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Gone roaming

08:21 04/11/2013
In this age of international mobility, technology offers enticing possibilities to live like a global nomad. Smartphones, tablets, Skype, webcams and videoconferencing all help you operate from almost anywhere on earth.

As an international nomad you can freewheel, following good weather around the globe or pursuing personal or work interests, and such a life could also have its fiscal advantages. Imagine you’ve cashed in your pension and are living off capital. Every year, from May to August you live in Brussels, with brief trips to the coast or the Ardennes. From September to November you are in Tuscany, enjoying food and wine, beaches and art cities. As the European winter sets in, it’s time to roam further afield. Pick your favourite southeast Asian countries for bustling cities, diverse cultural heritage and some of the best food and beaches in the world. In March you ski in the French Alps before heading to the Côte d’Azur to complete your nomadic year.

So how does this affect your fiscal profile? You may have a small apartment in or around Brussels. Elsewhere you rent a house, or laze in a good hotel. In doing so, you are actually a Belgian fiscal resident. If your sole income is from investments, you are in a low tax bracket in Belgium. Nationals of other countries, for example Americans, may have tax obligations in their home countries, and others may be liable to pay tax on certain assets, such as property or foreign pension assets.

If you have a job you can essentially do online, it doesn’t matter where you are. You can join conference calls with your mobile or use Skype to join meetings, all while sitting on the beach. So what are we waiting for? From a taxation angle, Belgium may not be the top choice if you are working, though if you’re self-employed or have your own management company, Belgium could still work as a base. If your business is not entirely in Belgium, the income can sometimes be structured to be partly taxed outside Belgium, at lower rates.

But is this lifestyle sufficiently green or sustainable? With some planning, even an international nomad lifestyle could fit into an ecological endeavour, and maybe reduce your tax bill along the way. To move from a large villa in the Brussels suburbs to a 200sqm apartment in the city, while enjoying the gardens of the world for a few months at a time, may actually reduce your carbon footprint, or at least not increase it. Business trips may oblige you to fly around the planet, and what about the carbon gases emitted on your odd break in Barcelona, Venice or Athens? If the environment is a priority for you, consider casting off and sailing around the world instead of using more fuel-consuming modes of transportation – though I wonder whether you’d have access to 4G internet on the ocean.

 

Dreams into reality

How can you get your finances in order and make this dream way of life a reality? It pays to plan. Not everything in life can be planned and plans don’t always turn out the way they were intended to, but it helps you structure your life so you end up with the lifestyle you want.

When you leave home for the first time, your prime concerns are simple: health, food and a roof over your head. But these require money, so you look for a job that will hopefully turn into an interesting career. With your employer you look at medical care and take the first step towards building a private pension. Soon considerations on whether to buy your own home arise, leading to thoughts about mortgage and life insurance, and savings for future projects can be put aside.

There may come a time when you consider setting up your own business, and you will want to keep investing in it. Some entrepreneurs are successful and sell their business or float it on the stock market; others go bankrupt and start all over again. But when you put all your assets into your own company, you take a risk. If you diversify your assets, you take less risk and in the long run you have a better return. Understand your risk appetite and be aware that it may change.

As the Americans say, there are two things for sure in life: death and taxes. The tax man is never far away, and you should seek a balance between the tax advantages and the simplicity of managing your tax structure. Death is worth planning for, too. This can start with the right marriage contract, and a will is useful, though it’s important to check the tax consequences, particularly if you move your tax residence abroad. You may want to hand over your business to next of kin. This can be done, for example, by structuring your assets in a way that the ownership is handed over but the income from the investments is still yours.

Make sure you keep the necessary income from pensions or investments not only to fund your lifestyle but also to pay for medical care and the certainty of a roof above your family’s head – wherever in the world it may be.

 

This article was first published in Expat Time, June 2013

Written by Dave Deruytter

Comments

shelovesblue

Wonderful I think, but...Internet not very easy. I am for instance right now in Spain, have rented a house, without internet (normal for longer rentals). In Spain, and in most countries I presume, you cannot have a contract for a stable connection with sufficient capacity for your skyping, research, downloads etc. without being registered in Spain at least as a temporary resident (the NIE number). I survive (badly) on a prepaid mobile SIM card of 1GB per month, only rechargeable every 30 days!!! So now I have 3 and still not a connection that would anything near allow professional activity. I reckon that by the end of the month I will have around 10 SIM cards and will soon end up a looney because of pin code confusion ;-)

Nov 9, 2013 17:54