Taxation is legitimized by governments to finance public expenses. As such individuals and corporations are subject to various charges. Residency, employment and financial holdings create a tax liability. Some countries welcome foreigners as residents as part of their strategy to support local spending. This may include the provision of residence permits and even passports. As a perpetual traveler or digital nomad, you may be subject to personal and corporate income tax in different countries. This is not something to take lightly. Optimization of life includes the appropriate tools for personal finances to limit governmental scrutiny and ultimately penalties that can be avoided.
Location independent workers sometimes experience challenges when it comes to double taxation. Tax treaties and exemptions are available but sometimes need to be triggered. As such, tax residency, company formation and financial management are the backbone of proper personal administration.
Since taxation for nomads and perpetual travelers has multiple cross border effects, local advice might be insufficient. Therefore, advanced financial planning involves a closer look into the locations where the individual lives and works to ultimately create the most appropriate administrative structure.
The excessive rise of digital nomads triggered several governments to create special arrangements for these groups. The Estonian e-residency program and the personal tax residency program in Cyprus are examples of such initiatives. However, both do not necessarily allow the individual a temporarily or permanent establishment in the country.