Plan B through Flag Theory

Thought Leadership: Anatoliy Lyetayev, Founder & CEO, Migronis Citizenship

Having a plan B is always a good idea, but it has become a necessity in 2020. This year has shown that the world is more globalised than ever and what affects one country affects all others. The coronavirus pandemic has put into perspective how the newly connected world governments deal with a crisis through tighter movement controls, higher taxes to generate relief packages and medical mandates. Never before in history has it been more important to have a plan B in the form of a Residency and Citizenship by Investment (RCBI) portfolio.

Being tied to only one country is a risk that many of us do not account for when planning for future uncertainties, but it is high time that we do. According to Flag Theory, which is becoming more like a flag roadmap, we should take advantage of what each country has to offer to build a full plan B to protect our freedom and wealth. This year especially, high-net-worth individuals are considering global migration for wealth management and mobility purposes to combat the new tax laws that are sure to come, and the increase in money printing that threatens economies even further.

FLAG ROADMAP

Flag Theory is a philosophy that has entered into the realm of a practical necessity for individuals to earn income, live, invest and own real estate in different countries to protect themselves from economic and political turmoil. Freedom of movement, conducting business, and financial mobility are the main points that need to be considered and tailored to each family based on their unique needs. An individual should split the following five flags between five countries to minimise government overreach based not only on laws surrounding rights and social norms but also on economic incentives:

1. Citizenship – security and mobility

2. Residency – wealth management

3. Business – attractive business incentives

4. Assets - low passive income and capital gains tax

5. Cost of living – commerce supportive tax structures

ANTIGUA & BARBUDA

Let’s look at Antigua & Barbuda as an example. Antigua has the second most powerful passport in the Caribbean. It offers citizens visa-free travel to over 150 countries including the UK and the Schengen area as well as an opportunity to get a US visa. This easily covers the freedom of movement aspect of Flag Theory. The island requires only a five-day stay within the first five years for a new citizen, which is a great option for those who want to plant their residence flag elsewhere.

Antigua is also the ideal place to implement your wealth management plan. There is no world income, capital gains, or inheritance tax, making it a great choice to hold assets like real estate or even move there with the whole family. A real estate investment for the CBI programme starts at just US$200,000.

Not only does an RCBI portfolio protect against financial loss and tax burden, but it also gives a physical place your family can live during hard times.

As the world changes, so do our risk management strategies. An evolution of Flag Theory includes two more flags that should be mentioned briefly - digital security and digital assets, namely cryptocurrency. Even abroad, identity, intellectual property, and intangible assets need to be protected because the internet has no borders. As for cryptocurrency, it is a hedge against the inflation crisis that is looming due to an unstable reserve currency accelerated by this year’s world events.

PLANNING AHEAD

Just one year ago, having a second citizenship was a great hedge against a crisis, but the pandemic has highlighted the need for more than one option. Not only does an RCBI portfolio protect against financial loss and tax burden, but it also gives a physical place your family can live during hard times. Who wouldn’t want to spend a three-month lockdown on a Caribbean island?

For those who already had and implemented their plan B this year, the losses have been minimal, and most importantly, they had a choice of where to weather the crisis. Freedom is all about choice after all. Those who have not implemented any diversification of States into their life planning should seek a reputable RBCI consultant who can help with the details, down to calculating the numbers. All the options should be meticulously inspected before making any decisions. It is not a question of if, but when another crisis occurs, and preparedness is the best way to protect yourself and even profit from it.

Once established, this system will not only grant you peace of mind but will set you up for true financial freedom.