

Should just be able to do a search on the channel for "source income" can also look up "permanent establishment" or territorial tax

[@radio_nowhere]

7:57 Canada

[@doctorstrange69]

What if you're a citizen of the US, living in the US and you are a 50% (or less) owner of an offshore no-tax company with the other 50% (or more) owner being a non-US foreigner? Can that negate the taxes on your Earned Income?

[@OffshoreCitizen]

Have to separate your income from the company income to discuss this accurately, it also depends on source income rules (residency of the income) & PFIC rules, which are very complex. Best is to book a call or send us a, message through www.offshorecitizen.net to get into specifics

[@kirstythomas4691]

Hi Michael, I live in a country where central management and control is applied. Would I be able to allocate company tax to Dubai if a) I set up a free zone company there with the majority of management decisions and control being done by a director in HK (territorial tax?) b) I either be a minority director of the company on a set salary (which I pay personal income tax on) or subcontract to the company for my services and be a sole proprietor from my location (and pay personal tax accordingly)? Thanks in advance. I really find your videos helpful.

[@OffshoreCitizen]

Details in these things matter a lot, best is to book a call or send a message through www.offshorecitizen.net to get into specifics of what might work for you

[@arnoldvosloo220]

Why can't I comment on your videos?

[@OffshoreCitizen]

You can. We just have to manually go through the comments and approve them. We had issues with scammers and have to be careful to protect our audience

[@arnoldvosloo220]

@@OffshoreCitizen Okay makes sense, scam comments are pretty common. Thanks for replying.

[@GinoFerreri]

What's the Taxation on someone who has European citizenship. I know you're a realtor and not an accountant. Perhaps you know clients or friends who are European or has European citizenship.

[@mrmkburke]

Create a high potential crypto and stock portfolio in a ROTH. LIVE IN FLORIDA.😎

[@hendrixansel9750]

Living in a country and paying taxes to other country is -99999 social credit score. Just pay the taxes in the country that you are in. The country that you are in have full power and full control over you anyway. All this mamo jambo rules that you have to obey in order to save some tax helps only the lawyers for the most part. You either obey the rules (even if it says that you must pay 90% taxes), either leave the country if you hate the laws too much. Trying to find a middle ground where you wanna live in a country, but in the same time you want to escape from the rules of that country, doesn't make any sense.

[@OffshoreCitizen]

Totally depends on your situation. Real life isn't so simple for many people