How Digital Nomads & Remote Workers Pay $0 In Taxes, Legally

The tax law for majority of the world citizens is defined by the physical presence. If you spend more than 180 days in any country regardless of what citizenship you posses, you’re liable to pay taxes in that country.

However, if you don’t spend more than 180 days in any country in any given year, your legal tax liability is almost always going to be $0. So if you’re spending 4 months in Pakistan, 4 in Thailand and 4 in Turkey, you owe no income taxes to any of these countries.

If you work as a freelancer, in a tech company, in an e-commerce business or anything that can be done remotely, you can travel the world and legally owe $0 in taxes. If you’re feeling a little adventurous you could spend your potential tax liability on your travels, at no added cost really.

This applies to citizens of most countries in the world with a few exceptions such as citizens of US who are liable to pay taxes in US regardless of their residence.

Even the workers in US can take advantage of state taxes by moving to sunny states with 0% taxes. As Twitter, Shopify have already announced going fully remote, and Facebook planning to do so smoothly over the next 5 years, I see a lot of people taking advantage of this. The biggest loser, of course, would be California.

A Billionaire’s Advice [Part 2]

Yesterday I wrote about a meeting that I had with a billionaire in NYC and some of the advice that he gave me. When we met him, our situation was unique and it made us feel invincible. So I asked him some questions that a lot of other people probably wouldn’t. Because we had a unique relationship with him, he was very kind to us, and wanted to genuinely help us so he welcomed all questions.

The unique situation that we had was that we had successfully setup the US infrastructure including a company, payment gateway and access to other business tools that weren’t available to people in Pakistan. We were at the top of our game with regards to the revenue that was being generated and like other Pakistanis we had extra-ordinary tax benefits available for IT services and IT related services. So when he recommended that we move to US, a natural question came up that we’re able to use most American infra without paying any taxes, why would you ask us to move to US, bear higher costs of doing business and also pay insanely high taxes.

His answer was tax is what you pay for the privilege of doing business in the US. The privilege that you think you have is not nearly enough compared to the privilege that you will have once you’re here. He was vague like that. He didn’t give any specifics of what privilege other than what we already have.

He reminded us once more, “I was going to be a teller at a bank 5 years ago but I’m not. The US has something to do with that”.

I didn’t follow his advice. I’m still here in Pakistan. I know I missed a lot of things. As a digital nomad, that’s okay. But if you’re looking to build the next big thing and want to amass insane amount of wealth, you should give his advice a thought.

Achieving Gender Equality In Tech

It is often statistically reported that women are paid lesser than men in most lines of work. In tech, specifically, it is said that women are paid 5-40% lesser than their male counterparts.

Another striking statistic that is often highlighted is that women make up only about 25% of the tech workers. This particular statistic doesn’t bother me because in comparison, healthcare industry employees 77% women. One gender could be more inclined towards working in a particular industry than the other and there shouldn’t be anything wrong with that.

Coming back to salaries, Fiverr, a freelance platform reported that on their platform women at average earn $96 against their male counterparts who earn $100. This represents a 4% difference and is by far one of the best reported figures I’ve read regarding the gender equality.

I’ve often written on this blog that freelancing, remote jobs or distributed companies have many advantages. I’ve often highlighted the location and time independence as the most major advantages. You could be anywhere at any time living the millionaire lifestyle.

But the data published by Fiverr has given me new reasons to celebrate the digital nomad lifestyle. You could be a man or a women. You could be a Muslim or Jew. You could be in Syria or Romania. You’ll get the equal opportunities and wages as everyone else on the platform.

Distributed companies, remote employment and freelancing is the answer to gender inequality. Not just gender inequality, it is also the answer to racial inequality or any other kind of inequality. Obviously in addition to granting you freedom and wealth.

Turkey, Again

I’m travelling to Turkey, again. I first visited Turkey when I was 6 months old. My parents took me there. They have a lot of footage from our trip which I also recently got to watch again.

My father, who is retired now, spent a lot of time in the past few weeks trying to digitize all the VHS content that he had. He has found some success and restored a lot of that content.

My second visit to Turkey was when I was 25. Since then I’ve been there every year, at least once.

Turkey is what Pakistan could have been. It is also one of the potential countries suited best for digital nomadism.

The quality of life is miles ahead of what it is here in Pakistan. The cost of living is incredibly cheaper than most of the developed countries. In my opinion, cost of living is only 33% higher in the metropolis of Turkey compared to the metropolis of Pakistan. So, if you need $1000 to live in Pakistan, you only need $1300-$1400 to live in Turkey.

This slightly higher cost for a much better lifestyle makes it my favorite spot to spend some quality time.

Here’s my favorite video about Turkey.

How Digital Nomads Live the Millionaire Lifestyle

Money is a really strange concept. A lot of people do not understand it very well. I’m actually willing to bet that there are more people in the world who don’t understand money than those who do. Unfortunately, they don’t teach you money in schools, certainly not the way I want to talk about it.

I often encourage everyone in the developing and emerging markets to work on the internet, reach a global market and earn a foreign exchange. I go on to the point where I believe and preach that it’s often even better for you to be positioned in an emerging market to unleash and hack the full power of money. Here’s what I mean.

It is ten times easier to live on $3000 in Pakistan, Indonesia, Thailand, Vietnam, Turkey, Bulgaria, and so on than it is in US, Canada, Australia etc. It all comes down to purchasing power in the end. With internet, for the first time in the history every individual has been given an opportunity to hack money in a way that you can absolutely earn an equivalent of what you can earn in US, without physically being in US. The equivalent might be equal in the number, but it’s even more valuable. Which brings me to my point, that money needs to be measured in the purchasing power terms.

Some of you might argue that the quality of life is not good in these emerging countries. I’m again willing to bet that there are dozens of countries with better quality of life than in US, that are 10 times cheaper, with lesser taxes, often complete tax waivers on exports and foreign exchange, and allow you to earn (online) an equivalent of what you’d make physically in US.

Great entrepreneurs not only work on yielding high gross revenues, but also on cutting expenses. For bootstrappers, reduction in expenses is the survival game. So use this opportunity to set up your company anywhere in the world with the right infrastructure and ecosystem while positioning yourself anywhere else in the world where you have the best and most affordable lifestyle and have a distributed team to run your business.

In the end it’s your choice whether you want to to live like a millionaire, or be a millionaire, or both. I’d go for both.