I just recently moved from the US, where my own company is based, to France, where my wife is from. I am still learning about the complications, but I can tell you of some of the challenges I've already dealt with:
Currency exchange: rates fluctuate on a regular basis and that makes budgeting a challenge. Sometimes you win and sometimes you lose depending on how the currencies move.
Insurance: health insurance by a provider that is outside your country of residence is going to result in some hurdles. You'll have to pay close attention to what your providers rules are for coverage outside of your country.
Visas: as long as you only stay long enough to stay qualified as a visitor then visas are probably going to be a non-issue. Once you exceed the amount of time allowed as a visitor then you have to deal with that countries rules for visas and they differ from country to country.
Cash, check and credit: acceptance of credit cards and checks in foreign countries will very. Banks tend to charge fees for withdrawing money in other countries so be prepared to eat those fees. Often it is easiest to just use cash, so take enough to get started and have a plan on how to get more while you're there, i.e. figure out where the cash machines are, if they accept your cards and what the fees are.
Tax: IANAL nor am I an accountant or tax specialist and I am not sure how it works in the UK. Having said that, the US is a bit odd in that they tax their citizens worldwide, so no matter where I live I will have to pay US taxes. If I am a resident in another country then I'll likely have to pay taxes there as well and then try to get a credit in the US for taxes paid overseas. It's still early for me on this one so I'm not sure exactly how taxes will pay out.
I hope this helps. Basically my suggestion is retain your UK residence and take extended "vacations" in countries you want to visit - it'll be a lot less of a hassle then trying to immigrate.
While the US will tax you as long as you are a citizen, you can take a credit for any foreign taxes that you already paid on the same income, which should prevent double taxing unless you happen to be in a very low tax country. If you had some kind of business setup to collect the income in the foreign country you could probably keep a lot of profits in the business and not claim much income for yourself, but it is something you'd probably want to talk about with an accountant and is probably different in the UK (I love UK tax forms by the way, so simple compared to ours!)
As for actual experience, I had a great time in Buenos Aires. You get 90 days visitor visa with a US passport and there is a good size population of ex-pats that take a weekend trip to Uruguay when they get close to 90 days, turn around and get another 90. A bunch of them make some cash teaching English and keep it all under the table, which I don't really recommend (I mean they still get you on VAT, but you don't want to mess with any laws in a foreign country if you can help it), but it isn't a bad place to be.
I hope this helps. Basically my suggestion is retain your UK residence and take extended "vacations" in countries you want to visit - it'll be a lot less of a hassle then trying to immigrate.
You will want to be very, very careful with that. I'm neither a lawyer nor an accountant, but the tax rules for US citizens are very different from pretty much everyone else. Tax authorities will generally not be happy if you try to pay no tax locally and send it all home. The rule is typically that you pay tax where you spend the most number of days of that tax year. No idea what happens when tax years for natural persons don't overlap (UK has April-April, many countries have calendar years) - in my case I didn't earn any money in the interim so it wasn't an issue.
Within the EU, you'll probably need to register your new residence as the, or one of the company's offices where its business is conducted. You don't need to register it as a business of that country, though, unless you're a sole trader. Any salary or dividends you pay yourself will usually be subject to local taxes, social security, health insurance and possibly other fees. Your accountant(s) will need to tell you where the business pays tax on its profits.
You may also require a permit for operating a business in that country. I did (UK citizen, located in Austria), and although software development is usually not regulated in the way the medical, legal and other professions are, I did require a certificate of any record on the UK Police National Computer, or rather lack of any record. This took almost 2 months and cost 10 pounds. I managed to sweet-talk the bureaucrat in Austria into not requiring an official translation, but the rule is that you do - this will add extra cost and time.
You may also require a residence permit, even within the EU. That too tends to be a mere formality, but usually they want proof of earning enough to sustain yourself. Not a problem if you're a UK limited company, you'll be used to your income being a matter of public record anyway. I didn't need this in Vienna, but a German friend in another State (Lower Austria) got an unpleasant visit from the immigration police.
UK->EU specific, but: you can forget your E111 for anything but emergencies. You'll probably be forced to get local health insurance (in Austria they write to you and bill you as soon as you register the business) anyway.
Hopefully, you'll encounter less hassle - Austria is exceptionally hostile towards the self employed, and taxes are insane.
For almost every set of countries in the 'matrix of possibilities' there is a tax treaty in place these days, your local tax office should be able to tell you quite a bit about the situation once you've settled on a country of your choice.
"You will want to be very, very careful with that."
You're right. You probably want to find a good tax attorney or accountant that is well-versed in the tax laws and treaties of any and all countries you plan on spending time in, especially if you plan on doing business locally.
My understanding is that under EU treaties, EU countries are obliged to treat companies formed in other countries the same as local companies, i.e. the government can't discriminate against you for having a company registered somewhere else.
Indeed many EU startups are officially headquartered in the UK even if they're based elsewhere in Europe for the favourable legal and tax implications.
This won't affect you if it's literally just a short vacation or even a business trip[1]. However, even if primary residence is only de-facto (generally, more than half a year spent at that location) you will probably be on the hook for tax. So beware of that 27-week holiday or business trip.
[1] exception: if you actually take payment in that location, e.g. selling stuff at a trade show, you need to register the business at the location you're visiting for that time as you are now operating from that country for VAT purposes. Ugh! VAT is a whole new can of worms anyway.
Ask an accountant. I suspect you'll be more or less free to choose your primary residence as long as you actually maintain an address there. But seriously, with any of these things it's best to talk to someone who knows the ins and outs of the tax laws of the countries you're visiting.
I would totally agree with the "extended" vacations it's going to give you less grief then trying to understand tax law in every country. Plus proving to your home country your really living abroad.
Part of understanding may also be understanding what you can 'get away with'. That sounds bad, but may well be a fact of life in some places, especially if you're not really invested in staying there for the long haul.
So if your a citizen of the UK and your earning income online to your UK business what does concern does say Guatemala have on your money if your living there on a tourist visa. No money is being created locally. You going to start a new business in every port you land on? Do you pay taxes to the local government when you go on vacation?
There is a difference between a vacation or business trip and residence. Many countries will treat you as resident if you stay there for more than half of the tax year, regardless of whether you say it's a holiday. It's quite possible that some don't, but you'd better know for sure.
The optimal solution in that case is to have your UK company earn the money and pay you a stipend on which you pay local taxes if UK taxes for corporations are more favorable than in the place where you live.
But really, you should consult an accountant or tax advisor for hard information after you have decided on a country to go to and for how long you intend to be there.
As a rule, < 3 months -> no problem, > 6 months = residence, in between, gray area, leaning towards 'extended holiday'.
Comments
I just recently moved from the US, where my own company is based, to France, where my wife is from. I am still learning about the complications, but I can tell you of some of the challenges I've already dealt with:
Currency exchange: rates fluctuate on a regular basis and that makes budgeting a challenge. Sometimes you win and sometimes you lose depending on how the currencies move.
Insurance: health insurance by a provider that is outside your country of residence is going to result in some hurdles. You'll have to pay close attention to what your providers rules are for coverage outside of your country.
Visas: as long as you only stay long enough to stay qualified as a visitor then visas are probably going to be a non-issue. Once you exceed the amount of time allowed as a visitor then you have to deal with that countries rules for visas and they differ from country to country.
Cash, check and credit: acceptance of credit cards and checks in foreign countries will very. Banks tend to charge fees for withdrawing money in other countries so be prepared to eat those fees. Often it is easiest to just use cash, so take enough to get started and have a plan on how to get more while you're there, i.e. figure out where the cash machines are, if they accept your cards and what the fees are.
Tax: IANAL nor am I an accountant or tax specialist and I am not sure how it works in the UK. Having said that, the US is a bit odd in that they tax their citizens worldwide, so no matter where I live I will have to pay US taxes. If I am a resident in another country then I'll likely have to pay taxes there as well and then try to get a credit in the US for taxes paid overseas. It's still early for me on this one so I'm not sure exactly how taxes will pay out.
I hope this helps. Basically my suggestion is retain your UK residence and take extended "vacations" in countries you want to visit - it'll be a lot less of a hassle then trying to immigrate.
While the US will tax you as long as you are a citizen, you can take a credit for any foreign taxes that you already paid on the same income, which should prevent double taxing unless you happen to be in a very low tax country. If you had some kind of business setup to collect the income in the foreign country you could probably keep a lot of profits in the business and not claim much income for yourself, but it is something you'd probably want to talk about with an accountant and is probably different in the UK (I love UK tax forms by the way, so simple compared to ours!)
As for actual experience, I had a great time in Buenos Aires. You get 90 days visitor visa with a US passport and there is a good size population of ex-pats that take a weekend trip to Uruguay when they get close to 90 days, turn around and get another 90. A bunch of them make some cash teaching English and keep it all under the table, which I don't really recommend (I mean they still get you on VAT, but you don't want to mess with any laws in a foreign country if you can help it), but it isn't a bad place to be.
I hope this helps. Basically my suggestion is retain your UK residence and take extended "vacations" in countries you want to visit - it'll be a lot less of a hassle then trying to immigrate.
You will want to be very, very careful with that. I'm neither a lawyer nor an accountant, but the tax rules for US citizens are very different from pretty much everyone else. Tax authorities will generally not be happy if you try to pay no tax locally and send it all home. The rule is typically that you pay tax where you spend the most number of days of that tax year. No idea what happens when tax years for natural persons don't overlap (UK has April-April, many countries have calendar years) - in my case I didn't earn any money in the interim so it wasn't an issue.
Within the EU, you'll probably need to register your new residence as the, or one of the company's offices where its business is conducted. You don't need to register it as a business of that country, though, unless you're a sole trader. Any salary or dividends you pay yourself will usually be subject to local taxes, social security, health insurance and possibly other fees. Your accountant(s) will need to tell you where the business pays tax on its profits.
You may also require a permit for operating a business in that country. I did (UK citizen, located in Austria), and although software development is usually not regulated in the way the medical, legal and other professions are, I did require a certificate of any record on the UK Police National Computer, or rather lack of any record. This took almost 2 months and cost 10 pounds. I managed to sweet-talk the bureaucrat in Austria into not requiring an official translation, but the rule is that you do - this will add extra cost and time.
You may also require a residence permit, even within the EU. That too tends to be a mere formality, but usually they want proof of earning enough to sustain yourself. Not a problem if you're a UK limited company, you'll be used to your income being a matter of public record anyway. I didn't need this in Vienna, but a German friend in another State (Lower Austria) got an unpleasant visit from the immigration police.
UK->EU specific, but: you can forget your E111 for anything but emergencies. You'll probably be forced to get local health insurance (in Austria they write to you and bill you as soon as you register the business) anyway.
Hopefully, you'll encounter less hassle - Austria is exceptionally hostile towards the self employed, and taxes are insane.
For almost every set of countries in the 'matrix of possibilities' there is a tax treaty in place these days, your local tax office should be able to tell you quite a bit about the situation once you've settled on a country of your choice.
"You will want to be very, very careful with that."
You're right. You probably want to find a good tax attorney or accountant that is well-versed in the tax laws and treaties of any and all countries you plan on spending time in, especially if you plan on doing business locally.
My understanding is that under EU treaties, EU countries are obliged to treat companies formed in other countries the same as local companies, i.e. the government can't discriminate against you for having a company registered somewhere else.
Indeed many EU startups are officially headquartered in the UK even if they're based elsewhere in Europe for the favourable legal and tax implications.
[deleted]
This won't affect you if it's literally just a short vacation or even a business trip[1]. However, even if primary residence is only de-facto (generally, more than half a year spent at that location) you will probably be on the hook for tax. So beware of that 27-week holiday or business trip.
[1] exception: if you actually take payment in that location, e.g. selling stuff at a trade show, you need to register the business at the location you're visiting for that time as you are now operating from that country for VAT purposes. Ugh! VAT is a whole new can of worms anyway.
So what's the situation if you spend 3 months in 4 different countries each?
Ask an accountant. I suspect you'll be more or less free to choose your primary residence as long as you actually maintain an address there. But seriously, with any of these things it's best to talk to someone who knows the ins and outs of the tax laws of the countries you're visiting.
I would totally agree with the "extended" vacations it's going to give you less grief then trying to understand tax law in every country. Plus proving to your home country your really living abroad.
Sorry, refusing to understand local tax law, or refusing to pay someone who understands it is terrible advice. Ignorance is not a valid defense.
Part of understanding may also be understanding what you can 'get away with'. That sounds bad, but may well be a fact of life in some places, especially if you're not really invested in staying there for the long haul.
Yes, absolutely. This may be as simple as periodically leaving the country for short trips, but you have to know.
So if your a citizen of the UK and your earning income online to your UK business what does concern does say Guatemala have on your money if your living there on a tourist visa. No money is being created locally. You going to start a new business in every port you land on? Do you pay taxes to the local government when you go on vacation?
There is a difference between a vacation or business trip and residence. Many countries will treat you as resident if you stay there for more than half of the tax year, regardless of whether you say it's a holiday. It's quite possible that some don't, but you'd better know for sure.
The optimal solution in that case is to have your UK company earn the money and pay you a stipend on which you pay local taxes if UK taxes for corporations are more favorable than in the place where you live.
But really, you should consult an accountant or tax advisor for hard information after you have decided on a country to go to and for how long you intend to be there.
As a rule, < 3 months -> no problem, > 6 months = residence, in between, gray area, leaning towards 'extended holiday'.