You certainly enjoy being in control of your own money, and you don't like feeling like you're paying more in taxes than you should. These were probably two of the reasons that led you to become interested in cryptocurrencies. But did you know that long before the creation of this technology there were already strategies aimed at people who think like you?
It is possible to drastically reduce spending on taxes and increase sovereignty over your own patrimony by following the steps instituted by a strategy known as Theory of Flags, or the Perpetual Traveler. Check it out!
The creation of the Theory of Flags is credited to the famous American investor Harry D. Schultz. He made a fortune buying and selling small local newspapers and then had a successful career as an investor, multiplying his wealth. Famous for his libertarian thinking, he helped to spread the ideas that spread around the world.
In the 1980s and 1990s, a number of books were published in the UK. In it, William G. Hill talked about how to avoid tax collections using theory. It is believed that the author was not a real person, but a pseudonym for a collective that fought against the abuses of the State, inspired by the famous English libertarian school.
Do you see any similarities with the story of Satoshi Nakamoto, the celebrated creator of Bitcoin?
According to the strategy, in order to avoid inconvenient and excessive charges and responsibilities imposed by States, it was necessary to divide some of the dimensions of civil life in different countries. Each of these parts should therefore be under a different banner.
This means that your country of residence, the country where your main company would be based and the one you would choose to allocate the equity in should never be the same. Several strands and variations were created over time by people from different parts of the world. Initially, there were only three flags, but some contemporary theorists already speak of up to seven of them.
You can create the divisions that you deem most important and assign as many and which flags as you want to guarantee your privacy, individual sovereignty and the security of your heritage. But there are some flags that are fundamental. Let's understand what they are and how representative each one is for your life.
The first step to having more freedom is to have a second citizenship. With this, you gain access to a second identity practically autonomous from the first, with other documents and under the tutelage of a different State.
This flag is the most essential of all because it creates a layer of protection that can be the foundation for the others. Also, eventually, you will be able to choose the most beneficial citizenship in a specific situation.
There are several ways to get a second citizenship. In Brazil, for example, it is very common for people to have Italian citizenship, because their ancestors migrated here.
The second most significant flag concerns the country you will select as your tax domicile. According to the Theory of Flags, it is essential to be domiciled in one country and have citizenship in another.
With this, it is possible to avoid the obligation to fulfill certain duties, such as paying many of the taxes and fees, and still enjoy benefits offered to foreigners.
Keeping a technical residency in another country is already a very useful layer of protection. And for that, it is not necessary to actually live there, but to meet certain criteria. In many cases, it is not even necessary to purchase a property, just a rental agreement. The second most important flag concerns the country you will choose as your tax domicile. According to the Theory of Flags, it is essential to be domiciled in one country and have citizenship in another.
The most practical and safe way to manage your assets is through the creation of a company — and the country that will host it should be your third flag. There are countries that have extremely beneficial laws for this, with very low taxes and a network of guarantees to protect partners and owners, including their privacy.
A company headquartered in a foreign country can send and receive money, buy and sell goods, and enter into contracts, often in ways that make it impossible to know who the responsible owners are. With this, you create a very efficient layer of protection.
This flag is extremely important, because it is where you concentrate most of your assets. To choose the country where your heritage will be located, it is necessary to consider the culture, history, legal system and the context in which it is inserted. After all, you don't want to risk losing your savings, or having to move them in a hurry.
For this flag, you should look for a country that is free from conflict, has strict laws to encourage and protect foreign capital, and has reasonable taxation. Thus, it guarantees that your assets will be safe and that you will not need to dispose of a relevant part of it for the payment of taxes.
Finally, there is the flag of the country, where you will have the freedom to enjoy your financial resources in a safe and cheap way. It will be in this country that you will actually reside.
There are legal arrangements and strategies that allow you to spend your life in a particular country without ever having to change your status to citizen or permanent resident. But there is also the possibility that from time to time you change your country of physical residence.
This is why the Flag Theory is also known as the Perpetual Traveler Theory. In the globalized world we live in today, it is no longer necessary to travel forever, as there are safe ways to establish the other flags directly from your country of residence.
The values of freedom and individual sovereignty are very present in the crypto universe. This is because they inspired the movement that led to the creation of cryptocurrencies, so that individuals had full control over their funds, without intermediaries and in a decentralized environment.
Some theorists include cryptocurrencies among the flags, others see them as a means to establish and enjoy one or some of them, but the fact is that they are an indispensable tool for your assets to be safe and for you to maintain control. Over it independently of the consent or assistance of any authority.
Although the Flag Theory is a legal strategy for fiscal optimization, it is important to take some care when executing it. There are several known cases, mainly of celebrities and public persons, who ended up having their flags exposed and were ordered to pay tribute on their assets.
It is necessary to receive specialized assistance and keep constant attention on the changes and peculiarities that may occur in the legislation of the chosen countries.
In addition, you need to ensure that all legal acts are valid and meet the legal criteria necessary to take effect in all relevant countries.
