This Country Has Just Become a New Tax Haven — Transcript

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1. 0:00Europe has a new tax haven, at least
2. 0:02almost it does, and it's probably not
3. 0:04the country you expected. I have to
4. 0:05admit I was kind of shocked to see this
5. 0:07country offering one of the best tax
6. 0:09incentives in the world because while
7. 0:11most people are still obsessing over
8. 0:12Portugal, other people are obsessing
9. 0:14over Monaco or Thailand or the same
10. 0:17tired list of acceptable destinations,
11. 0:19Turkey. Yes, Turkey has been building
12. 0:22its own tax exemption better than
13. 0:24anything you'll see in Greece or Italy
14. 0:29or perhaps even Switzerland when it
15. 0:31comes to a long-term tax exemption.
16. 0:34Today, I'm going to tell you exactly
17. 0:36what Turkey is offering and why you
18. 0:38might want to consider it.
19. 0:42Of course, we know that much of Europe
20. 0:44is becoming much, much more aggressive
21. 0:46on taxes. They're adding exit taxes, but
22. 0:48Turkey, to their credit, they offered
23. 0:50citizenship by investment a number of
24. 0:51years ago. They continued that program.
25. 0:53You buy a piece of real estate or you
26. 0:54put money in the bank or you hire
27. 0:56people, you get a passport on the spot.
28. 0:57You don't have to keep those investments
29. 0:58for 3 years, and then you can exit those
30. 1:00investments, keep the passport for life.
31. 1:02Well, now they're stacking on top of
32. 1:04that a potential 20-year tax exemption.
33. 1:06You could literally raise your kids
34. 1:07there in the entire time this exemption
35. 1:09goes on. So, let's talk about it. I'm
36. 1:10Andrew Henderson, founder of Nomad
37. 1:12Capitalist. We're a boutique consulting
38. 1:13firm that helps successful entrepreneurs
39. 1:15and investors legally reduce their taxes
40. 1:17in dozens of countries around the world,
41. 1:19move their business overseas, protect
42. 1:21their assets in offshore bank accounts
43. 1:23and trusts, and get second passports,
44. 1:25all designed to give you optionality in
45. 1:28changing times. You can learn more at
46. 1:29nomadcapitalist.com.
47. 1:31So, I like Turkey as a tax, soon-to-be
48. 1:36tax-exempt country because I see greater
49. 1:38flexibility than programs like Italy,
50. 1:40which was already more flexible than a
51. 1:42country like Switzerland, kind of the
52. 1:43original lump sum tax program. But, this
53. 1:45isn't even a lump sum program. This is
54. 1:47not even pay us X amount of money and
55. 1:49we'll leave you alone. This is we're
56. 1:51just exempting your income. So, it's
57. 1:53more in line with something like a
58. 1:55Uruguay, for example, which has a
59. 1:57long-term tax exemption, except Uruguay
60. 1:59just dramatically raised the stakes in
61. 2:01the investment to get in. Why? Well,
62. 2:03because people are moving to Uruguay
63. 2:04from Argentina and Brazil and places
64. 2:06that you might even think about, but
65. 2:07like lots of people were going to
66. 2:09Uruguay for the tax exemption and
67. 2:10they're like, "We can get more money
68. 2:12from this." So, they did. So, this is
69. 2:14one of the best tax deals you're going
70. 2:15to find anywhere in Europe. Now,
71. 2:17obviously, part of Turkey is in Asia and
72. 2:19part of Turkey is in Europe, but let's
73. 2:21go through the program. It's a 20-year
74. 2:22tax holiday for people who move to
75. 2:24Turkey. And what that means is now these
76. 2:26these details are being hammered out.
77. 2:27This is not yet in effect, but it's
78. 2:29basically going to go into effect is if
79. 2:31you have not lived in or been a tax
80. 2:33resident of Turkey, you can come in and
81. 2:36you can get this status. And so, what we
82. 2:38understand now is you can also come in
83. 2:40as a new citizen through the citizenship
84. 2:42by investment program because what it is
85. 2:43is you have not been a tax resident
86. 2:45before. This is similar to how some of
87. 2:46the programs in Europe work where you
88. 2:48know, in Greece, for example, you you
89. 2:50can't have been a tax resident for X
90. 2:51number of years. And so, once you sign
91. 2:53up to the Greek program, for example,
92. 2:55you can't exit it and then come back
93. 2:57later because you won't meet the
94. 2:58conditions of not being tax resident
95. 3:00recently. Basically, if you have not
96. 3:01lived and paid taxes in Turkey, you are
97. 3:03eligible. President Erdoğan has
98. 3:05announced a new tax incentive package.
99. 3:07They want to attract foreign investors,
100. 3:08high-net-worth individuals to Turkey.
101. 3:10Whatever you want to say about Turkey,
102. 3:11here's my view. And I I give Italy and
103. 3:13Greece and other European countries who
104. 3:15have done tax incentives the same
105. 3:17credit, which is yeah, Italy and Greece
106. 3:20were like, "Hey, things aren't looking
107. 3:21good over here. We got to get some money
108. 3:22in this joint." So, good for them for
109. 3:25doing what like the legacy brand
110. 3:27English-speaking Western countries would
111. 3:29never do, like the US or the UK, where
112. 3:31they're where they're getting rid of tax
113. 3:32incentives. They got rid of the non-dom
114. 3:33program. Good for any country that says,
115. 3:36"You know what? We've got to be
116. 3:37competitive." That tells you something
117. 3:39about where that country is right now.
118. 3:40And so, Turkey is saying, "We'll offer
119. 3:42our citizenship to want to bring in some
120. 3:43money. We want to bring in dollars." And
121. 3:45now we're going to let you come and live
122. 3:46here because it's more important for us
123. 3:47to have rich people coming and living
124. 3:49here and bringing their wealth from all
125. 3:51around the world than it is for us to
126. 3:53like get nothing from them. So, that
127. 3:55tells you something about what this
128. 3:56country is thinking about. The program,
129. 3:58individuals have not been Turkish tax
130. 3:59residents for at least 3 years, so
131. 4:01that's more flexible than other European
132. 4:02countries will be eligible to relocate
133. 4:04to Turkey and benefit from 20 years of
134. 4:06exemption on foreign source income and
135. 4:08capital gains. Now, of course with these
136. 4:10programs, if you go and buy up a bunch
137. 4:12of rental real estate in Turkey for
138. 4:14example, or likely, you know, Turkish
139. 4:16stocks that pay dividends, you know,
140. 4:17Turkish source income will still be
141. 4:20taxed. What they're basically creating
142. 4:21is some version of a territorial tax
143. 4:23system, except for people who haven't
144. 4:26lived there before. I would argue this
145. 4:27is a a relatively fair system of tax
146. 4:29because, you know, if you're born in
147. 4:31Turkey, you have the option of going
148. 4:32living somewhere else and going where
149. 4:33you're treated best. But if you choose
150. 4:35to live in your own country, you're
151. 4:36going to pay money for the services that
152. 4:37you use as someone who's always lived
153. 4:39there. Whereas, if I go to Turkey, I I'm
154. 4:41not going to use the the, you know, the
155. 4:42public hospitals or any of that. But I
156. 4:45am going to bring money into the
157. 4:46country. I'm going to spend money. I'm
158. 4:47going to go to restaurants. I'm going to
159. 4:48rent out my house. I'm going to, you
160. 4:49know, buy throw pillows, whatever I'm
161. 4:50going to do. So, for 20 years, income
162. 4:53generated outside of the country will
163. 4:55not be subject to Turkish tax. After 20
164. 4:58years, all bets are off, but I'm sure 20
165. 4:59years from now, who knows what's
166. 5:00happening. The package also includes
167. 5:02significant reductions in inheritance
168. 5:04and gift tax for qualifying individuals,
169. 5:06including a flat rate of 1%,
170. 5:09which is against the the current
171. 5:11progressive system that can reach up to
172. 5:1230%. So, 1% tax on inheritance and gift
173. 5:16tax, that's not the zero. There are
174. 5:17countries that are zero, but what you're
175. 5:19basically getting is the ability to live
176. 5:20in a serious country. That's one thing
177. 5:23that clients have asked is, you know,
178. 5:24all these Caribbean islands that offer
179. 5:26citizenship by investment, you know,
180. 5:27that's nice. That's part of the stack of
181. 5:29of second passports. But, you know, am I
182. 5:32going to go and live in some little
183. 5:33island? Well, people have asked, where
184. 5:36can I get a country with more heft? And
185. 5:38the answer was, hey, Turkey. Great
186. 5:39citizenship for the global south. I
187. 5:41think it's one of the best passports, by
188. 5:43the way, that any Westerner can get
189. 5:44because as the West is increasingly at
190. 5:46odds with the global south, or or most
191. 5:48of the global South is tired being
192. 5:49dictated to by the West. If you want the
193. 5:51ability to travel to and be well
194. 5:53accepted in global South countries,
195. 5:55Turkey's got that for the most part. I
196. 5:57mean, look at Turkey's passport, you can
197. 5:59pretty much go everywhere except for the
198. 6:01West. You have easy to go to the US,
199. 6:03Canada, Australia, New Zealand, UK,
200. 6:04Ireland, and the Schengen area.
201. 6:06Everything else, please come right in.
202. 6:08All the small countries that that other
203. 6:10second passports miss like a Paraguay
204. 6:12for example, you can go and you're well
205. 6:14welcome there. I mean, most countries
206. 6:17want a domestic population of 80 million
207. 6:19people to be able to come to their
208. 6:20country. And so this is a country with
209. 6:22heft. It's a country that's increasingly
210. 6:24marketing itself as a place to come. I
211. 6:26think that you know, what we've seen
212. 6:27with Americans going to Mexico City, you
213. 6:29should be seeing in Istanbul. And you
214. 6:31are to some extent seeing in areas like
215. 6:32you know, Nishantashi and and Besiktas
216. 6:34and that. You're seeing people but not
217. 6:36just from the US, people from all over
218. 6:38the world. The issue is always, yeah,
219. 6:40but the taxes are bad. And so people
220. 6:42would live the trifecta lifestyle. Yeah,
221. 6:43but it didn't work for families. What
222. 6:45you're seeing now is kind of the the
223. 6:48perfect storm in a good way where you
224. 6:50can get a citizenship without really
225. 6:52having to jump through any hoops. If you
226. 6:53have a clean background, you file, you
227. 6:55make an investment, you don't even have
228. 6:56to make a donation. You get your money
229. 6:57back in the future and then you can go
230. 7:00and you can live in Turkey for 20 years.
231. 7:01In addition, export-oriented businesses
232. 7:03would benefit from reduced corporate tax
233. 7:05rates. If you're in that business,
234. 7:06that's that's worth something. So if
235. 7:07you're basically going and moving some
236. 7:09kind of export business. They've really
237. 7:10What have I been telling you for a long
238. 7:12time? You know, when I go to Montenegro
239. 7:14or Serbia, I see Turkish brands. I go to
240. 7:17Georgia. Hey, we have this middle
241. 7:18quality. It's not Italian, but it's you
242. 7:20know, it's better than some of the Asian
243. 7:21stuff. Turkish, you know, faucets and
244. 7:24furniture and stuff like that. They've
245. 7:26really gotten this century into a
246. 7:28position where they're really, you know,
247. 7:29trying to push that those exports. And
248. 7:31it's not as much a global export in some
249. 7:33cases as it is regional exports. They're
250. 7:35a regional player. It's a regional power
251. 7:38in a world which I believe increasingly
252. 7:39is is to revolve not around superpowers
253. 7:42but regional powers. So, if you want to
254. 7:44be in the export business, there's going
255. 7:45to be deals for that. Manufacturing
256. 7:47exporters at 9%, other exporters at 14%.
257. 7:50So, if you're in that business, I mean,
258. 7:51that's not maybe a huge benefit, but
259. 7:52they are lowering taxes. So, it shows
260. 7:54you more about their mindset more than
261. 7:55you're going to go and start exporting a
262. 7:57furniture. You get the passport, and
263. 7:59that way you're not relying on residence
264. 8:00permits. I mean, when you can go and
265. 8:02make an investment that can be recouped,
266. 8:03I wonder if you're a successful
267. 8:05entrepreneur or investor, why bother
268. 8:07with residence permits when you can get
269. 8:08something permanent? Unless you have
270. 8:10something where, you know, your Swiss
271. 8:12bank isn't going to like it like it if
272. 8:14you're Turkish or some, you know,
273. 8:15intelligence profile or something like
274. 8:16that. You know, listen, I I suppose
275. 8:20Turkey, you know, it has a bit of an
276. 8:21edge. Obviously, you know, Erdogan has
277. 8:24been vocal against Israel, for example,
278. 8:26so it's not like you're welcome
279. 8:27absolutely everywhere. But, I think by
280. 8:29and large, I mean, Turkey's in NATO.
281. 8:30Turkey is, you know,
282. 8:32pretty much gets along with everybody
283. 8:33that if you want freedom, you want to
284. 8:35get along with. So, the summary is 0%
285. 8:38tax on foreign source income for 20
286. 8:39years. So, again, Uruguay, you know,
287. 8:41historically done that for about 11
288. 8:43years. So, you're you're doubling up a
289. 8:45pretty good comp. 1% of the inheritance
290. 8:47gift tax, and then an optional 2 to 3%
291. 8:50tax one-time if you want to repatriate
292. 8:53certain offshore assets, cash, or gold,
293. 8:55or securities. And so, let's say you
294. 8:57have gold in a vault somewhere in some
295. 8:59free port, you can bring that in. That
296. 9:01is one thing people don't understand is,
297. 9:02you know, there often is some kind of
298. 9:04tax on bringing in stuff like that. So,
299. 9:07they're basically going to say, "Hey,
300. 9:07it's a repatriation thing." Same thing
301. 9:09Trump did in 2017, 2 to 3% one-time tax
302. 9:13on that. How do you become a tax
303. 9:14resident in Turkey? Well, there's two
304. 9:15ways you can do it. Number one is you
305. 9:17simply pass the days test, which is 183
306. 9:19days. If you spend that time in Turkey,
307. 9:21you'll be a tax resident, and you just
308. 9:22you just file for the program. Or, you
309. 9:24can establish tax domicile. This is the
310. 9:26more, you know, kind of complex way
311. 9:28where there's different factors you've
312. 9:29got to consider, but it's basically
313. 9:31where's your permanent home, where are
314. 9:32your family ties, where's your center of
315. 9:33vital interest, where are your social
316. 9:34connections. This is interesting because
317. 9:37this is often the kind of stuff that
318. 9:38you're trying to avoid when either
319. 9:40leaving your home country like you live
320. 9:42in Canada or Australia and it's like
321. 9:44yeah family ties right? You can't just
322. 9:46like I'm going to move to like you know
323. 9:48somewhere tax friendly but my wife and
324. 9:50kids are going to stay it doesn't really
325. 9:51work that well. You're often looking to
326. 9:53avoid those things in a country that's
327. 9:54high tax or let's say somebody moves to
328. 9:56Mexico for example and they're like
329. 9:58they've crazy taxes in Mexico but if I
330. 10:00can thread the needle of not making it
331. 10:02my permanent home or owning real estate
332. 10:03or family ties or Okay maybe I can stay
333. 10:06out of the tax net for a while. Here the
334. 10:08deal is if you don't want to spend the
335. 10:09full 6 months you need to establish
336. 10:11those things in Turkey in order to get
337. 10:13the 20 year incentive and basically
338. 10:15you could in some cases lower your taxes
339. 10:17to like zero in this case or very very
340. 10:20low. And so those are the two ways that
341. 10:22you can actually move in and then again
342. 10:24you compare that with citizenship
343. 10:25$400,000 in real estate you can sell the
344. 10:27property after 3 years because you could
345. 10:28have bought property in some areas for
346. 10:29$1,000 a meter I paid more than that but
347. 10:32in dollar terms I think my property is
348. 10:33about double at this point. You could
349. 10:35have made more money in other assets if
350. 10:37you're someone who wants to get a
351. 10:38citizenship buying something that goes
352. 10:40up in value I don't know to what extent
353. 10:42property in Turkey is going to go up in
354. 10:43value now. I still think it's pretty
355. 10:45affordable at a time when that's
356. 10:46valuable. I still think it's
357. 10:48geopolitical neutrality will be
358. 10:50important particularly with the Gulf and
359. 10:52you know what's happening there I think
360. 10:54you'll see more money from Russians for
361. 10:56example which is what you know helped
362. 10:58prices go up in the first place like I
363. 10:59say in the 2022-2023.
364. 11:02You have the potential for a profitable
365. 11:03investment or at least break even by
366. 11:05selling your property or you can just
367. 11:07keep that property make the place that
368. 11:08you live and you know one thing I I tell
369. 11:11people is don't always get the cheapest
370. 11:13property possible. If if you have a
371. 11:14family and $400,000 doesn't get what get
372. 11:17you what you need buy a million dollar
373. 11:19property if that's what you want to live
374. 11:20in that will equally qualify for
375. 11:22citizenship by investment. You're
376. 11:23allowed to spend more than 400,000 and
377. 11:25so if it's a place that you want to live
378. 11:26this is what I've been telling you for
379. 11:28for some time have places that you want
380. 11:30to go because they're all options.
381. 11:32They're all lottery tickets of a sort in
382. 11:35that, you know, now that Turkey has this
383. 11:37deal, you want a house that you'd
384. 11:38actually go and live in. It It's not as
385. 11:40international as maybe London. They like
386. 11:42eating their own food. You know, you go
387. 11:44to Istanbul, but they got great food.
388. 11:46You know, English is not as widely
389. 11:47spoken, but there's parts of Istanbul
390. 11:49and Bodrum and all that where you can or
391. 11:51whatever language you may speak might be
392. 11:52spoken in one of those places. It is not
393. 11:54the most international place in the
394. 11:56world, but it is a crossroads of the
395. 11:57world and it is a place where I think
396. 12:00you know, you could feel welcome and
397. 12:01there's different vibes, you know, so
398. 12:03Istanbul, not the capital but the
399. 12:04primary city, big city, lots to do.
400. 12:07Ankara, not as exciting, but other
401. 12:09smaller towns. There's agricultural
402. 12:11property which you can now buy if you're
403. 12:12a citizen. So, you could open some kind
404. 12:14of agricultural land. I've I've talked
405. 12:15about, you know, buying agricultural
406. 12:17land in Turkey. It's on my list places
407. 12:19that I'm looking for for great deals.
408. 12:21You can also go to the seaside. And so,
409. 12:23there's everything from affordable
410. 12:24seaside to really high-end seaside. I
411. 12:26mean, the Edition Hotel in Bodrum is
412. 12:28like $2,000 a night plus in the summer.
413. 12:30So, there is some really high-class
414. 12:32stuff in Turkey. I see this as a stack.
415. 12:34Citizenship with real estate for most
416. 12:36people. You could either rent it out if
417. 12:38you don't want to live there and you
418. 12:39keep the option of saying, "Okay, this
419. 12:40this tax deal might be around for a
420. 12:42little while and I'll just get the
421. 12:43rental income and I'll sell the property
422. 12:44later at a profit, hopefully."
423. 12:46Or I'm going to buy a property and use
424. 12:48it either as a plan A or I'm going to
425. 12:50move there immediately and get this tax
426. 12:51deal or as a plan B where I'm going to
427. 12:52start visiting and getting accustomed to
428. 12:53if I'm happy and make it the place that
429. 12:54I want to move. I think with some people
430. 12:56being afraid to go to the Gulf right
431. 12:57now. Plenty of people aren't, by the
432. 12:58way. There's plenty of people who are
433. 12:59going back to Dubai and everywhere else.
434. 13:01But if you thought you were looking at
435. 13:02the Gulf
436. 13:04for its tax benefits and lifestyle, I
437. 13:05think Turkey offers
438. 13:07more culture, equally good, you know,
439. 13:09connectivity to wherever you want to go
440. 13:11in the world, and now it has the tax
441. 13:12deal. But on top of that, you have the
442. 13:14permanent status. Now, obviously, you
443. 13:15know, you can get a UAE golden visa for
444. 13:1710 years. I don't see those options
445. 13:18going away anytime soon. They want
446. 13:20people to be there. But you still have
447. 13:22permanence to where you're living. And I
448. 13:23see this as something that's really
449. 13:25really uh interesting. I also think it's
450. 13:27a, by the way, a great thing if you're
451. 13:28building a passport stack, you could
452. 13:29I've always said pair Turkey with some
453. 13:31kind of Caribbean citizenship and maybe
454. 13:32now you add a third citizenship. This is
455. 13:34for someone who wants a merging Europe.
456. 13:36I'm in that category. You know, I just
457. 13:37see as much as I as I wish the West were
458. 13:40in better shape, it's not. It's getting
459. 13:41worse. I don't deal in what I wish was,
460. 13:43I deal in what is. And so if you want a
461. 13:45merging Europe, I mean Turkey's building
462. 13:47its own Tuscany. It has its own so many
463. 13:49places in Europe. If you want certainty
464. 13:51around your immigration status in a
465. 13:52low-tax country, some people feel
466. 13:54uncomfortable like hey, what if they
467. 13:55kick me out one day? What if my
468. 13:56residence permit doesn't get renewed?
469. 13:57What if they don't want me to stay
470. 13:58long-term? Well, if you're a citizen,
471. 14:00you're in. People who want access to
472. 14:01global south can benefit from this. You
473. 14:03know, I really just think that
474. 14:04Westerners should take a serious look at
475. 14:06this. I'm not saying you have to sign up
476. 14:07for the tax deal right away, but putting
477. 14:08yourself in a position to sign up for
478. 14:09the tax deal, not only having a passport
479. 14:11that gets you the immigration privilege
480. 14:13and a sense of permanence, but also
481. 14:14getting you a place where you're going
482. 14:15to live. You know, you're not making a
483. 14:17donation. You can buy a home. Buy the
484. 14:19home that you would actually want to
485. 14:20live in. And then you have the option to
486. 14:22rent it out, keep it empty and spend
487. 14:23part-time, or move there full-time and
488. 14:25take advantage of this tax deal. There
489. 14:27will also be some flexibility, it seems
490. 14:29like, about people who are somewhat
491. 14:30nomadic using this as a tax base, having
492. 14:33a home there, not to spend one day a
493. 14:34year, but if you move a lot of your
494. 14:36stuff there, this could be a place where
495. 14:38it could be a good nomadic base. So
496. 14:40rather than just going and making a
497. 14:41donation somewhere every year in a
498. 14:42Caribbean country to get tax residence
499. 14:44as a nomad, this could be interesting
500. 14:46for someone who wants to be a bit more
501. 14:48mobile as well. So, if you'd like help
502. 14:50in deciding all your options for both
503. 14:52passports and tax residences, you go to
504. 14:55nomadcapitalist.com and the team will be
505. 14:57happy to talk to you.