Dateline: Merida, Mexico
I’ve been working on a new concept.
This development comes in response to the needs of many of the the folks I help each month. One of the key factors to successful lifestyle design is to not only know the places you would like to visit but also to answer these questions:
How much time do you want to spend in an each place you want to go as nomad?
How much time does the each nomad base deserve?
How much time each short-term place you visit will have you settled in, feeling comfortable and productive?
We’ve discussed before the different ways of living as a Nomad, from the extreme perpetual traveler to those who prefer to simply settle down in one location as an expat. What I have discovered as I continue to work with more and more individuals at the seven and eight-figure levels is that the need for balance between these two extremes leads many of these successful entrepreneurs and investors to the middle option: the Base Cities Strategy.
In a nutshell, the Base Cities Strategy involves having homes in different cities — bases — that are usually relatively far apart so that you can travel to nearby locations from each one. From there, you have to consider how much time each base deserves and whether or not you’ll have any short-term flings with other countries along the way.
Going beyond simple lifestyle design, however, a true Nomad Capitalist will also want to know how to use this type of strategy to their full benefit to live around the world completely tax free.
Enter the Trifecta Concept.
The Trifecta Concept
The Trifecta Strategy is for those folks with the money to rent or buy quality properties in different locations around the world — potentially three, hence the Trifecta — in order to establish bases in which they can live for a certain amount of time without becoming tax resident in any of them.
For me, that might be Kuala Lumpur, Malaysia in January, February and March, followed by Tbilisi, Georgia in the spring and early summer. From there, perhaps I’ll spend the the fall and winter season somewhere like Bogota, Colombia to enjoy Christmas time in a place where they know how to celebrate such an occasion. This will allow me to be in Asia, Europe, and the Americas over the course of a year.
This will allow me to be in Asia, Europe, and the Americas over the course of a year.
Not only that, if you choose to use this Trifecta Strategy, you will have spent a total of nine months in your three base locations, leaving three months throughout the course of the year that you can then split up between each base to enjoy shorter trips for leisure or business, or ”bleisure”, as it has started to be called by many location independent lifestyle community.
Ideally, you can spend one month in between each base to get to your new location with stops in other countries that you are interested in exploring.
For instance, I may want to spend a month in Río. I could easily do that from a base in Bogota, and I could obviously do so with much more ease than if I were traveling all the way from Europe or Asia. Conversely, when I’m in Malaysia, I could take advantage of my Asian base to plan a two week stint in Cambodia during my in-between month and dedicate time to my investments there. Or, I could hop on over to Singapore or Hong Kong to handle banking and gold storage.
The idea is to have regional bases where you can create the exact conditions you will need to get all the things that you want.
The higher and higher level people that I help out, the more I realize that they want certain amenities. Following the Trifecta Strategy, you can choose countries that offer those exact amenities.
For example, I landed here in Bogota, Colombia and Uber popped up immediately making it easy to get around within minutes of being in the country. There are tons of great restaurants and everything is easy to deal with. More importantly, every time I have come here I’ve had that experience. Kuala Lumpur is basically the same deal and Tbilisi is increasingly becoming so.
With your lifestyle needs met three-quarters of the year, that extra month in between each of your bases will give you an opportunity to see more emerging countries along the way that may not offer comfort but do offer great investment opportunities. With three bases that meet all your lifestyle needs, you’ll spend at least nine months in places where you know that you like the infrastructure, development, people, etc., and then you can go and experiment for the other 25% of the year.
For instance, if you’re in Tbilisi, one of the big places that’s on a lot of people’s radar right now is Kazakhstan and the other “stan” countries like Tajikistan. I don’t want to spend a full month — or certainly more than that — in any of the “stan” countries, but I do want to see what’s going on there. So, the next time I’m in Tbilisi, I’m going to budget a couple weeks to go over and explore that region and make some contacts. I may not want to set up a base there, but I do think it’s a region that is coming up in the world that deserve exploration.
Taking that month as an experimental period after three months in a place you can call home will give you a good balance between comfort and exploration. Additionally, by spending roughly 90 days in each of your base countries, you will not be tax resident in any of them.
Important Note: One area where you might have tax issues is if you spend four months or more is in the United States. You would certainly be on the border (if they would even let you in for that long of a time). You’ll want to go to places where they have residence permits or where they make immigration easier.
You know: Go where you’re treated best.
Trifecta Country Candidates
Not every person will have the same Trifecta Strategy. Malaysia, Georgia and Colombia might work for me, but the individual needs of each person will dictate a different set of countries and perhaps even regions of the world to aim for as bases.
That said, let’s take a look at what makes a good candidate for a Trifecta base country.
Foreign Ownership Laws
If you are planning on buying a property in a potential base country, one of the first things to look for is a country that actually allows foreigners to own property there. While you can certainly rent a home in a country that disallows foreign ownership (unless, of course, that is restricted as well), most of the folks I help are looking to purchase a property for all the benefits of foreign real estate ownership beyond just using it for your base.
Some countries are completely open, while others will request that you jump through a few hoops, and still others bar foreign ownership completely. Here’s a quick list you can use as a reference:
Open To All – No Restrictions (except for areas of national interest):
Buildings Open to Anyone – Land Reserved to Nationals
Open To All – Some Restrictions:
- Bahamas: Register purchases with the Foreign Investments Board
- Belize: Obtain approval from the Ministry of Natural Resources
- Croatia: Obtain approval from the Ministry of Foreign Affairs. Approval is based on reciprocity: if Croatian nationals can purchase real estate in your country, you can buy property in Croatia.
- Cyprus: EU citizens can buy an apartment, villa, and more than one plot of land. Non-Europeans are restricted to properties on less than an acre of land. Both types of buyers must go through the Council of Ministers to transfer the deed to a non-Cypriot citizen.
- Ecuador: Must obtain permission for land within 30 miles of the coast or a border.
- Mexico: Cannot purchase real estate within 62 miles of an international border or 31 miles of the coast unless purchased through a Mexican land trust or corporation. Foreigners are also prohibited from owning ejido land, which is land distributed to indigenous communities.
- New Zealand: No restrictions unless you plan to purchase more than 12 acres.
- Panama: The only restrictions are on property within six miles of international borders and a small number of islands and waterfronts.
- Poland: Obtain an agreement from the Polish Ministry of the Interior. Foreigners can own up to one acre of urban real estate or 2.5 acres of rural land.
- Sri Lanka: Technically, all foreigners can own land in Sri Lanka, but they will have to pay a 100% transfer tax, effectively doubling the cost of any purchase.
- Thailand: Obtain permission from the Minister of the Interior. You cannot own land in a building where 49% of the other condos are owned by foreigners.
You may also consider setting up a Trifecta base in a country where you can obtain a residence permit through a real estate purchase or even for setting up a business. You will need to take many factors into consideration since some residency programs require that you become a tax resident and live in the country an established amount of time, interfering with your Trifecta Strategy.
Countries like the United Arab Emirates, St. Kitts and Nevis, the Bahamas, Seychelles, and Mauritius all offer residencies to those who purchase real estate in their country. However, I recently shared a list of my favorite countries where you can obtain second residency through a real estate purchase. As a quick reference, here are some of the best places offering residency in exchange for purchasing a property:
- Albania – $0
- Brazil – $160,000
- Colombia – $23,000
- Georgia – $35,000
- Latvia – $350,000
- Malaysia – $70,000
- Mexico – $175,000
- Montenegro – $0
- Serbia – $0
- Turkey – $0
Many other countries offer residency in exchange for setting up a business in the country. Again, you will need to make the decision to pursue a second residency in any country as part of a complete Plan, but here are some of the countries offering residency to entrepreneurs willing to set up shop inside their borders:
Spain is a great example of a country where you DON’T need or want to get a residence permit as part of your Trifecta Strategy. Why? Because even though you could get residence, you don’t need one to live in Spain for your desired three months, or to purchase land there. More importantly, if you were to get a second residency in Spain, you would be required to stay in the country for at least six months. This is, of course, the exact amount of time required to make you a tax resident in Spain.
There are many factors to take into account when deciding on a second residence, especially when you are going for the Trifecta. Physical presence requirements and tax compliance rules are two of the most important ones you’ll need to address before choosing a country as part of your Trifecta Strategy.
This is why I recommend professional residence planning to effectively lower your taxes. Nonetheless, here are a few good places to start your search for the perfect low-tax base:
- British Virgin Islands
- Cayman Islands
- Costa Rica
- Czech Republic
- Turks and Caicos Islands
In the end, you may not need to worry about residence permits or jumping through hoops to comply with tax laws. That’s the beauty of the Trifecta Strategy — since you will spend 90 days or less in each country, chances are that the immigration laws of each country will deem you nothing more than a tourist, even though you’ll grow to call your new base “home.”
But, all those considerations aside, this is the Trifecta. I am still refining the strategy, but I am constantly refining ways to live the Nomad lifestyle.
The idea is to not only go where you’re treated best but also to experience the best of each part of the world without sacrificing the essentials of your success. As I work with more individuals at the seven and eight-figure levels, I’ve realized that most folks who have arrived at that level of success don’t want to be on a bus, plane or train every two weeks. They want some more consistency in their life.
The Trifecta can deliver just that without sacrificing the chance to discover emerging world opportunities along the way, or the ability to be tax-free while enjoying the comforts of home and abundant living.