Currencies, Taxes and Citizenship
Currencies, Taxes and Citizenship
By William Cate
Would you accept 1,185,000,000 Tugriks for your company? If you invested in a company, would you accept repayment of your investment and profits in Tugriks? Outside of Mongolia, where the Tugrik is the national currency, the answer would be NO!
Acceptable International Currencies
Today, there are five major world currencies: the U.S. Dollar, the British Pound, the Japanese Yen, the Euro and the Swiss Franc. Payments in any of these five currencies are acceptable almost everywhere in the World.
There is a secondary tier of about twenty semi-acceptable world currencies, like the Canadian Dollar. They can be used in international business because they can be converted into the five major world currencies without the issuing Government's review of the currency transaction and the Government's potential intervention and termination of the payment.
Back to Tugriks
If you have a feed business in Ulan Bator, Tugriks are great. If you expect to die in Mongolia and have your children manage your feed business, Tugriks are terrific. However, if you want to expand your feed business into Russia or the PRC, Tugriks become a serious handicap to your plans. If you want to send your children to Cambridge, the registrar won't accept Tugriks for their tuition. Should you decide that the Mongolian Winters are more than you care to withstand in your old age, you can't use Tugriks to relocate to the South Pacific.
Assuming that you have average intelligence and a global vision, you'll do business in a major world currency. It's the only way that your company can grow beyond your national borders. It's the only way that you, your family and heirs will survive comfortable for the next hundred years. There is a saying in the States that few people heed. Don't put all your eggs in one basket. History teaches us that eventually political, economic and social upheaval destroy any basket (country).
Taxation Is Not Uniform Around the World
In the 11th Century, Robinhood fled to Sherwood Forest, objecting to a 20% Government income tax rate. A millennium later, the income tax rate in the UK is 50% and nobody knows the exact location of Sherwood Forest. This isn't progress.
At this time, you can find your Sherwood Forest in Belize, Nevis, the Cayman's, Nuie, the Bahamas and a list of low tax countries. If you have a global business, it must be located in a low tax country to maximize your profits. If you want to maximize your income, your investment profits must be taken in a country that will tax them least. I'm among the guides to the modern Sherwood Forests. If you don't see the logic in operating from Sherwood Forest, you can't succeed in the Global Village.
Citizenship is Your Choice
You had no control over where you were born. As an adult, you have every right to determine your citizenship. You formed your company in some country. You have every right to move it to whatever country best services your needs. If you intend to operate a Global Business as an International Citizen, you should do both.
I favor Belize for your corporate jurisdiction. Taxes are extremely low on non-Belize business income. I favor Canada as a better citizenship location. You must make an investment in Canada to become a citizen. You must live in Canada for three years. Currently, nobody in the world is upset with the Canadians. The Canadian offer is worth considering for most business people.
Citizenship and Taxation
I know a Canadian attorney, who can secure Landed Immigrant Status for most families whose members lack criminal records and are HIV negative. Canada offers a five-year tax holiday for new citizens. So, you won't be taxed during the period that you must reside in Canada to obtain your citizenship.
Canada doesn't tax its nationals who are not living in Canada. You can avoid income taxes by leaving Canada with your new Canadian passport and living in any country that doesn't tax foreign-source income. Few countries tax foreign-source income of their non-citizen residents. So, you can live almost anywhere probably including your country of birth.
A global vision requires that you use a major world currency. You must seek the lowest legal tax rates on your income and that of your company. You should consider adjusting your citizenship to one that is more in tune with your international reality.
To contact the author: Visit the Beowulf Investments website: [http://home.earthlink.net/~beowulfinvestments/] Or, visit the Global Village Investment Club Website:
About the Author
He has been the Managing Director of Beowulf Investments [http://home.earthlink.net/~beowulfinvestments/] since 1981 and is the Executive Director of the Global Village Investment Club [http://home.earthlink.net/~beowulfinvestments/globalvillageinvestmentclubwelcome/]