I have been living in Singapore for three years and have not regretted my decision for a second. Partly, this is because Singapore is my fourth country of residence and I have no attachment to any group, apart from those with whom I feel psychological affinity.
Moving to a different country might not be for everyone, but it can help you maximize your living conditions and feel freer by escaping increasingly controlling and restrictive governments.
If you live in the Western world, consider the demographics. When you couple the increasing sense of entitlements and Social Security payments with decreasing tax revenues and decreasing growth-rates… it makes it extremely important to secure your hard-earned wealth from being taxed away by your government.
It is conceivable they might even at some point make it impossible for you to leave, thus making you a complete tax slave.
DESIGNING YOUR LIFE
By keeping a couple of passports and living in a third country (and using cash wherever possible), one can design a life of anonymity and freedom – all legally.
If you want to make your life and, at least in some sense, your money, your own… you have no choice but to be “paranoid”. Interestingly, by being paranoid and then acting to internationalize yourself, you can eliminate your paranoia. Then you need not fear becoming a tax slave. Instead, wherever you go, you will be welcomed as a tourist and seen as a contributor to the local economy.
As I write this, most of my wealth is located in countries with which I have had no tax or residential connection for the last five years. And the best part is… they don't care. These countries are all grateful for my investments and know full well that, having no jurisdiction over me, if they create problems for me my capital would leave in seconds.
I live in Singapore but keep minimal wealth here. Singapore does not tax your wealth and hence does not care where you keep your capital.
But why give them a chance to trouble you? The next generation of Singaporeans might be entitlement-oriented (and they are), and therefore I want to be in a position to leave again when the time comes.
If I am fortunate, that time may never come, as its tax regime is its core competency and main attraction.
I am often asked, “Why would someone as fanatically libertarian as you go to a country where there is no democracy, where you get capital punishment for owning guns and drugs?”
It's a good question. Why would I choose to live in a country that is constantly ridiculed for the use of caning as a punishment, and that lacks freedom of speech?
Singapore's reputation makes people question if they must sacrifice their freedom in order to save taxes.
Allow me to address each of these issues.
First, it is a myth that democracies (read: dictatorship of the masses) by definition offer more benevolent living conditions. In my experience, democracies have seeds of self-destruction. Singapore, on the other hand, is more like a family-run corporation – a political system I prefer over democracy.
Here I don't see any busybodies around. Bureaucratic interferences in your life are minimal. They focus on governance and they do it relatively well. They are nowhere close to an ideal government, but compared to what you get elsewhere, Singapore is a treat.
Second, while it is true that they do have tough drug and gun laws, they are effective. Singapore is one of the safest cities on the planet and a young girl here can feel comfortable walking by herself just about anywhere, even late at night. Since I have no reason to own a gun nor do I consume drugs, Singapore fits in my life design plan just fine.
Third, while this may sound quite shocking, to me, caning as a mode of punishment looks quite appropriate in many situations.
For example, I recently saw a video of three teenagers beating an old man for fun in the U.S. The teenagers likely went unpunished. I would prefer that they had to slog for several years to make monetary retribution to the old man. But lacking that, I certainly think caning is a better form of punishment than letting the culprits go.
Lastly, freedom of speech is limited only in the arena of politics. Quite honestly, if more freedom of speech were allowed in Singapore, it would likely also degenerate into a “dictatorship of the mobs”, in which Peter lobbies or protests to steal what is Paul's. Personally, my only reason for participating in mass protests is war. But since Singapore does not participate in attacking other countries, there is no need for antiwar protests anyway. So again this is acceptable to me in my life design plan.
In Singapore, only your income is taxed, and at a maximum marginal rate of 20%. There is no capital gains tax. The benefit here being that, not only do you not have to pay tax on capital gains, more importantly, there is no way for the government to know what you actually own. (This removes the possibility of your capital being taken away from you on some pretext, as you can expect to happen someday very soon in the U.S.)
Similarly, because you don't declare tax on interest earned from bank deposits, the government has no way of finding out how much you have and in which bank.
I like my privacy. Indeed, here you don't have to worry about keeping detailed bank records and having to calculate gains on owning different currencies, a virtually impossible job. The last time I did my taxes here it took me just three minutes.
Singapore also has double taxation avoidance agreements with many countries. If your country is one of them, you might be able to stay up to one day less than six months in your home country and still become a Singaporean tax-resident. These treaties perhaps give Singapore the edge over Hong Kong in terms of where to live. (I still go to Hong Kong, though, to do my shopping since there is no sales tax there.)
Contrary to the rationalizations of procrastinators, it is much easier to move to a new country when you are still young, have no family and do not have much wealth. Once you are settled in a job in your home country, your unrealized capital gains keep accumulating. After a certain threshold, this might make your exit tax requirement so prohibitive that… ironically… for tax reasons, you do not go even if you have every intention and reason to leave your country.
The life of an international man requires him to stop seeing the world in black and white.
He must not pigeonhole countries, but design his life in order to secure his wealth and freedom as much as he can. That can often mean giving up residence in what is generally perceived as a relatively “free” country.
You have to design your own freedom.
Shop where goods are cheap and there is no sales tax… Be a tax resident where you have minimal tax requirements… Spend time in places where the cost of living is low and the quality of life is high… Seek a jurisdiction where real freedom and anonymity exist… Keep most of your money in countries different from where you live… Own passports for countries where you don't live.
And best of all, with a bit of effort, this can all be done perfectly legally and will let you stay one step ahead of your government.