Are you wondering what a Perpetual Traveller is? It is not just another trendy word, as you might expect.
Perpetual Travelling is the art of being stateless without losing your rights as a world citizen.
No country is your master; you are the master of the countries that you choose according to your own criteria. For example, Panama for your residency, Emirates for your business, Dominica for your passport, Singapore for your money and Thailand for the fun. As a Perpetual Traveller, you diversify your life and achieve full independence.
Perpetual Traveller = Permanent Tourist = Prior Taxpayer
As a Perpetual Traveller, you can enter countries as a tourist. You can also legally conduct your own online business or offer your services as a PT.
Of course, entering the countries as a tourist limits the amount of time that you can spend in one place. In some countries, you can only stay for a month, in many the limit is 3 and in very few such as Mexico, the limit is half a year.
However, you can often do a so-called visa-run, i.e. travel to a neighbouring country and return immediately with a new visa.
As a citizen of the UK or Ireland, you also have the valuable opportunity to live permanently in every EU Member State. It is important, however, that you only stay as long as you are still classified as a tourist. By doing so, you usually do not have to pay taxes.
It is not uncommon to consider the abbreviation for Perpetual Traveller (PT) to mean “Permanent Tourist” or “Prior Taxpayer”.
Your tax liability depends on the taxation law of your home country, which, with the exception of the USA and Eritrea, does not tax income earned abroad as long as you are non resident. In many countries, the 183-day rule applies.
As long as you spend less than half a year in one country, you will not be considered as a permanent resident and can therefore usually avoid taxes if you satisfy some additional conditions.
You can also avoid indirect taxes (VAT) by using the services you need in countries with low-to-non-existent taxes. The same applies to the purchase of products (in this case you can also try to get the VAT paid back).
As a resident in Australia or Canada, for example, you can have the VAT paid on all purchases in EU countries refunded. Depending on the country, this system is also possible for different nationalities.
Other advantages of Perpetual Travelling
Of course, being a PT not only provides benefits in terms of taxes and your security – it offers you so much more.
Perpetual Travellers rarely live in their country of origin and that alone makes them special. Usually, they are global people who have left their comfort zones and are open to new experiences and information.
A Perpetual Traveller is a person who thinks differently.
One of the great problems for the majority of people is that they try to achieve something special by doing the same as everyone else. This, of course, is challenging.
A normal person goes to university, earns their degrees, does internships and later passes entrance exams or applies for a job and waits to be chosen out of hundreds of candidates.
A perpetual traveller turns things on its head; they don’t play by the rules. They start their own company, invest the money that they earn, if they can’t do what they want in the place they’re living, then they go somewhere else and, of course, if the state is suffocating their business with regulations and taxes, then they simply move it elsewhere…
A Perpetual Traveller has the advantage of geoarbitrage
Geoarbitrage is all about making the most of the features of different zones/countries around the world.
As a PT, you can sell your products or services in rich areas that are used to paying high prices and produce the products or develop the services in areas with the necessary infrastructure but are more beneficial for salaries, laws, taxation, access to labour and the products or materials that you need.
This not only applies to your business, but also on a personal level: you can choose to earn your money in a strong currency or in a country which pays well and live in another where living costs are much lower.
For example, you could earn your money in Spain and live in Paraguay. Or you could have customers in the United Kingdom and live in Thailand.
A Perpetual Traveller has better connections.
As you will discover when you start to move around, there are many people out there who, like you, have decided to get going and look for something more. You are joined with these people by an invisible bond and a need to meet new people who you can rely on and who can rely on you.
This is not usually the case in your country of origin because you are surrounded by the same people and these people do not have time to dedicate to you, they already have enough with their old friends, work colleagues and families.
A Perpetual Traveller discovers more (business) opportunities
Being better connected has many advantages, among those are coming across more business opportunities.
As soon as you stop living like everyone else, you will start to come up with lots of new ideas, you will find things in other sectors and cultures that will attract your attention and you can try to adapt to other markets.
Furthermore, you will find people who are doing lots of exceptional things and you can team up with them.
You can learn a variety of new things, particularly languages.
And finally, as a Perpetual Traveller, you will have the opportunity to learn lots of new skills, get to know other cultures and, of course, learn new languages.
Even if you only relocate from the United Kingdom to Malaysia or from Mexico to Uruguay, you will still have the opportunity to discover a completely different society and to significantly widen your personal and professional horizons.
How do I become a Perpetual Tourist?
If you are already convinced about the benefits of becoming a Perpetual Tourist, the next step is to tell you how you can become one.
As we said before, a Prior Taxpayer does not pay taxes but in order to stop paying them, they have to stop being a taxpayer in their country of origin. For this reason, the first step is to be deregistered as a fiscal resident.
These are the steps you need to take to deregister in the country of which you are a national:
- Leave your home in the country where you are a national and cancel everything that could imply that you are actually still living there (services, subscriptions, car registration, insurances…).
- Move to another country where you can easily become a resident – this will be your ‘bridge’ country. If you are an EU citizen or you have ways to obtain residency there, you can relocate to Cyprus or another European country.
- Register as a resident. To do so, you will have to find housing (normally a room in a shared apartment is enough). You will also need health insurance and you should be able to prove that you have a minimum income.
- Once you have registered in the ‘bridge’ country, you will notify your country of origin about the change of residence so that they deregister you as a fiscal resident. It is likely that they will ask you for some documentation in order to prove that you have a new place of residence. Your country’s consulate can often help you with this.
- Once you have deregistered in your country of origin, you can leave your new home and immediately deregister in the ‘bridge’ country. For this, depending on the case, it is usually enough to let your visa or permit expire or to not renew it. If this is not the case, you will have to go to the city council or the agency responsible for the deregistering of foreign nationals.
If you are not a national of the country in which you reside, the steps are simpler:
- Leave your home in the country where you are not a national and cancel everything that could imply that you are actually still living there (services, subscriptions, car registration, insurances…).
- Go to the city council or relevant agency to inform them that you are going to leave the country and request that they deregister you as a resident (or just don’t renew your residence permit). Usually, they will not ask you for further information but if they do, you should be able to tell them something, perhaps that you are going to return to your country of origin or that you have a new love in another country and you are going to see how things go with them.
Whatever your situation may be, once you have deregistered and aren’t tax resident anywhere, it is essential that you take notice of the laws in the different countries that you pass through so that you do not accidently become a tax resident there.
In principle, the most important thing is to not have any housing available and to avoid staying in a country for more than 183 days. However, the regulations may be much more complicated depending on the country (the United Kingdom is known for its complicated residency test).
You can read more about the 183-day rule and other terms and conditions for residency in our article about relocating your fiscal residence.
The Thirteen Flags Theory
Perpetual Travellers know the best offshore strategies and use the Flag Theory to internationalise their life.
There are hardly any restrictions on the number of flags – the Tax Free Today Blog suggests the following 13 flags, which you can read about in more detail in our article about Flag Theory:
- Obtain a passport or citizenship in a country that doesn’t tax foreign income or control what you do.
- Obtain permanent residence in a safe country, preferably one without property or income taxes.
- Set up your company headquarters (i.e. where you earn your money) in a country without corporation tax and accounting obligations.
- Keep your assets in a safe place, preferably somewhere without taxes on capital.
- Choose your “playgrounds”, i.e. the places where you can enjoy your life, preferably somewhere without VAT and sales taxes.
- Create an online company: think about offshore hosting, domains and Email service providers.
- Take advantage of medical tourism.
- Get married (obtain additional citizenship through marriage).
- Have children (citizenship at birth).
- Hire employees or virtual assistants, preferably in a low-income country and sharing the same language
- Think about education, preferably somewhere where homeschooling or unschooling is permitted.
- Protect your data. Choose preferably places with high security against censorship and theft.
- Think about insurance, which is very different from country to country in terms of quality, costs and scope of services
The most attractive places to live and work
Simply knowing about the flags is not enough. It is crucial that you know in which countries you can actually plant your flags.
Tax Free Today introduces regularly locations around the world that are suitable for doing so (you can subscribe here). Of course, special attention is placed on the best places to live and work.
Whilst it is very important that your assets are indeed well-protected, your quality of life is really the deciding factor here.
As a Perpetual Traveller, you have the unique opportunity to try different places out at will and return to the paradise of your choice at any time.
If you have already found your paradise and you do not want to leave, there might be options available for you to settle there permanently.
You can continue to be stateless even if you want to take things a little easier. Few people are made for permanent travel – many need a break at one time or another. This is perfectly legal and in no way changes your independence or statelessness.
You can still think limitlessly and live independently even if you decide to live in one country for a long time.
After all, as a Perpetual Traveller, you know that you can leave there again at any time.
This would ultimately be my definition of a Perpetual Traveller, which can also be applied to true digital nomads:
“The ability to leave a country overnight.”
After all, mobility and adaptability are a Permanent Tourist’s greatest strengths. When you are mobile and adaptable, you are antifragile, you do not crack under pressure, but rather thrive on it.
Unforeseen events may bring bad luck to many countries, but some will also benefit. Such as neutral Switzerland, which has always been a safe haven during all the world’s major crises.
As a Perpetual Traveller, you ultimately combine all the aspects of a stateless person:
You have the stateless mindset and are no longer afraid of being trapped from your freedom.
You know what statelessness means and why your self-imposed exile brings more happiness to your life.
You are a digital nomad but turn into a Perpetual Traveller by using offshore strategies like the Flag Theory.
You appreciate that you are allowed to, you can and you want to shape your own life according to your own ideas and expectations.
In short: you are stateless, you are a Perpetual Traveller, and this is so because your life is yours.