In an interconnected world, each country shines in its own way. Flag Theory highlights the special nature of each country, whether for its ideal location for residency, starting a business, or investing. You have the opportunity to plant a “flag” every time you incorporate a part of your life into a new country.
In this week’s Property Experts Cyprus article, we look at distributing your life around the globe under the concept of Flag Theory and the benefits of using Cyprus as one of your destinations of choice.
What is Flag Theory?
Those who engage in Flag Theory are often known as ‘perpetual travelers’ even though you can establish your flags through Flag Theory without traveling. These individuals strategically set up flags around the globe for greater freedom and prosperity as well as additional security.
Under the concept, perpetual travelers achieve many advantages across all areas of their lives, such as:
- Increased freedom
- Greater privacy
- Generation and preservation of wealth assets
- More security and stability during uncertain geopolitical situations
- Legal ways to lessen taxation
- Peace of mind while living in a global playground
Those that plant their flags around the world are now more free to virtually move around the globe to improve areas of their lives, from banking to residency. Although the concept started for those with a large amount of financial wealth, many individuals today are taking advantage of the concept to diversify their lives and enhance their financial well-being, namely digital nomads and online entrepreneurs.
The History of Flag Theory
Fifty years ago, Harry Schultz began advising his clients to place their wealth in specific jurisdictions. At the same time, he also advocated for his clients to get second passports, set up a company abroad, and establish a residence in countries that had low taxes or were tax-free.
His first book, “Tax Exile,” nearly got banned by the Congress of the United States. Despite the governmental annoyance, his strategies were legal and allowed individuals to reclaim freedom and control over their own lives. Schultz turned his advice into the first three flags of Flag Theory.
Flag 1: A Second Passport
At the top of the list is obtaining a second passport. Those with the means to do so and a home country that allows for dual nationality find a new life and more freedom with two passports.
There are greater options when traveling, more choices in opening bank accounts, and paves the way for more security during uncertain times as seen in the face of Brexit for the families of those with second passports, including their parents and future generations.
Getting a second passport is not as difficult as it sounds. Some countries offer citizenship based on family descent, time spent within the country, money or investment programs, or through company registration and set-up.
Cyprus offered a citizenship program in the past but has recently ended this option. It’s possible to get citizenship after 7 years of residency in the country through naturalization.
Flag 2: A New Residency
Under Flag Theory, individuals can choose a destination for their second flag as permanent residents in a country that offers them legal tax solutions. For example, the UK estimates that approximately 900,000 British citizens are long-term residents of other EU countries alone.
As those who use Flag Theory spend time away from their home country and become tax residents of another, they can find their taxes lowered. For instance, in Cyprus, those who spend 60 days annually in-country can become tax residents and pay some of the lowest taxes in Europe.
Flag 3: Company Registration in a New Locale
Setting up a corporate structure in a destination of choice can have great rewards for doing business, capitalizing on investments, and decreasing business liability. Forming an international company is essential in the modern, globalized world. In Cyprus, setting up a company is easy and straightforward, while also offering a strategic geopolitical location and many tax incentives.
Flag 4: Investment and Assets
WG Hill formalized the theory with the addition of the 4th and 5th flags. When establishing this flag, perpetual travelers utilize their international knowledge of the financial jurisdictions.
They pick the best places to protect their wealth and assets in offshore bank accounts where the financial structure is strong. They also ‘internationalize’ their assets to protect themselves for when financial situations turn bad or in countries where the systems give them greater access to their assets in times of uncertainty or need.
In developing countries, real estate investment can provide cheap opportunities to increase your yearly income from rental properties. Moreover, with the establishment of automation companies such as Airbnb, you don’t even need to be at the rental property in person to manage and handle the investment.
Flag 5: Land and Lifestyle
Perpetual travelers know the world is their playground. Different countries offer unique lifestyle environments, from nature to cuisine to shopping and entertainment.
Through the process of Flag Theory, individuals will find the places they want to stay for longer, and these are the places in which physical land should be acquired, especially as land is a limited resource and an excellent investment.
Even though perpetual travelers are free to move and travel regularly, having a stable home base provides options for income earning and productive solutions for life’s challenges. For instance, having a home base means having utility bills to open bank accounts and acquiring tax certificates, both of which can aid other areas of living.
As the idea of Flag Theory becomes more prevalent and popular, new flags are starting to emerge, ranging from online spaces to medical tourism and insurance.
What Does It Mean for Digital Nomads and Online Entrepreneurs?
Digital nomads and online entrepreneurs can reap great benefits under Flag Theory. Much of their businesses and lives are already structured around operating internationally despite their awareness of Flag Theory principles. Strategically using the concepts of Flag Theory allows digital business owners more growth and livelihood potential.
Given their international experience, digital nomads and online entrepreneurs can plant flags in the countries that have offered them the best opportunities. As much of their work happens online, establishing businesses in a jurisdiction with greater intellectual property protection and lower tax rates can help digital business owners gain more work and financial security.
Entrepreneur claimed Cyprus as one of the best places for digital businesses to register a company, not to mention the country’s attractive residency programs. Under the program, many digital nomads and online entrepreneurs can become tax residents of the country in as little as 60 days and benefit from the incentivized tax system.
The Benefits of Cyprus
Known as the Playground of the Gods, Cyprus is a country that offers all types of opportunities for planting a flag.
To start with, the cost of living, ease of communicating in English, and advanced healthcare make Cyprus an ideal place of residency. As an EU member state, it has a high Human Development Index and is one of the safest countries in the world.
As perpetual travelers are constantly seeking new adventures, Cyprus is a historical and cultural hub of vibrant lifestyle options. There are many national parks and some of the best beaches in Europe. From the Mediterranean food to UNESCO world heritage sites and world-class diving sites, Cyprus has interests for any enthusiast.
Moreover, Cyprus is a great place for starting a company and the business environment is thriving. Taxation rates are some of the lowest in the EU, with the corporate tax rate at 12.5% and no withholding tax or capital gains tax (except for selling property). There are also a number of individual tax incentives for tax residents of the country and the 60 Day Rule makes it easy to become a tax resident. Digital nomads can use Cyprus as a beneficial home base as well as an exciting place to explore year-round.
Real estate is also on the rise in Cyprus. The industry is experiencing a surge in new investments and developments. There is no better time to invest in the country for work, lifestyle, or business. Further, Cyprus has garnered international attention for its residency by investment program for individuals interested in planting more permanent flags outside their home countries.
This Jewel of the Mediterranean is not only a Playground for the Gods but the perfect global playground for those interested in Flag Theory strategy by offering residency, company registration, reduced taxation, and affordable real estate.
Want to know more about how Cyprus can be the ticket you need for greater freedom in work, travel, and lifestyle? Property Experts Cyprus has the answers you want about Flag Theory and planting flags in this ideal Mediterranean country.
Our experts can help you navigate residency by investment, register, and set up your digital business, and assist you in relocation to Cyprus. Diversifying your life as a perpetual traveler with flags in Cyprus can not only protect your assets but also open the doors to residency options. Contact our team today to start planting flags around the world on a playground with so much to offer!