These days, there are many people who would like to live as digital nomads.
There are many reasons in favor of this choice.
For example, having the flexibility of working from any place, the capacity for becoming independent and exploring the world.
There’s also the priceless sensation of feeling free and working where and when you want to while creating a substantial income that lets you save for the future.
The digital nomad is someone who has already done very important things in his career. Plus, he has shown himself to be consistent and disciplined in punctually carrying out his work, which has let him keep and increase the flow of income at length.
Now you’re thinking that if you adopt the life-style of a digital nomad you can round off even more of your income, because you’ll continue to earn the same amount of money, but be spending it in countries with a much lower cost of living than your own.
You’ve reached the long-awaited moment for leaving, when you can fly off and work while travelling the world, in the company of your laptop.
However, you still have to make more effort, that of making the nomad’s perfect tax plan!
The tax nomad is a person who loves the life-style of the digital nomad, but he also wants to carefully manage his money so that it lasts longer. Among the things he has to keep in mind, we often forget to keep in mind the physical factor.
The tax nomad’s perfect plan
We know that living abroad doesn’t exempt us from paying taxes in our country of origin.
This is why it’s also necessary to make a tax plan to estimate what our net income will be while we’re abroad.
A tax nomad is a digital nomad who doesn’t want to leave anything unresolved in his finances. He knows perfectly well that the tax agency of his country will follow him wherever he wants to go.
There are essentially two types of tax systems, depending on the country:
- Based on residence
- Based on the territory
The system based on residence, like the one in Italy, for example, considers taxable, the global income of a person residing in the country, or rather, income earned in any other country.
Meanwhile, the territorial system, like Panama’s, considers taxable only income produced in the country, so that, if the person obtains income abroad, these are tax exempt.
So then, Italian tax nomads who maintain their residence in their own country will continue to pay taxes, even though they spend a lot of time abroad.
And, in addition, if they continue to receive transfers from customers to the bank account in their country, they can’t hide anything from the Treasury.
There is a solution, and the wise tax nomad will certainly apply it, because he knows it will resolve the problem once and for all.
Before leaving to go around the world, he has to plan on going to Panama and stay there for one or two months to perfect everything.
Do you want to stop paying taxes?
The legal way to stop paying taxes in your country of origin is to transfer your residence to Panama. (This doesn’t apply to American citizens).
When you obtain residence, you can open a bank account where you will receive your customers’ transfers.
You can also request a debit or credit card with which you can make your payments or withdraw cash from anywhere in the world.
You could travel to any part of the world with your passport, with the only difference being that when they ask you for your place of residence, you would say that you reside in Panama.
And all of your income will be legally free of taxes! A nice extra profit.
As long as you keep your residence in Panama, you won’t pay even one cent in taxes! You’ll see how your income grows, at the time you begin to accumulate a reserve fund.
How do you get residence in Panama?
Look at our web page for the documents you need to present to obtain residence in Panama and to open your bank account.
The application for residence must be presented by a lawyer in Panama and we will assist you in every step.
Wen you arrive, we’ll prepare everything necessary and send it to Immigration. Temporary residence is generally granted within a maximum of 10 days.
Immediately applying for permanent residence, it can take up to six months.
When you get your permanent residence, there are two things to be done: the first is to go to your country’s consulate in Panama City and ask to be registered in the registry of residents abroad.
This registration is very important because it is only from that moment on that you become a foreign resident for the tax officials of your country and, therefore, your income will stop being taxed in your country.
However, to make sure the tax officials don’t consider your residence fictitious, you must live abroad at least 183 days per year; if not, your income could become taxable.
To obtain residence, you must open a bank account in Panama. If you have brought the required documents, you won’t have many problems opening the account. You just have to be patient, because banks ask a lot of questions.
However, you have to understand that since you’re a foreigner, the banks don’t have information about your banking history. So, some initial caution is comprehensible, since they want to be sure of the origin of your funds.
Your adventure of working around the world begins here
Once they’re sure that you aren’t a criminal or a terrorist, they’ll more than happy to open your account. If you’d like to do it quickly, we have an option for an additional charge.
There is excellent, very fast internet service in Panama, so you can work without problems.
Plus, you will have discovered the modernity, the tropical beauty of this country and the friendliness of Panama’s people/
Having reached this point, you’ll be ready to leave and begin your life as a digital nomad and work while traveling around the world.
Your residence in Panama will be your tax shield that will accompany and protect you everywhere you go.
Panamanian law permits you to keep your residence even if you don’t live in Panama. This is a great privilege granted only in Panama, because the majority of countries who grant residence also demand that you live in the place for at least six months.
Once every two years you have to return, even for a short period, to Panama, in order to maintain the continuity of the residence.
Returning there, where everything began, once every two years won’t be a great sacrifice. In fact, it will be an opportunity to balance things out and plan for the best way to enlarge your business, enjoying to the max other tax advantages offered by Panama.
