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Escape to Sark: The Secret European Tax-Free Island 

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Is fear stopping you from achieving your dream of finding the best place in the world to live, do business and invest?

Well, if you’re considering Europe as a potential destination, chances are that fear of the EU’s multitude of tax inspectors could be causing you to hesitate.

Even though the EU is the ideal destination to achieve a lifestyle that makes sense in terms of culture and location, many of your wealthy counterparts are opting to move instead to tax-free nations in the Caribbean, the Middle East and even the Pacific Ocean.

They’re motivated in part by concerns that while Europe offers one of the best lifestyles in the world, it can come at a hefty price, courtesy of the taxman. 

‘Not so – it doesn’t have to be that way!’ says the Nomad Capitalist research team whose boots-on-the-ground, real-world experience puts them in a prime position to advise on how best to access that European lifestyle you’ve always dreamed of.

Contrary to popular opinion, the NC team maintains it’s entirely possible to live in Europe full-time and pay low taxes. 

For in the very centre of the Channel Islands lies the tiny island of Sark. There are no cars on Sark, no airport and none of the noise and stress of the modern world – arriving here is like stepping back in time. 

Escape to Sark

The smallest of the four main Channel Islands, which also include Jersey, Guernsey and Alderney, Sark is located around 80 miles off the south coast of England and only 24 miles from the north coast of France.

For those who love the sea, Sark has over 40 miles of stunningly beautiful coastline to discover. A boat trip around the island reveals cliffs and numerous bays. Beneath the waves is some of the best scuba diving in the waters off Britain. 

Over the centuries, the stunning natural beauty of the Channel Islands has inspired countless artists, including Wiliam Turner and Pierre-Auguste Renoir. It remains an ideal retreat for all kinds of creative people. 

Its political status somewhat echoes its isolated geography – it’s credited with being Europe’s smallest independent feudal state. Though it’s independent and has its own democratic government, it also boasts the last feudal constitution in the Western world. 

Under a unique – some would say bizarre – status, the Lord of Sark is the head of its government and still ‘holds the island’ for the English monarch. The British colonised Sark in 1565 and repelled subsequent invasion attempts by France along with countless pirate raids. It finally succumbed to German occupation during WWII but the short-lived Nazi occupation ended with the island’s ultimate liberation by the Allies.

Today, the island is a mix of English, Norman French and Channel Island cultures and comes with its own language, known as Sarkese or Sark-French, which only a few hundred people speak. The official currency is the Guernsey pound, which is tied to the British pound sterling and both are accepted locally. The Euro is also accepted in many instances.

The pace of life is gentle and although Sark is just three miles long by a mile and a half wide, the island offers all kinds of fascinating places to explore and endless adventures to enjoy. It’s also the perfect place to simply relax and admire the view.

During the day, you may want to take in views of stunning landscapes from La Coupée, a rustic path that connects both sides of the island. At night, however, Sark comes into its own, with famous magically dark skies due to the absence of cars, neon lights and street lamps.

It’s officially one of the best places in the world to see the stars. The lack of light pollution means the view is simply stunning, and it’s easy to see why Sark has been designated the world’s first dark sky island.

Live on Sark and Pay Low Taxes

Although it is one of the lesser-known tax-free jurisdictions, Sark has a number of advantages that make it an attractive location. 

Aside from the tranquillity and old-world charm, one of the island’s most compelling features is that Sark does not levy any income tax, inheritance tax, capital gains tax or value added tax (VAT) on its residents. Neither does the island have corporate tax.

It does, however, levy a property tax and personal tax on each resident who has a property available to them for 90 nights a year.

This is a kind of property tax which is calculated based on the size of the resident’s property, not its value. This property tax usually ranges from GBP£2000 to GBP£7000 per year with most Sark residents paying about GBP£3,500 per year. According to reports, only four individuals on the island are currently paying the maximum. If you’re interested in planning a tax-free future, get in touch here

Setting up a Company on Sark

In terms of company incorporation, even though there is no company registration office on Sark, foreign companies may have permanent establishment on the island. Companies have no tax obligations there, and many Sark residents choose to operate their businesses through United States limited liability companies or British Virgin Island companies. 

There is no employment law on Sark. The relationship between workers and employers is only regulated by their contracts, making it the ideal place to employ staff. 

Becoming a Resident of Sark Island

If you have a passport from the EU, EEA, Switzerland, the United Kingdom or Ireland, it’s very easy to establish residency on Sark. All you have to do is rent or buy a house on the island. 

However, if you don’t hold one of these passports, you still have two options to try to obtain a residence permit to relocate there. The first is to invest and take a controlling interest in a local company. Normally, this entails investing GBP£200,000 and creating two local jobs, not counting your own position. The other route is investing GBP£1 million in the regional economy, which includes buying bonds and stocks.

The Lord of Sark has to approve your application for residence through the Chief Pleas, Sark’s democratically elected parliament. 

Sark doesn’t have any physical presence requirement to be considered a resident. However, one of our contacts on the islands recommends spending at least 90 days in Sark voluntarily each year. It has been suggested that one day, the authorities will require residents to spend some time on the island. 

However, for now, there is no requirement to spend time there to maintain tax residency. The only requirement to maintain both tax residency and residency is having a home available. The home can be rented or purchased. If you cease to have a home available on the island, you cease to be a resident and a tax resident of Sark.

There is no facility for a person to acquire Sark citizenship, but after five years of residence there, you can obtain a Channel Islands passport, a variant of the UK passport, which allows visa-free access to the USA and Canada. 

In order to get the passport, an applicant must spend at least 183 days per year within the Common Travel Area (CTA). This arrangement between the United Kingdom and Ireland bestows a variety of rights on citizens of those countries and includes all of the Channel Islands.

This means, for example, that somebody can be a tax resident of Sark, spend 119 days in London as a tourist, 35 days in Ireland as a tourist and 30 days on Sark and still be eligible for British Channel Island citizenship. 

Who Will Sark Work For?

For those who would want to choose Sark as a permanent base, the appeal lies in its remoteness and the possibilities of a quiet, peaceful life.

Having said that, life here is not all plain sailing and Sark’s remote charm can be a bit of a double-edged sword. The lack of an airport means primary access is by boat which could cause critical delays to a busy schedule.

Similarly, there are no hospitals – there is a medical centre – so anyone with a medical condition may want to research a move here carefully. This is a place that perhaps more adventurous, less dependent people will like.

Still, for a small, tranquil island that is geographically close to both mainland Europe and the United Kingdom, Sark is undoubtedly an under-explored, tax-free destination. 

For those with children, there are schools. Like the rest of the Channel Islands, Sark follows the UK’s free schooling policy up to secondary level. With Sark’s economy heavily reliant on tourism and financial services, there could be scope for employment there once established. 

As its popularity increases, Sark may yet develop new facilities. The island is beginning to gain recognition and more people are talking about its undiscovered potential, just like ‘international man’ Doug Casey, who shares his thoughts here

Still, as we always say at Nomad Capitalist, don’t just take someone else’s word for it – do your own research. Diversification and stability of the local economy are important factors to take into account when considering a move to an isolated location like Sark.

Another group of people who might want to consider Sark includes anyone who wants a tax-free residence permit with no physical presence requirement. For them, Sark is a low-tax destination in Europe, where they could establish a base they only have to visit occasionally. There are clear benefits for wealthy people from Europe who want to stay close to home instead of living in the Caribbean or the United Arab Emirates.

Aside from some tax benefits, non-EU persons have scope to work towards a UK Channel Islands Passport. Attaining this passport offers visa-free travel in the EU and the United Kingdom. 

Plan to Plant Your Next Flag

Though it’s neither part of the United Kingdom nor the European Union, Sark is somewhat unique. For those who dislike big government and want to live far from government interference but still enjoy the comforts of modern life, the island of Sark is a shining beacon. It could be perfect for libertarians who are fed up with the fiscal overreach of traditional, developed economies. 

It’s a place where you can escape the big city, saddle up your two-wheeled transport and explore. It’s still close to global hubs like London and Paris, so if you want to dip back into the hustle and bustle of urban life, you have that option close to hand. 

In a sense, it’s this flexibility that gives Sark its edge. Not many places this close to Europe have such a laissez-faire attitude to residence and physical presence so it’s an ideal option for those looking for a back-up residence with a difference.

Whether used immediately or held until required, tax residence on Sark brings a serious set of financial and lifestyle benefits. It might not be everyone’s cup of tea or strong French coffee, but who doesn’t want to leave the rat race behind and escape to a Euro-centric island that offers a slower, more relaxed pace of life, at least some of the year?

What isn’t in question is the year-round tax benefit of establishing a base there, with the freedom to come and go as you please and enjoy excellent travel opportunities if you so desire. It’s what we call ‘going where you are treated best’.

This is all about choosing your own tax rate and legally reducing your payments while living your desired lifestyle: maximum freedom with minimum tax.

You will need to plan this carefully, however. That’s where Nomad Capitalist comes in. We help seven- and eight-figure entrepreneurs and investors create a bespoke strategy using our uniquely successful methods. We’ll help you keep more of your own money, create new wealth faster and be protected from whatever happens in just three steps. Become a client today

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