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ChrisGraley (30.19)

By popular demand, the 6 flags theory.

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January 14, 2011 – Comments (10) | RELATED TICKERS: AM.DL , CRIS

A few people have shown interest in my choice of future lifestyle when the U.S. eventually implodes, so I promised to post about it. I am currently preparing for a life under the 6 Flags theory. I have tweaked the theory for my own purposes and don't follow the plan the same way that most other people do. I'll first try to explain the plan the way that most impliment it and then tell you about my tweeks and then I'll answer your questions.

The 6 flags theory is also known as PT theroy.

PT has different meanings to different people. The most common meanings are Perpetual Traveller, Perpetual Tourist, Part-timer, or Passing through, but I have heard hundreds of others. The main theroy is that countries will treat you better as a tourist than they'll ever treat you as a citizen.

So here are the 6 flags...

First Flag: PASSPORT AND SECOND CITIZENSHIP HAVEN

This is probably the most important flag. Most people focus on a country that doesn't tax it's citizens if they live in a different country, for me privacy was both more important and harder to determine. You really don't know how much any country is spying on you, but you can usually determine the means and desire that they would have to do so.


Second Flag: RESIDENCE AND DOMICILE HAVEN

For most people, a country that doesn't tax income earned abroad is most favorable. Again for me privacy is more important. Security is also more important. Also countries that don't restrict freedom are popular for the masses and myself as well.


Third Flag: BUSINESS HAVEN

This is where your income is made. Obviously you want this flag in a low-tax business friendly environment.


Fourth Flag: ASSET HAVENS & MANAGEMENT

Privacy is the big key here and this flag is not as easy to obtain as it used to be. Pressure from the US government has made once silent countries, stool-pigeons and they aren't just ratting out tax-cheats. They are giving the US pretty much all the info it's asking for.


Fifth Flag: PLAYGROUNDS

This flag isn't such a big deal for me. Most people look for countries that legalize things that most countries won't. I'm not really into drugs or sex with prostitutes, so what I look for are vacation type places with low consumption taxes.


Sixth Flag: CYBER HAVEN

This used to just be your internet presence. Most 6 flags members made a living off the internet and would set up a business in a country that would allow them to set up an online casino, music download site, or some other money making business that most other countries frowned upon. They looked for a country that would keep the owner of the server private and allow them to continue to do business. For me this is something totally different. It's a communication and privacy platform. I haven't even scratched the surface of what is possible in this flag.  This flag ties all the other flags together for me and for instance I can instruct a banker in flag #4 to transmit funds from my business in flag #3 to a prepaid debit card that doesn't have a name on it at a place I'm vacationing at in flag #5 all via encrypted email that has bounced off of servers all over the world. I can give my friends in the US a local number to call me at that will reach me anywhere I'm at in the world without the US knowing where I'm at. The possibilities here are endless.

OK, so know a brief explanation...

First of all, the way you see the theory above is very expensive if you pick optimal locations for all the flags and you invest in the lawyers to set it up for you. It gets even more expensive if you are short on time. Most PTers usually pick only one country per flag and even ignore a flag or two for that reason. Most PTers seem to get the flags in the order that they are listed and in my opinion, most do not research countries for each flag enough and make mistakes. Not big mistakes, but from the people that I've talked to, when they tell me what they are looking for in a particular flag, too often I can tell them a better choice than what they picked. This makes sense, because most of them seem to go with what their lawyer picks and I'm betting that most lawyers, don't want to research every country for every flag and even if they did, their customers couldn't afford it.

That being said, You can accomplish the same PT theory on the cheap if you have a lot of time, are willing to do most of the research yourself and are willing to make some compromises. (cheap is relative)

For me, doing this for myself, the biggest thing that I wish somebody would have told me when I started was diversification is the key to success. For most flags, I have multiple countries. Remember that the rules for any of these countries can change at any time and you may have to adapt quickly.

Flag #1 - I have 3 passports right now and will probably have 5 in the next couple of years. I will always try to accumulate more. When a country doesn't value me, I don't value the country and drop their passport.

Flag #2 I have 2 locations here. The primary is Campione D 'Itala Italy. The land here is very expensive, but I've found a workaround. The big pluses for me are that I can live in Italy without actually being in Italy. Italy gives me a favorable tax rate on my first $200,000 in income and the US ignores the first $80,000. This makes it a great country for transistion. Add the fact that I'm surrounded by Switzerland and that Italy would have to invade Switzerland to get to me is a big plus. Proximity to asset havens is very good. The Swiss Franc is the currency. It's close too my secondary residence country. The fact that Italy will ignore my business haven as long as it doesn't do business in Italy and Italy is fine if I set up a Swiss business to solely do business in Italy is good too!

Flag #3  I have 4 locations here, but I could literally have dozens if needed. This part is pretty easy and you really only need a lawyer to advise you. It's easy to set things up. Just remember to look at the laws governing businesses and not just the taxes.

Flag #4 I have 6 places here right now and 1 of them will be the US even when I move away. For obvious reasons, this flag is the flag I can talk the least about. This flag is the one where your lawyers will struggle as well. They'll have plenty of pre-packaged suggestions, but they seem to be behind the times as far as what's out there and slow to realise when an old asset haven is no longer a good choice. Take your time on this flag and research it a lot yourself. 

Flag #5 I haven't really spent a lot of time on this flag, but I will once I leave the US. Again, I'm not really into drugs or prostitutes. I would like to vacation in places that won't tax me into a shorter vacation though.

Flag #6 Choices are endless on this flag. I'm not anywhere close to settling on a structure here yet, but I'm set up enough to include my 2 previous examples for this flag and I can surf the web bouncing around from server to server every 2 seconds without any country knowing exactly where I'm at unless I want them to, same for any internet business that I want to have.

OK now I'll talk about taxes and privacy.

First off, unlike most people using this theory, I want to pay all my taxes before I leave. The US has strict laws on reporting foreign accounts and paying taxes on those accounts. It's actually easier here if you don't want to pay your taxes, but you have to understand that even though it's easier to break US law, once you do, you give the US an excuse to trample your rights, even after you are no longer a citizen. You need a very good accountant for the next part, but you can report those accounts and pay taxes on them without the US knowing where they are. I really don't mind paying taxes, but I hate paying taxes for things that I don't support. I do this every year, but I think I'll have a smile on my face in the final year.

Now I know everyone is going to have a ton of questions tomorrow, but I won't be online very much until the evening. Please still post your questions and I'll make a point of answering each and every one in detail.

I'm not really out here to sell anyone on leaving the country. My actions are my own and just responses to the choices given to me. Lately both parties in charge seem to think they can limit my choices to gain political power. While they can limit my choices domestically, they can't limit my thoughts and I can think globally. Even the US offers shelter to people oppressed from other countries. they do so only because they can profit from it.

Everyone respects me more as a tourist than they do as a citizen. Should they be surprised when I take advantage of it?

 

10 Comments – Post Your Own

#1) On January 14, 2011 at 9:04 AM, Jbay76 (< 20) wrote:

Chris,

Great post, thanks!  So two questions to begin with..

 1) " The fact that Italy will ignore my business haven as long as it doesn't do business in Italy and Italy is fine if I set up a Swiss business to solely do business in Italy is good too!"....Is this a typo?

2)  Can you list any specific sources where you found your information?  If not specific, then at least a particular department within each country.

3), Sorry, it just popped in my head, but did you really check all the countries in the world or narrow them down?  If you did narrow them down, how?

I really like this thread becuase Ihave thought for some time that it takes a lot of money to get this all set up, but now you have given me new inspiration!

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#2) On January 14, 2011 at 9:32 AM, drgroup (69.06) wrote:

Chris...please provide a cliff notes version of how to obtain all the passports. Don't you have to be a citizen of the country in order to obtain the passport?

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#3) On January 14, 2011 at 9:46 AM, ChrisGraley (30.19) wrote:

1) More like poorly worded. I can set up a business right in Campione and as long as it doesn't sell anything in Italy it won't be taxed. I can set up another business across the border a couple of miles away in Swiss territory that solely does business in Italy and it won't be taxed either.

2) The sources come and go. My favorite source used to be www.escapeartist.com but It is more of an expat resource now and doesn't have a ton of information on the 6 flags. Simon Black has a good website at www.sovereignman.com. Grandpa has a good website at www.byebyebigbrother.com Most of these sites are out to sell you books and pdf files. Some are good, some are not good but almost all of them are dated. If you read enough of these websites, soon you get an idea of what still works and what is no longer viable.

3) No I did not check all the countries in the world, but I did check a lot. I'm still checking countries and will probably always be checking them. It seems that just about every country has something useful to the 6 flags theory. Plus for me it's kind of like a treasure hunt, so I have fun with it.

Yes, it is possible to do this with little investment. It helps if you have a profession that is sought after by other countries, but even if you don't it is possible.

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#4) On January 14, 2011 at 9:54 AM, ChrisGraley (30.19) wrote:

Yes drgroup you have to be a citizen to get a passport. But there are ways to become a citizen in other countries.

The most common way is through economic citizenship. But there are only a few countries that still allow that due to economic pressure from the US. You can also naturalize. This usually takes a lot of time though. You can get citizenship based on ancestry in some countries and sometimes you can get citizenship if you have a valuable skill. There are also back-door ways to obtain passports, but I'll advise you now, that most websites advertising these deals are just out to steal your money.

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#5) On January 14, 2011 at 10:29 AM, russiangambit (29.45) wrote:

I think for most people the main issue is US double taxation law. To become a citizen of another country you need to have some osrt of a presence there, which could be done through work fairly easily but then you ahve to deal with double taxation of your income.

I don't really expect any kind of Armageddon in the near future though. I just expect a boiling forgs scenario where things keep getting worse slowly.

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#6) On January 14, 2011 at 10:49 AM, ChrisGraley (30.19) wrote:

Actually it depends on your income and where you go russian.

The US has tax treaties with 42 countries right now right now that are intended to prevent double taxation.

No matter where you go you can get the foreign income exclusion of $91,500. (Yes my amount used in the Campione example is an old number) If you are married, your spouse can claim the exclusion as well. There are also deductions that you can take for expenses abroad. Some countries also have programs where they won't tax you while you Naturalize. (Canada for example.)

Don't get me wrong, it's not easy. But it is possible.

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#7) On January 14, 2011 at 11:59 AM, RonChapmanJr (96.91) wrote:

You've mentioned this before but how much does one need to do all of this?   

What do you expect the total cost will be once you are done?

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#8) On January 14, 2011 at 1:33 PM, Starfirenv (< 20) wrote:

http://nestmann.sovereignsociety.com/2011/01/11/expatriation-the-state-department-pushes-back/

http://sovereignsociety.com/2010/08/06/ready-to-say-adios-to-the-u-s/

Limited access to non members, but still a lot of info. Ck out  A- Letter archives and Sovereign Investor.

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#9) On January 14, 2011 at 2:24 PM, leohaas (34.99) wrote:

"First Flag: PASSPORT AND SECOND CITIZENSHIP HAVEN"

At least people who follow up on this one will not be accused of being a Patriot...

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#10) On January 14, 2011 at 8:26 PM, ChrisGraley (30.19) wrote:

Ron, 

My total costs will be much higher than most because I have expensive tastes when it comes to freedom.

Even if you go with the cheapest route possible you are going to have to hire lawyers. I'm guessing that the cheapest you could do this would be between $10K and $15K.

I'm guessing I'll spend in total $700K including a very nice boat.

Yep sovereign society is another good link. Thanks starfire

leohaas, nor will they be accused of being dupes.

 

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