Dateline: Singapore
Yesterday I told you about how I’ve set up shop in Kuala Lumpur, adding a residential base of operations for when I need a solid, comfortable place to work without having to rely on the latest hotel.
An important side benefit to Kuala Lumpur: easy access to Singapore’s world-class financial system, which is just a 50-minute, $35 flight away. (Or $75 if you’re a miles addict as I am, or if you prefer to avoid low cost carriers like Air Asia.)
While I don’t believe Singapore is the panacea some in the offshore world want to claim it is, the reality is Singapore ticks a lot of boxes for a perpetual traveler or global entrepreneur.
Singapore corporations get plenty of special tax incentives to bring their actual tax rate down into the single digits. While that may not sound as good as paying zero tax on an island somewhere, there are times that paying a little tax can be good.
In addition to low personal income tax rates, doing business in Singapore – or my favorite, Hong Kong – also offers entrepreneurs and investors access to excellent financial infrastructure that the average tax haven just doesn’t allow.
For example, an internet business that needs a good merchant account would often be well-advised to set up shop in a jurisdiction known for more than just boilerplate offshore corporations with their name on a door somewhere.
However, one thing that I always find interesting being here in Singapore is just how well-run the place is.
If you were to only listen to the socialists and communists running bankrupt western countries, you’d think any country that allowed its companies and its citizens to get away with paying such low tax rates must be some sort of uncivilized backwater.
Singapore, with its lack of a minimum wage, is proof that high taxes don’t equal quality public services.
And that low taxes don’t necessarily mean third-world status. If you’re reading this, you already know that.
After all, the streets here in Singapore are so clean you could practically eat off of them. While I’m not particularly fond of a policy that fines people US$400 for drinking a bottle of water on public transit, things here are about as orderly as you can get.
And incomes and net worths are among the highest in the world. Nearly one in five Singaporeans is a millionaire, and Asian-style poverty is practically nonexistent.
Yesterday, I saw a news article from California – the worst place in the worst to do business, I’ve often said – showing a water main breaking on Sunset Boulevard in Los Angeles.
Basically, the entire street was flooded after a rupture caused a bunch of old equipment to break, stranding vehicles and causing road closures near UCLA. They even had to rescue some drivers from the mess.
If you’ve ever spent time in Southern California, you know that that part of town isn’t exactly a poor area. In fact, some pretty wealthy people live right around the corner.
So how is it that such a “first world” place such as California could suffer such a fate?
After all, I reported on a few streets flooding in Cambodia – my favorite frontier market – so how is it a place that is almost the polar opposite of Cambodia in terms of government intrusion could suffer the same fate?
It did remind me, however, of a post I recently saw on Facebook that I thought I’d share. If you haven’t discovered the “boom markets” of the east that we talk about here, you just might think The Land of the Free is the hottest ticket going.
Here’s “some perspective” from a US person who moved to Europe and is assuaging his fellow patriots back home about how wonderful things are.
I have been stationed in the richest non-U.S. place on Earth (Europe) for a few years now, and what’s striking is that even here, it’s all about doing without.
While the United States isn’t exactly poor, it being the richest nation on earth is a myth designed to keep US persons on the tax plantation. By multiple accounts, the US is the world’s eleventh wealthiest nation, behind three quasi-tax havens (Switzerland, Singapore, and Hong Kong), two micro states (Liechtenstein and San Marino), and a few eeeeevil Muslim countries (Qatar, Saudi Arabia, the United Arab Emirates, and even the constitution-free zone of Brunei… somehow).
Yes, my experience in much of Europe is about “doing without”, at least for the average middle class person. Service standards aren’t as high as they are in The Land of the Free. No one is going to refill your tap water every two minutes and ask (again) if your pasta if “to your liking”. However, Europe is – in general – more on the decline than the US.
Nothing proved.
There is no such thing as Central Air… people just suffer through the heat, and freeze in the Winter with these crappy little radiator-heaters (all the government allows to be affordable).
In some European city centers, governments do regulate when the heat goes on and goes off. People mark their calendars in anticipation of some bureaucrat’s decision.
But, again, Spain isn’t among the world’s richest countries, and in the countries that are on par with the US, air conditioning is plentiful. In my home in Malaysia, air conditioning is cheap and readily available. Heat is not required, just as central air is rarely required in many parts of Europe.
Gasoline is $5-7 per gallon (government taxes the living hell out of fuel).
See: California.
There is a 20% sales tax on everything (government takes around 65% of your income).
This is a perfect case for what we talk about here at Nomad Capitalist. In Malaysia, for instance, many luxury goods are quite expensive. In just one example, a Burberry trench coat can cost as much as 70% more than its counterpart in London or Los Angeles.
In this case, it’s easy to fly to Singapore or Hong Kong or wherever goods happen to be cheaper, stock up, and fly back. “Go where you’re treated best”. The place that doesn’t tax your income may make up for it by imposing heavy taxes on other goods. Taxes you don’t have to pay if you live by the rules of Flag Theory.
People don’t get 15-year mortgages…they get 50-year mortgages (government oppressively taxes all real estate transactions).
Again, a perfect case for diversifying. When I can rent a brand new luxury condo in Kuala Lumpur for less than $2,000 a month – or buy it for $700,000 – the decision is easy. Getting a 2.5% gross yield on my money isn’t my idea of a good time, especially on a piece of real estate that I have some sort of emotional interest in.
Instead, I’ll be spending part of next month in Phnom Penh and Sihanoukville, Cambodia buying cheap real estate with better appreciation potential and more favorable terms. If you really want to get aggressive, there are countries with no property taxes at all.
The idea that you have to buy a home or get a mortgage is part of the slave culture gripping much of the west, where people have less and less disposable income yet still believe that, merely by living in a “rich country”, they must own property.
It takes six hours to do half a load of laundry (government forces people to use environmentally-friendly machines).
I suppose if you insisted on defending your country at all costs, you’d come up with something like this. Why let people experience better opportunities when they could imagine doing laundry in their bath tub?
Showers are the size of phone booths, closets do not exist, and utility bills are extreme.
More generalizations.
You can’t wash your own car, throw away recyclables, or even name your own child without government approval…seriously.
Again, see: California.
It costs thousands of dollars to get a license, own a car, and pay for the mandatory $1 million of auto insurance you are forced to carry…and there are speed cameras everywhere, and there is no gray area (my boss couldn’t even get out of a ticket from when he sped his wife to the hospital to give birth).
The United States is on record for operating the world’s most aggressive police state, short of North Korea. However, incarceration rates are actually far higher in The Land of the Free.
If you enjoy cops in stealth cars following you around not to help, but to extort money from you, there is no better place than the United States.
The only difference between the nanny state socialist control freaks of Europe and the ruthless Third World tyrants they condemn, is that here, they impoverish and enslave people through the charade of VOTING, as opposed to at gun point…to maintain the appearance of legitimacy.
Think about that while you’re sitting in the lap of luxury…listening to Democrats talk about how well socialism works.”
Indeed, the biggest charade in the western world is that people arrogantly believe it can’t be better anywhere else.
That there’s no reason to invest in another country.
To visit anywhere else.
To learn another language or expose their children to the up-and-coming business culture of a place like Asia.
These are the mental blocks that keep people down. If you believe that the best days of the United States and the west are ahead, you are free to think that and you certainly don’t need me.
But it is interesting to illustrate the silliness that comes out of those who will “defend America” at any cost, even making gross exaggerations and outright lies, all to keep people from leaving.
If you’ve made it this far, chances are you’re ready to leave. You just need a reason.
As if real earnings dwindling by more than half and the average family having a net worth of practically zero weren’t enough.
