Being a citizen of the world is possible. The Flag Theory explains how you can benefit from locating aspects of your life in different countries. Next, we are going to delve into this theory.
What about this theory?
The Flag Theory idea is that each essential aspect of your life is in a different country. So, you can take advantage of the laws of each of these countries to reduce your tax payment. In addition, you can take advantage of your cultural dynamics to enrich your life.
It is about having as many flags as necessary. Schultz, who designed the first flags, established three main ones. Then other theorists increase the flags numbers. You can find theories that talk about 12 or 13.
The premise is that you can establish the relevant aspects of your life and then adapt the necessary flags. Of course, you must delve into the flag’s theory, so you can understand it and take full advantage of it.
How many flags exist?
When you add a flag to this system, you add a country to your list. When choosing these countries, you should think about what elements you can take advantage of in their laws or culture. If you find a country that has low rental prices and you like its culture, you can live there. But you can choose another place that has good profitability to invest in.
Nationality
Nationality is not linked only to the place where you are born. You can obtain a second nationality by meeting a few requirements, which vary from country to country. You must choose the aspects you want to strengthen when receiving a second nationality. You can get special visas or other facilities by having a new passport.
Be careful with the requirements that some countries have. For example, if you have a US nationality, you must pay certain taxes for life, even if you no longer live there. Your nationality is one of the main aspects of the Flag Theory.
Tax residence
You can choose a country depending on where you generate your income. If you receive most of your money within that country, you’ll want to find one where you don’t pay too much tax on income earned there.
If your case is the opposite, you should choose a country that does not charge taxes on the income you get abroad. You can choose the best option according to your current situation or the one you want.
A place for your business
When you choose the country for your business, take into consideration some aspects such as:
- The advantages that it can bring to your business for its growth. Linking yourself with tax havens is not well seen by many clients.
- Choose countries that are not related to high-profile scandals. For example, Panama and Belize are ruled out. Other countries offer benefits, such as Ireland or Hungary.
You must choose a country that brings you benefits not only in the short term but also allows you to extend them in the long term. Think very carefully about the strategy you are going to use according to the business you have.
Your heritage
Another aspect of the Flag Theory is your heritage. Many countries have policies that allow them to touch your savings in certain situations. The best thing is that you place your assets in a country where it is fully protected.
Look for a stable economy that offers you insurance for your savings. So, you don’t get surprises in the future. Then you can count on some money at the end of your working days.
Your home
Your home and your tax residence may be in different countries. You may want to live traveling the world. Keep in mind the 183-day rule that applies to many countries.
Choose places where you like to spend time, countries that are culturally interesting for you, or that contribute to you in some way. There are countries in which everything is expensive, and they are not a worthwhile investment.
Health insurance
Each country has its health system, but there are also insurers worldwide. Pay your subscription with one of these companies to be protected no matter where you travel.
Investigate well the insurance validity, and what diseases and situations are included in the plan you choose. Spend significant time questioning which is the best option for your situation.
Online presence
In this aspect, there are also each country’s laws. Choose domains from countries that strengthen your digital strategies. Also, to protect your information from competition and unscrupulous people.
What are its benefits?
You have many benefits with this system, although it is not that simple to implement. You must study and analyze each country’s situation and your life. You need to keep in mind future aspects such as economic changes worldwide and your personal goals. Apply the flag theory and get benefits like:
- Reduction in the payment of taxes.
- The best conditions to achieve your goals.
- Increasing the value of your assets and protecting them.
- Stability in your business by protecting it from legislative changes with the current government.
- Expand your knowledge of legislation and international culture.
- Focus your efforts on the parts of your life that you prioritize.
- Be more aware of your finances and how to improve them.
- Travel the world or reside in a country of your interest.
- Stop being accountable to a country in all aspects of your life. It gives you the freedom to make more choices and more control over certain aspects of your life.
If you decide to implement the flag theory, remember to analyze each situation very well in your life. Get advice on legal and financial aspects from professionals who know about this topic. You may be surprised by all the benefits you will discover and the strange laws you can find. Discover countries you had never heard of thanks to the laws that you can take advantage of.
