If you didn’t have a reason to become a perpetual traveler, you should have one now.
It shouldn’t shock anyone reading that sovereign debt is a huge problem for governments around the world. This month alone, the guy who oversees Franklin Templeton’s bond markets advised investors to get out of “safe” sovereign debt. Japan is being scrutinized hard for its own debt bubble. Developed and developing markets are being called on the carpet.
Political leaders, eager to appeal to the widest swath of potential “gimme” voters, have made their position clear: we all must endure “shared sacrifice”.
But we both know who will bear the brunt of that shared sacrifice. It’s business owners, innovators, and, most importantly, the young. If you’re a young entrepreneur in a bankrupt country looking to make your mark, the potential liabilities have never been higher.
Governments love turning up the heat on you slowly, just like the frog in a pot of boiling water. They call it “incremental” change. It helps them accomplish their ultimate goals with a little patience and the short-term memory of their citizens.
Today, they’re raising your tax rate a few points, or reducing which business expenses you can deduct on your taxes, or adding a few forms your business has to complete every year.
But over time, things can only get much worse. The government has already told you they’ve spent your money. The youth generation will be the most indebted in the modern age. As economies dwindle as a result, they will also be the last hired and the first fired. Benefits and work schedules will decrease. Capital will be harder to come by for start-ups. But it doesn’t have to be this way.
If you’re young and talented and living in a bankrupt western country, now is your time to make your move. Taxes, regulations, and loss of freedoms will only get worse in countries like the United States. For U.S. citizens in particular, citizenship-based taxation will take a big bite out of your future successes if you don’t act. There are plenty of countries in almost every corner of the globe that will open talented people with open arms, lower taxes, and less nonsense.
If you run or aspire to run an internet or other mobile business, this is especially true. It’s also true if you own a business that is high-growth or will experience a significant liquidity event in the future, both of which have the potential to make you amazingly rich. Why be a slave to a country that believes you need to “pay your fair share” as retribution for working hard?
Singapore, for instance, is one of the most pro-business places on earth, and offers most entrepreneurs a residence permit with barely US$40,000 in capital to start their business there. Permanent residence is easy to obtain and you can apply for citizenship after two years of permanent residence. Singapore doesn’t recognize dual citizenship, so if you are a U.S. citizen, for example, Singaporean citizenship frees you from the draconian pile of paperwork and other lack of freedom an American passport provides, including the world’s most far-reaching tax laws.
Youth is a time to explore new worlds and try new things as you come to understand yourself. It’s a great time for experimentation. If you have a business or want to start one, take the opportunity now to explore your options and plan for your future. Living in Singapore or Belgium or any other country that doesn’t tax capital gains will offer a big difference when you sell your company for millions in the future. Even if you don’t start the next Facebook, I highly doubt you’ll regret having lived in another place and expanded your horizons.
Don’t forget all of your children and your children’s children forever will have to spend 2 full years of all their lives serving in the Singapore Armed Forces if/when you take up citizenship there.
Yes, they likely will. Which is why, while Singapore is a great passport to have, it doesn’t tick all of the boxes you’d want in a second passport. But it’s a great place to bank.