Something I covered in an interview I did last year with Cheap Cancun Rentals (video at bottom of the page) is the concept of “if they can do it, so can you”. In this regards, I am talking specifically about numerous corporations and entities in the United States who choose to operate outside of the U.S. for tax and production cost reasons.
Production studios are choosing to shoot movies overseas and in other countries rather than in the U.S. specifically so they can take advantage of tax breaks and cheaper production costs. Why? Because it costs pennies in comparison to produce movies on foreign soil, which allows movie production companies to save millions in taxes and fees.
If it’s O.K. for them, it’s O.K. for you. It’s a concept that is hard for many Americans to believe. After all, for years the IRS and the federal government have been telling them that tax havens and loopholes in the system is bad, that they’ll be penalized and go to jail if they use them. But bad for whom? After all, if the government is allowing corporations and Hollywood studios to function overseas to save money and utilize cheaper costs (not to mention their own senators and officials), why can’t you?
The reason the feds don’t want you using tax havens and international investments/living abroad as an expat benefits only one person: you. Naturally, this goes against The Plan. They want you staying close to home, tucked away in suburbia, spending your tax dollars at home. As an expat or full-time traveler you are spending your money offshore, and paying less taxes. And while Hollywood/big business is certainly paying less taxes and utilizing cheaper labor costs, it’s all about money. Hollywood brings in billions of dollars per year of U.S. revenue…the average expat does not.
You can see the issue. The government is more than willing to turn a blind eye to companies and individuals based abroad and paying less taxes as long as they are still bringing in millions/billions of dollars of revenue to U.S. soil, but the moment you start talking about personal gain as a solo expat, most Americans have been trained since they were children to believe that it’s “bad” or “wrong” or “illegal” for you to use the same loopholes that big businesses use.
Go ahead. Just Google “tax haven”. The results are full of warnings about how you shouldn’t be doing it because you’ll get in trouble with the IRS. But Hollywood movie studios and production companies do it all the time.
Just look at the latest Conan the Barbarian movie, which was filmed in Bulgaria, along with The Expendables 2. Fringe. Alcatraz. Person of Interest. Game of Thrones. Hell on Wheels. The Firm. The X-Files, the Stargate series, and just about every hot show that’s on today, such as Continuum, XIII, Revolution, The Borgias, Supernatural and beyond. These are just a handful of examples of TV shows that are/were filmed in Canada or abroad.
Why were they filmed abroad? Because foreign actors cost less than American actors, production costs are lower, and the production companies can take advantage of tax breaks. Just remember the revenue those shows bring in is still U.S. income.
The same laws that apply to big businesses and Hollywood movie studios apply to you as well, it’s just that you’ve been discouraged from doing so because you don’t bring millions of dollars of revenue to the U.S. But here’s the thing: if they can do it, so can you.
Millions of expats every year are living abroad with foreign bank accounts, utilizing tax havens and making international investments and establishing financial independence. It’s not illegal so long as you do things by the book, but it’s only natural for the government to be in a panic about more and more people choosing to move abroad every year, because unlike movie studios who are pumping money back into the economy, your unspent/saved dollars and commodities are helping you personally…and the last thing they want is for you to free yourself from the system.
So the next time you think about whether or not you want to register a business in another country, open up a new bank account or live somewhere where the cost of living is a fraction of what it is back home…go for it. After all, if Hollywood can do it, so can you.
Note that this article really only applies to U.S. expats and digital nomads. If you are from any other country on the planet you don’t have to worry about your worldwide income being laid claim to by a corrupt government on its last legs.
This post originated as part of The Expat Guidebook blog, and appears in expanded format within the eBook itself.
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