relocating to the Bahamas

[renee]

I'm thinking of relocating to the Bahamas and do my adsense business from there. I'm looking for feedback from webmasters doing adsense from there.

- are you able to do EFT?
- do you receive your checks in US$? if so, how long does it usually take to get there? any bank deposit issues?

- do you host your sites locally (in the babahas) or is hosting in the US OK?
- what are the US Tax issues?

Thanks

[Hanslicht]

A bit further north.. :-)

Luxembourg is a member of the European Union and the member countries are working towards integration of tax and exchange of personal files.

Other countries I have thought about are Israel, Panama or Switzerland.

[walkman]

and when they catch you...if you're lucky to escape jail, you'll owe double in penalties. People try these things in US too, but IRS sues /investigates accounting firms who do the schemes, and drops /lessen the charges if they give up the customers list. Eventually you're bound to get caught, especially now with laws " to cut off the terrorist finances".

"I can now cash the money from bankomats, here it is up to 500 USD pr. day, use it when buying stuff anonymiusly (not plane-tickets, hotels, cars, real-estate but nearly everything else). This setup is very hard to track."

[fischermx]

The USA is one of only 4 countries in the world that taxes its citizens wherever they live in the world - every other country allows you to legally avoid tax by simply moving to a tax haven country

Care to tell which are the other 3 countries?

[OptiRex]

Luxembourg is a member of the European Union and the member countries are working towards integration of tax and exchange of personal files.

Precisely why any intelligent person would vote against this flawed and corrupt proposed EU Constitution which the Germans, of all people, were not not even allowed to vote for or against in a referendum!

Oh, said Herr Shroeder to the Bundestag last week, "Don't worry about the small details!"

Thank you sir, I will not...:-)

[walkman]

I agree. Each nation is different and shoudl remain that way. Why would you care of what, let's say Greeks, think about an issue if you're Spanish?

[gamiziuk]

Forget about the Bahamas.

I live in Florida. We had 4 unwanted visitors last year (Charlie, Frances, Ivan, Jeanie). At least in Florida I was able to run for higher ground when hurricanes come. Those poor suckers living in the Caribbean islands had no place to run to.

There is no state income tax for individuals in Florida (Corporations DO have to pay a state income tax though). This was a big change for me, after living in the tax-happy "People's Republic of New Jersey" for many years.

[Tiebreaker]

>>> Care to tell which are the other 3 countries?

Memory fails me I'm afraid - but I remember being quite shocked when I read it - at least one of the other countries was somewhere like Libya or North Korea!

The IRS is keeping pretty dodgy company!

Optirex

Currently considering a few different options - but at the moment, I'm leaning towards Malta

English speaking
Good weather
low crime
low cost of living
no residency restrictions - ie, you are not obliged to spend a minimum period of time there each year
Convenient location in Europe
Income tax on foreign earning is capped at the equivalent of around US$5000 per year

[oddsod]

Those poor suckers living in the Caribbean islands had no place to run to

That's why the better option is to not relocate there but to continue to live in the country you want while having your earnings going elsewhere.

"Don't worry about the small details!"

Don't worry about the small details, you will be assimilated, resistance is futile, and that's all you need to know. It's a shame the poor level of literacy in the UK (yes!), the low level of interest people have in the issues that are going to affect them drastically (see the election turnout), and the low level of average intelligence (how else do you account for the Sun, Mirror and Daily Sport having such large subscriptions ;)?) mean that the general population won't realise what's happened until it's too late. Feel free to sticky me if you are offended :)

how do you do it with large sums of money, in a way that you can easily get access to and spend the money?

The tricky part of earning money abroad/in a tax haven is that you don't have access to it. The earnings, however, are tax free pretty much whichever country you are from (as they are not your earnings but the earnings of a limited liability company). The problem is withdrawing those funds in any usable way. Spending it on creditcards is evasion, withdrawing it in cash is a "drawing"/"earning" and you are liable for tax on the money withdrawn. You can use it to pay your kids' school fees, your golf club membership etc. But, in the UK, those payments would be called "benefits in kind" and you are liable for tax on that.

However, don't give up. There are a lot of very good ways you can withdraw that cash without breaking any laws (particularly evasion and money laundering). You just need to talk to the right tax experts. Avoid the run of the mill accountant (also known as the common garden accountant) and get a clued up specialist in this niche. Once you find him don't forget to pay him well, he'll be worth it.
No stickies on this issue, please

I'm leaning towards Malta

When making a choice you may want to also check something that was touched upon earlier - agreements for information sharing across borders.

For some of you a better option may even be to find a location with a "no double taxation" agreement with your country - like the Isle of Man (?). An int'l company there pays a flat rate of tax (20%, I think) and there are no other taxes due on that in either the Isle of Man or the UK ;)

[Tiebreaker]

>>> When making a choice you may want to also check something that was touched upon earlier - agreements for information sharing across borders.

Why should I care about information sharing across borders? I'm not doing anything illegal, or trying to hide anything.

Becoming a non resident is a perfectly legal tax avoidance measure - not illegal tax evasion.

[oddsod]

Becoming a non resident is a perfectly legal tax avoidance measure

And, as you may notice from my previous post, my advice is to stay within the law.

Privacy is a separate issue from tax planning but sometimes it's essential to a well-thought out tax plan that's prepared for a wide rnage of eventualities.

[bts111]

I like your style oddsod :)

[renee]

I plan to give up my US citizenship and spend 6 monts in US on "vacation". and the other 6 months in the bahamas during non-hurricane season, and the rest in other exotic places. I will be able to do this using the savings I get from:

NO ... Personal income taxes
NO ... Corporate income taxes
NO ... Capital gains taxes
NO ... Withholding taxes
NO ... Estate taxes
NO ... Gift or inheritance taxes
NO ... Sales taxes
NO ... Employment taxes
NO ... Death duties, and
NO ... Probate fees.

so if I'm not a US citizen, should be able to spend the money wherever I want to.

[renee]

One thing that worries me. I haven't heard from any webmasters from the carribean. Are there any webmasters from the carribean? Is this an indication of the quality of technology available from there?

[walkman]

smart, huh?
What makes you think you'll get a visa?
[uscis.gov...]
(E) "Former citizens who renounced citizenship to avoid taxation.-Any alien who is a former citizen of the United States who officially renounces United States citizenship and who is determined by the Attorney General to have renounced United States citizenship for the purpose of avoiding taxation by the United States is excludable. "18/

"I plan to give up my US citizenship and spend 6 monts in US on "vacation"."

[7_Driver]

Oddsod - I've looked into the Isle of Man as a possible base. It's a very attractive idea taxwise. And it's a really nice place (great roads - and no speed limits - HOORAY!).

They're planning a 0% rate of corporation tax next year too.

Only thing is, you do need to live there. If you have a company there (or in any other tax-haven) - which you control from the UK, then the UK government will tax that company.

Of course you could appoint IOM resident directors who only APPEAR to run the company - but then you're getting into tax evasion, and a lengthy jail sentence if caught.

I like this idea of not paying any income tax though. How do you manage that?

[skippy]

Chucking your US citizenship is not so easy.

[harpers.org ]

You also might want to check out how much hassle you would have traveling on a passport other then the US. Visas ect can be a big pain.

[shoreline]

And if Google should cancel your account for whatever reason, I'm guessing you have another source of income?

There are tons of things you can do right here in the states that allow you to write off your taxes, such as not having to pay any state taxes 'provided your state requires it', thousands off your vehicle and so much more!

Simply Google around.

In any case, take a month and think about it. Do not do anything right now, just sit on it for 30 days and if you feel the same, then more power to you!

[renee]

skippy, walkman

thanks for the illuminating articles. it's certainly a difficult decision. are the ones doing it now (tax haven maybe not citizenship renouncing) shy about telling or are they simply(maybe rightfully) scared of the IRS?

[oddsod]

bts111, thanks :). Essentially no government likes to be "done out of" tax receipts. It's particularly galling when it happens right in front of your eyes via loopholes/tax havens/work-arounds. It winds them up. Tax authorities view tax havens like they view loopholes... as things that needs to be fixed. Many low tax areas offshore/tax havens have had enormous pressure bearing down on them for many years to disclose information. More recently many of them capitulated when the argument turned to their irresponsibility for "encouraging the financing of terrorism". So now some of them are very cooperative with tax authorities in the UK, US and elsewhere. Too cooperative. Arrghh.

Sharing of information is always a risk. If I disclose here too much about the more profitable parts of my sites then the chances are that those profits will be diminished by competition I've created purely as a result of my indiscretion. The same thing applies to tax. If a tax authority finds that a certain route is working well for a lot of people - and that they can collect several billion more in tax receipts if they can "plug that hole"... that's not good news. I have one or two very efficient ways of withdrawing money from off-shore companies but I won't disclose them here. And I won't flaunt them in front of my tax authority. It's all legal but you should really keep as much info as you legally can away from Gordon Brown (our UK Tax Minister). It's er, Prudence ;).

I like this idea of not paying any income tax though. How do you manage that?

Hmm, I do pay some tax. But - sorry if this sound facetious - if you don't take it as income you don't pay income tax :).

[walkman]

renee,
doesn't matter what you do it for, or the reason you tell them. I think, if you're worth more than $500-$600K, they assume that you're dodging taxes, automatically.

[64.233.179.104...]

I think this is a "good" idea if you're worth tens of millions. Even then, you might think twice because you still have a lot of money, and can do other legal tax tricks.

[charlier]

Another place to consider is Ireland. They have a 15% corprate tax rate for offshore companies. So you can accumulate and spend what you want with only 15% tax as long as the company spends it. If you take the money out as salary it's a tax deduction for your Irish company (no 15% tax) but Americans would have to pay income tax on it.

So move to Ireland and sail the company yacht to the US. :-)

[trader]

Why would anyone want to risk bodily harm and be afraid to go out at night (except in tourist spots) by living in such a crime infested slum-like place as I believe The Bahamas is from what I read? Is that worth more than avoiding taxation?

[state.gov...]

If you insist on a tax haven why not move to a place like The Isle of Man and several other nations. The weather may not be so good but at least it's not dangerous and non-3rd world like with more peaceful educated people and good economy populations and non-slum conditions.

P.S. Anyone know a place similar to Isle of Man but with good sunny weather?

[StephenBauer]

Another concern would be institution choice and longevity.

Lets say you hookup with an off shore bank. A coup happens there a few years later after you have quite a bit of money in your account. The new "government" decides to sieze all financial institutions or just the assets of certain individuals (i.e. non-native born citizens) or something along those lines. I can see this happening in some small third-world tax havens.

Security (with some tax) does have its merits.

[oddsod]

nyone know a place similar to Isle of Man but with good sunny weather?

Malta? [legal-malta.com]

Also, there may be ways you can stay in the US/UK and avail all the benefits of being offshore. Yes, it's called diplomatic status. Sure, you're unlikely to get appointed to the court of St James but, if you want to research it, you may be able to convince a tinpot dictator that you'll serve as his representative in the US. He already has one? No problemo, you'll represent him at the UN/WHO/UNESCO/WTO... whatever and live in the US ;). Just a thought :)

The new "government" decides to sieze all financial institutions or just the assets of certain individuals

That already happens in places like the UK - it's just more cleverly done. Brown raised over £5 billion on the pension fund raid alone.

[OptiRex]

Heck, go away for a few hours and it's got into a very lively conversation:-)

Another place to consider is Ireland.

Unfortunately it's just had the dubious listing as the second most expensive country in the world to live after Norway...or was it Sweden?

It's er, Prudence ;)

Yeah oddsod...any Americans get that one?

Anyone know a place similar to Isle of Man but with good sunny weather?

I've been seriously considering Cape Verde Isles. Looks excellent, very stable, great weather, direct flights to the UK if required, plus property is not that expensive as yet.

They're touted as the next Canaries but with a bit more class:-)

[fearlessrick]

URUGUAY. It sits between Argentina and Brazil, or either of those countries, would be fine with me. Spanish, Portugese or similar combination of the two is realitively easy to learn (many of us took Spanish in HS in the US).

My plan is to leave the US, but not give up citizenship, though this is a distant goal, not an immediate one. South America in general is very appealing for a variety of reasons, not the least of them being the climate. Dollar exchange rates are good, and will be increasingly favorable to South American countries. The US has it's hands full with the northern part of the world, so, SA gets a break, for now.

Then there's BRIC - the aliance between Brazil, Russia, India and China. You can google it, but there's not a lot of info available. In fact, most, say 95% of Americans don't even know it exists.

The US will become more isolated unless we change our policies, but I don't believe that's possible without major bottom-up revolution, and that almost certainly will not happen, so we bite the bullet and hang in here.

One thing all US webmasters should look at, tax-wise, is a little-known item called Amortization of Intangible Assets. You can depreciate intangibles over a 15-year period. I have done it and continue to do it, without even so much as a raised eyebrow from the IRS. I have paid ZERO taxes since I began depreciating certain assets this way.

The US tax code provides so many legal loopholes for business (If you don't use Schedule C, you should and you do not need a Federal Tax ID to use that form, though a DBA or business license in your locality is a good idea), webmasters and online publishers are at a huge advantage over the average US working class stiff.

My general view of taxes is very negative. Everybody is taxed much more than they should be, alomost everywhere, IMO. Legal avoidance is key.

That's all I have on the topic for now...

[renee]

"why would anyone..."

Trader,

Here are a few quotes from the "Tax Have Reporter"

Business people from around the globe use the Bahamas as a tax haven. There are currently over $400 billion dollars on deposit in Bahamian Banks.

Former U.S. citizen Sir John Templeton (on right), knighted by Queen Elizabeth II of England, lives in Nassau. Templeton managed over $20,000,000,000 for clients worldwide. He gave up his U.S. citizenship years ago, probably to escape the USA's 55% estate tax on estates over $2.6 million dollars.

US treasury secretary Nicholas F. Brady (P.O.Box N-7776) has a home in Lyford Cay.
Remember it's his branch of the federal government that was responsible for writing the Treasury Regulations under IRC §951 thru §958 for CFCs back in 1962!

There are forty or fifty Bacardi's (the rum distillers) living in Nassau.

Billionaire fashion designer Peter Nygard

Mike Dingman, Sean Connery, the list goes on and on.

Incidentally, the Lyford Cay area is a millionaire's row here in Nassau.

_______
No wonder the rich get richer and us scared webmasters ...

[renee]

anybody from the Bahamas/Carribean? operating their websites/adsense from the Bahamas/Carribean?

[dollarshort]

The US will not legally let you give up your citizenship unless you have another country ready to accept you as a citizen. Example you cannot become a stateless person.

[oddsod]

renee, judging by the flood of replies from webmasters based in the Bahamas... maybe it's not such a good idea to move there just yet ;)

May I please repeat that I am not taking stickies on tax related/off shore related matters.