Have you ever wondered what a Perpetual Traveller is? Well, it is not simply a buzzword; there are more things to it than you can imagine!
Basically, the perpetual traveller, or PT, is a person who has learned the art of freeing himself from the weight of his government without losing his rights and advantages as a citizen of the world.
No country owns you. Instead, you are the one who chooses the countries you want to be in and under whose laws you want to live. So, for example, you could choose Malta as your tax residence, Switzerland as a place to have your business, Belize as the country for your second passport, Hong Kong to keep your money and Spain as a country to have fun.
The permanent traveller, in essence, does three key things. First, diversifies. Second, stays with the best of each place. Third, achieves maximum independence from the different countries.
The perpetual traveller: The world is a tax haven
Live in a country that offers you the tax advantages you seek and meets your cultural preferences.
New citizenship in an offshore tax haven can come with many opportunities. As a result, you can make the world your tax haven. Now let´s face it; no one wants to pay too much income tax. And as English teachers, we want to keep most of what we have earned.
Indeed, you have the right to live practically anywhere. There are two simple requirements for this to work. First of all, the country you choose for tax residency must have a territorial tax system. Second of all, you must not have any local income sources.
Make sense? The solution is simple. All you must do is meet the requirements of tax haven citizenship and build a solid connection to the country. Then, choose your offshore tax residency carefully. If you meet these two simple requirements, you have now escaped the global tax net.
Perpetual Traveller = Permanent Tourist = Practising Teacher
The perpetual traveller, the permanent tourist, and the practising teacher can decide to live as a tourist and enter countries always with their tourist status. No law prohibits you from having an online business as a PT (Practising Teacher).
Entering the countries you visit as a tourist limits your time in them. In some countries, you can stay only 30 days; others, like Mexico, allow you to spend up to 180 days. In other countries, a student visa is your answer if you want to stay for one year. Spain allows 1-year student visa holders up to 30 hours of legal teaching work a week.
If you live in Spain for less than six months (183 days) in a calendar year, you are a non-resident and only pay taxes on Spanish income. Taxes apply to your income at flat rates with no allowances or deductions.
Now of course, as a perpetual traveller, you can also decide to become a resident of one of the countries you live in.
Perpetual Traveller = Permanent Tourist = Practising Teacher: Paying taxes
Your obligation to pay taxes depends on several factors.
The first of these is nationality, a factor that only in the case of the US and Eritrea are decisive. These two are the only countries that tax the income earned by their citizens even if they live abroad.
Then, there is the staying factor. In many countries, the 183-day rule applies. In principle, if you spend less than 183 days in the country, the country will not consider you a tax resident, so you will avoid paying taxes in the country.
Furthermore, you should also consider other factors, such as housing, economic, social, and family ties when becoming a Perpetual Traveller.
As a resident of Mexico, Argentina, Colombia, or any non-European country, you can recover VAT on your purchases within the EU. The same applies if you shop outside Europe as an EU resident. You can be refunded for this tax as a foreigner in many cases.
Other advantages of the PT
Of course, being a PT not only has advantages from the taxation point of view, no, the thing goes further.
PTs rarely live in their home country, which makes them unique. They are usually people from the world who have left their comfort zone and are open to new experiences and information.
The Perpetual Traveller = Practising Teacher, is a person who thinks differently.
One of the biggest problems for most is that they try to get superior results by doing the same thing that everyone else does. This, of course, is complicated.
The average person goes to college and gets his degree, does an internship, and then hopes to be selected from hundreds of candidates.
The perpetual traveller turns things around and doesn’t play by the rules. After all, he wants to see the world, learn about other cultures, and learn a language or two in a non-conventional way. Furthermore, he wants to do it his way, and he wants to do it via travelling. He gets the proper teaching qualifications, chooses where to live, and starts his business as a Practising EFL teacher.
The Perpetual Traveller has the advantage of Geoarbitration.
Geoarbitration consists of taking advantage of the characteristics of the different areas/countries of the world. As a PT (Perpetual Traveller = Practising Teacher), you can teach online for companies based in more affluent countries. For example, you earn money in a stronger currency (like the Euro or the US dollar) and spend money on a weaker currency (like the Thai Bhat or Mexican Peso).
This is true not only in your business but also on a personal level. You can choose to earn your money in a hard currency or in a country where it pays well and live in another where living expenses are far below. For example, you could earn money in Spain and live in Paraguay. Or you could have your clients in the UK and live in Thailand.
The Perpetual Traveller = Practising Teacher finds more (business) opportunities.
Being better connected has many advantages, among which are more business opportunities. As soon as you stop living like everyone else, lots of new ideas will start coming in, and you will find things in other countries that will catch your attention, and you can try to adapt to the new with what you already know. In addition, you will meet new people and other practising teachers.
You can learn a lot of new things, especially languages.
And finally, as a perpetual traveller = practising teacher, you can acquire new skills and learn other cultures and languages. Even if you only move from the United Kingdom to Spain or from Mexico to Uruguay, you will enormously expand your personal and professional horizons.
How do I become a Perpetual Traveller?
If you have already convinced yourself of the benefits of becoming a Perpetual Traveller, the first step is to get deregistered as a tax resident. The steps to be unsubscribed in the country of which you are a national usually consist of the following:
- You leave the country where you are a national.
- You move to another country where you can quickly become a resident; this will be your bridge country. If you are from the EU or have facilities to get residency there, you can move to Cyprus or a European country.
- You register as a resident; for this, you will have to get a home (usually, a room in a shared apartment is enough). You will also need health insurance, and you must be able to prove you have a minimum income.
- Once you have registered in the bridge country, you will notify your country of origin of the change of residence so that you can be deregistered as a tax resident. You will also likely be asked for some documents to prove you have a new place of residence. They can often help you with this at your country’s consulate.
- Once you have settled the necessary steps in your country of origin, then you can leave your new home and unsubscribe directly to the bridge country. To do this, depending on the case, it is usually enough to let the visa or permit you have obtained expire or not renew. However, if not, you will have to go to the town hall or entity in charge of the cancellations for foreigners.
How do I become a Perpetual Traveller?: In case you aren’t a national
In case you are not a national of the country in which you reside (that is, if you live in a country as a foreigner), the steps are more straightforward:
- You leave the country of which you are not a national.
- You go to the town hall to inform them that you will leave the country and ask to be discharged as a resident. If asked, you should be able to tell them something; maybe it turns out that you are returning to your country or have a girlfriend or boyfriend in another country. You can also choose to let your visa or residence permit expire.
- Make a last call to the Treasury to ensure you have been unsubscribed. This will save you possible later problems.
In principle, the most important thing is to avoid 183 days of stay in any country. However, the rules can be much more complex depending on the country (the United Kingdom is known for its complex residence test).
The 13 steps theory
Here is the 13 steps theory to internationalise your life:
- Get a passport or citizenship in a country that does not tax you for it and gives you ease of movement without controlling yourself too much in return.
- Set tax residency in a country, preferably without an income tax.
- Set up your business in a jurisdiction where you do not pay taxes or are obligated to file accounts.
- Keep your assets in a safe place that protects your privacy, preferably with no estate taxes.
- Choose countries that allow you to enjoy life as you like.
- Set up a digital business (or convert the one you have to this medium). Consider security, data protection, and other key points when choosing a server, domain, and email service provider.
- Make the most of health tourism. If you have any health problems, then go where they can treat you better and at a better price.
- If you’re getting married, make the most of it. Get different passports and tax advantages.
- If you have children, then offer your children the most significant possible advantages (second passport).
- Know as many people as possible who speak the languages you need and have the knowledge or specialities you seek, preferably in a low-wage country.
- Consider alternative options such as homeschooling or world schooling and choose a country where your chosen option is legal or at least possible.
- Protect your privacy. And choose options (and tools) that allow you to live a life free of censorship.
- Consider insurance options. Many types of insurance have different benefits and costs depending on the country you live in.
The best places to live and work.
Knowing the game board thoroughly is crucial to living as a Practising Teacher = Perpetual Traveller. Although it is essential to have assets well protected, quality of life is always the deciding factor.
As a Perpetual Traveller = Practising Teacher, you can try all the places you want to live in. Once you have found where you want to settle, you can do it as a PT, taking advantage of the characteristics of other places you have known during your trip.
Only some of us Practising Teachers are made to travel permanently; most will need a break at some point. As a Perpetual Traveller, you know you can leave the country anytime. This would be, for me, perhaps the true definition of a PT: “People who can leave any country without major problems from one day to the next”. After all, mobility and flexibility are the great strengths of the Perpetual Traveller. When you are mobile and able to adapt, then you are antifragile; you don’t break down in the face of pressure, but benefit from it.
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