Have you ever wondered what a Perpetual Traveler is? It’s not just a buzz word, it goes beyond that.
The Perpetual Traveler or PT is a person who has learned the art of freeing himself without losing his rights and advantages as a citizen of the world.
So, for example, you could choose Panama for your tax residence, the Emirates as a place to have your business, Dominica as a country for your second passport, Singapore to keep your money and Thailand as a country to have fun in.
The permanent traveler diversifies, keeps the best of each place and gets maximum independence from the different states.
Perpetual Traveler = Permanent Tourist = Prior Taxpayer
The perpetual traveler can decide to live as a perpetual tourist and enter countries always with tourist status. Of course, there is no law that forbids you to have an online business like PT.
Entering the countries you visit as a tourist, of course limits the time you can spend there. In some countries you can stay only 30 days, others limit the stay to 3 and then you have others like Mexico that allow you to spend up to 180 days.
Of course, if at some point you want to extend your stay, you always have the option of the run visa.That is, you can travel to a neighboring country and come back the next day with a renewed visa (this is an option that should not be repeated too often as it can cause problems).
However, if you want to maintain your PT status, it is important that you do not stay in any country longer than you are classified as a tourist, especially if you are in a country of which you are a national.
This way you will not become a tax resident and will not have to pay taxes there on your universal income.
Of course, as a perpetual traveler you can also decide to become a resident of one of the countries you visit.
There are many countries in the world, such as Panama, Paraguay, Georgia, Cyprus, Emirates, Thailand, etc., where you would not have to pay taxes
The abbreviation “PT” does not only refer to the perpetual tourist or It also refers to the PT as a permanent or even ex-taxable tourist.
Your tax liability depends on several factors.
The first of these is nationality, a factor which is only decisive in the case of the USA and Eritrea. These two countries are the only ones that tax the income earned by their citizens even if they live abroad.
Then there is the factor of stay. In many countries, the 183-day rule applies. In principle, as long as you spend less than 183 days in the country, you are not considered a tax resident, so you would avoid paying taxes in the country.
There are of course more factors, such as housing, economic, social and family ties
In the end, you can even avoid some of the indirect taxes
As a resident of Mexico, Argentina, Colombia or any other non-European country, you can recover VAT on your purchases within the EU.
The same applies if you make purchases outside of Europe as an EU resident. There are many cases in which you have the option as a foreigner to get a refund of this tax.
Other advantages of PT
Of course, being a PT doesn’t only have advantages from a tax or security point of view, it goes beyond that.
PT’s rarely live in their home country, and that alone makes them special. They are usually people of the world who have left their comfort zone and are open to new experiences and information.
The Perpetual Traveler is a person who thinks differently.
One of the big problems for most people is that they try to get special results by doing the same things that other people do. This, of course, is complicated.
The average person goes to college, gets his or her degrees, does an internship, and then applies for a job or a competition hoping to be selected from hundreds of candidates.
The perpetual traveler turns things around, doesn’t play by the rules. He sets up his own business, invests the money he earns, if he can’t do what he likes where he lives, he goes elsewhere and, of course, if the state stifles his business with regulations and taxes, he moves it elsewhere…
The Perpetual Traveler has the advantage of geo-arbitration.
Geo-arbitration consists of taking advantage of the characteristics of the different zones/countries of the world.
As a PT you can sell your products or services in rich areas, used to pay high prices and produce the products or develop the services in areas with the necessary infrastructure, but more convenient from the point of view of salaries, laws, taxation, access to labor, products or materials you need.
This is not only true for your business, but also at a personal level you can choose to earn your money in a strong currency or in a country where it pays well and live in another where living expenses are much lower.
For example, you could earn your money in Ireland and live in Paraguay. Or you could have your clients in the UK and live in Thailand.
The perpetual traveler is better connected.
As you will find out as soon as you start moving there are many people out there who, like you, have decided to move on and look for something else. You are linked to them by an invisible bond and a need to meet new people to support you and them.
This is not usually the case when you are in the place where you were born, because the people around you are always the same, and because the people around you don’t have time to dedicate to you, as they have enough of their usual friends, work colleagues and family.
The Perpetual Traveler finds more (business) opportunities.
Being better connected has many advantages, among them that you will come across more business opportunities.
As soon as you stop living like everyone else you will start coming up with lots of new ideas, you will find things in other fields and cultures that will catch your eye and you will be able to try to adapt to other markets you already know.
Also, you will meet people who are doing lots of exceptional things and you will be able to ally yourself with them.
You can learn a lot of new things, especially languages.
Even if you only move from the UK to Malaysia, or from Mexico to Uruguay, you will have the opportunity to meet a totally different society and expand your personal and professional horizons enormously.
How do I become a Perpetual Tourist?
Well, if you have already convinced yourself of the benefits of becoming a Perpetual Tourist, the next step is to tell you how you can become one.
As we said before, the “Prior Taxpayer” or ex-tax payer does not pay taxes, but in order to stop paying taxes he has had to stop being a taxpayer in his home country. Therefore, the first step is to get yourself discharged as a tax resident.
The steps to be taken in order to withdraw from the country of which you are a national usually consist of
- You leave your home in the country of which you are a national and cancel everything that could give you an idea that you are still living there.
- You move to another country where you can easily become a resident, this will be your bridge country. If you are from the EU or have facilities to get a residence there, you can move to Cyprus or any other European country.
- You register as a resident, for this, you will have to get a house (usually a room in a shared apartment is enough). You will also need health insurance and you must be able to prove that you have a minimum income.
- Once you have registered in the bridging country you will notify your country of origin of the change of residence so that they can cancel your registration as a tax resident. It is likely that you will be asked for some kind of document to prove that you have a new place of residence. The consulate in your country can often help you with this.
- Once you are discharged from your home country, you can leave your new home and discharge yourself directly in the bridging country. Depending on the case, it is usually sufficient to let the visa or permit expire or not to renew it. If not, you will have to go to the city council or the entity in charge of the cancellation for foreigners.
In case you are not a national of the country where you live (that is, if you live in a country as a foreigner), the steps are easier:
- Leave your home in the country you are not a national of and cancel everything that could give you an idea that you are really still living there.
- You go to the town hall or relevant entity to inform them that you are going to leave the country and ask to be discharged as a resident. Usually, they won’t ask you for more information, but in case they ask, you should be able to tell them something, maybe you’re going back to your country or you have a girlfriend or boyfriend in another country and you’ll see how things go. You can also choose to let your visa or residence permit expire.
- A last call to the tax office to make sure you have been discharged may save you problems later.
- Whatever your case is, once you have obtained your discharge it is essential that you take into account the laws of the different countries through which you pass so that you do not become a tax resident by accident.
In principle the most important thing is not to have any housing at your disposal and avoid approaching the 183 days of stay in any country, however, the rules can be much more complex depending on the case (UK is known for its complex test of residence).
The 13 Flag Theory
The Perpetual Tourist knows the best offshore strategies and applies the flag theory to internationalize his life and thus live more freely and safely.
The Flag Theory does not have to have a fixed number of flags, however, this time we will talk about 13
Below you have the 13 flags in a summarized way:
- Get a passport or citizenship in a country that does not charge you for it and gives you the ease of movement and security without controlling you too much in return.
- Set up your tax residence in a safe country, preferably without taxes on your income.
- Set up your company in a jurisdiction where you do not pay taxes or have to present an accounting.
- Keep your assets in a safe place that protects your privacy, preferably a place with no estate taxes.
- Choose your leisure places in countries that allow you to enjoy life as you like.
- Set up a digital business (or convert the one you have to this medium). Take into account security, data protection and other key points when choosing a server, domain and email service provider.
- Get the most out of health tourism. If you have a health problem, go to the place where it can be treated better and at a better price.
- If you are going to get married, make the most of it. Get additional passports, tax advantages.
- If you are going to have children, offer your descendants the greatest possible advantages (nationality by place of birth).
- Hire employees and virtual assistants, preferably in a low-wage country that speak the languages you need and have the knowledge or specialties you are looking for.
- Don’t get carried away by the masses when it comes to the education of your children. Consider alternative options (here I talk about the advantages of non-directive education) such as homeschooling, unschooling, worldschooling and choose a country where the option you have chosen is legal (or at least possible).
- Protect your privacy. Choose options (and tools) that allow you to live a safe and uncensored life in this regard.
- Consider the options you have to make sure. There are a lot of different types of insurance, with totally different benefits and costs depending on the country from which you take them out.
The best places to live and work
Of course, knowing what the flags are is not enough. To live as a Perpetual Tourist it is crucial to know the game board in depth, you have to discover in which countries they can plant their flags.
Although it is important to have your assets well protected, quality of life is always the deciding factor.
As a Perpetual Tourist, you have the unique opportunity to try out all the places you want to live until you decide which one(s) are your favorites.
Once you have found the place where you want to settle down, you can do it as a PT, but taking advantage of the characteristics of many other places you have visited during your trip.
Few are made to travel permanently, most need breaks or stop at some point.
This does not have to change anything regarding your independence from states, since your knowledge of the world allows you to place the flags wherever you want and change them if necessary.
As a Perpetual Tourist you know that you can leave the country at any time.
This would be for me perhaps the definition of PT, applicable also to true digital nomads:
“People who can leave any country from one day to the next without any great problems”
After all, mobility and flexibility are the great strengths of the Perpetual Tourist. When you are mobile and able to adapt you are anti-fragile, you don’t break under pressure, you benefit from it.
There are always events that harm certain countries but benefit others. Switzerland is a good example of this. A country that has always known how to stay out of the biggest world crises.
As a Perpetual Tourist:
You have a stateless mentality, you don’t let yourself be trapped by illogical patriotic feelings that would end up depriving you of your freedom.
Instead of living without a State, you live taking advantage of the best of each State
You take advantage of the power of the internet to increase your freedom and create a life that does not limit you, that does not tie you to any place or state.
You understand that you can design and live your life the way you want, according to your tastes, expectations and ideals, and you act accordingly.