What Is A Perpetual Tourist? (How Never To Pay Personal Taxes)

[fusion_text]There are indeed many ways to legally avoid paying taxes. One approach is to become a perpetual tourist, also known as a perpetual traveler. The basic idea is that by not spending very much time in any jurisdiction, a person can legitimately avoid paying taxes and increase personal freedoms.

A key aspect of this approach is where the person is a citizen. The perpetual tourist has citizenship in a jurisdiction that does not tax monies earned outside the country. His or her legal residence is in a tax haven. It is preferable to have business interests where the corporate tax rates are low.

Making sure a person is and continues to be a perpetual tourist is a matter of following the rules and being able to prove he or she was doing so. Thus, depending on the situation, careful record keeping can be extremely important,” says Rick Flynn, managing partner of FFO Business Management & Family Office and author of The High-Functioning Single-Family Office.

The situation becomes somewhat more complicated when the perpetual tourist is one of the super-rich (net worth = US$500 million or more) and seeks to manage his or her business enterprises, as well as ensure a very high-intensity lifestyle. For example, a billionaire perpetual tourist wanted a single-family office after having decided that the private banks he was relying on were gouging him and not matching his expectations. His major concern was being able to access just about all his resources and elite professional talent anytime and anywhere. Based on his requirements, the answer for him was a near-virtual single-family office.

Essentially, the structure consisted of six boutique accounting firms geographically dispersed. Each one is the cornerstone of his near-virtual single-family office when he is in that geographic region. Each accounting firm functions, in part, as coordinators of a litany of external experts, many of which never know whom the ultimate client is. Many communications are encrypted to further ensure privacy. Also, a number of customized apps were created to speed up the communications.

According to Angelo Robles, founder and CEO of the Family Office Association, “The family office model is becoming the norm for the very wealthy. It can be adopted to any set of circumstances where the very wealthy want extensive control to help them address their financial and lifestyle concerns.”

While super-rich perpetual tourists might gravitate to a family office model, anyone considering becoming a perpetual tourist will likely be well served to engage professional advisors knowledgeable and experienced in this niche area of specialization.