Nomad Nation: Thriving as a Location-Independent Entrepreneur with Bobby Casey

0:01Boom! Shake the room, Fire Nation. JLD here and welcome to Entrepreneurs on Fire. Brought to you by the HubSpot. Podcast Network, the audio destination for business professionals with great shows like Created with John Ushai. Today, we'll be breaking down Nomad Nation, how to thrive as a location independent entrepreneur. And to drop these value bonds, I brought to Bobby Casey in the EU Fire Studios. Bobby is a seasoned entrepreneur and international tax expert specializing in company structure, residency, and tax planning for location independent entrepreneurs. He runs businessanywhere.io and globalwealthprotection.com.

0:39In today's foundation, we'll talk about the rise of the digital nomad, tax optimization, the best practices for setting up and maintaining a business, navigating banking and payment processing options, and so much more. And a big thank you for sponsoring today's episode goes to Bobby and our sponsors. The Next Wave, your chief AI officer hosted by Matt Wolf and Nathan Lanz is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Matt and Nathan are leading AI creators in your guiding light in the AI and technology frontier. AI technology is transforming the way we do business and the media landscape is fragmented.

1:16The Next Wave strives to be the leading podcast on AI technology and how you can apply it to growing your business. Listen to The Next Wave wherever you get your podcasts. Bobby, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with? Hey, John. First of all, thanks for having me. Looking forward to this. I'm pretty excited to be back on the show with you. And something that I think is hugely critical to success that I'm not sure a lot of people definitely disagree with it, but through people's actions, I think their actions disagree with it, is people, especially when they're getting into business for themselves, I think they're too harshly focused or directly focused on chasing money.

2:10And in reality, they should be chasing the value and playing business like a game and focusing on controlling the things they can control instead of just chasing the money. because too many people get focused. I got to make that dollar. I got to make that money. I got to hit a million dollar business. I got to hit my first$10 ,000 a month. And in reality, all you really should be focused on is what can I do to improve the quality of life for my clients with better products and services? And I think not enough people focus on that. So maybe they fundamentally understand that, but through their actions, they don't really focus on that.

2:50They just focus on chasing the money. Fire Nation, we're talking about Nomad Nation, thriving as a location-independent entrepreneur. And I want to talk, Bobby, about the rise, the rise of the digital nomad. Tell us more. To be honest, I think it all started back around, if I'm hitting my date correctly, I think Skype started around 2004 or 2005. and I think the rise of the digital nomad kind of started about then, although it was much less pronounced as it is now. And I remember traveling a lot internationally back in the early mid-2000s coming home with like$1 ,000 cell phone bills. And it just wasn't viable, you know, especially as a small business owner to have a$1 ,000 cell phone bill every month.

3:39But Skype came along and made it viable for people to have communications with team members and clients and everything. And in my opinion, Skype was kind of the catalyst that kicked it off. And now we have all the other sharing technologies. But I am staying true to Skype, Bobby. We're talking on Skype right now. So many people say, John, I can't believe you're still on Skype. Why can't we get on Zoom or Riverside or StreamYard? I'm like, Skype is where it's at and I'm not leaving. You know, I don't blame you. And I think Skype has actually improved over the past couple of years. It's gotten much better.

4:18Skype did have a lull there for a few years, I think, where the Zooms of the world kind of took over. But I do think Skype is a pretty viable alternative now. Sorry, this is not a Skype advertisement, but you're welcome, Microsoft, I guess. But I think Skype was kind of the catalyst. And then what really set this off, as we all well know, what really set this off was during the COVID times when even big companies, like I remember reading in the news when General Motors sent 50 ,000 people home, like office workers, to go work from home. And the COVID really either intentionally or unintentionally, whatever you want to call it, but kind of escalated this or exponentially where everyone said, hey, I can work from home now.

5:10And companies said, hey, we don't really need all this office space anymore. It's cheaper and easier. People are happier. Like people can have lunch with their kids or have a higher quality of life without an hour and a half commute. And that just kind of escalated the next level and people started saying, if I can work from home, maybe my home can be somewhere else. Maybe I can go live in Colorado and go skiing all winter and then go live in Mexico and go live on the beach. And it really took off. And I don't see this as a trend that can be unwound. As they say, you can't unring this bell. I will say it's out of the box, Fire Nation.

5:58It's not going back in. But one thing we can all agree on are that taxes are the worst. I mean, that's why I moved to Puerto Rico eight years ago and I'll never leave. So let's talk about tax optimization strategies, specifically tips for minimizing the tax liabilities as a location independent entrepreneur. were. This is where it starts to get complicated for the location independent or nomadic set is when you are living in that home base, you know, I'm not picking on Kansas, but let's say you've got that, you live in Kansas, you got the white picket fence lifestyle, your business is in Kansas and everything is location dependent.

6:43Things are easy, right? Like you've got the home there, the business there, the office there, all your employees are there. Things are relatively easy because your social and governmental and banking systems are all kind of built around that model. But now with the, let's call it the rise of the nomad, people are like, I don't really need to live in Kansas anymore. And so that's where these problems start getting presented. And I think places like Puerto Rico, Puerto Rico is good for Americans if you like being in Puerto Rico. If you don't like Puerto Rico, there are other options. But you seem to like it.

7:31And I have a lot of friends living down there that seem to love it down there as well. I had two more friends just move down there last month. They love it. You can register your company down there, take advantage of Act 60, pay yourself. You get, I guess, what is it? It's a 90 % tax credit, so your corporate tax rate is - 96 % tax credit. So you're paying a flat 4 % tax. You pay zero federal, zero state, and best part, 0 % capital gains tax. And also you can pay, as a resident, you pay yourself a dividend. Oh, yeah. Your Puerto Rican company, which is tax-free to you personally. Tax-free. Probably what you're doing, I'm guessing, you probably pay yourself some nominal salary from the company, which you do pay tax on.

8:18But then your dividends all come to you tax-free. So your marginal tax rate as an individual is also probably low single digits, I'm guessing. Yes. If you enjoy that lifestyle and living in Puerto Rico, I think it's an excellent option. But Puerto Rico is the U.S., so it does make it easier for Americans. It's not really a great option for non-U.S. people. I mean, they can take advantage of it, but it's not ideal unless, again, that's where you want to spend your time. there are lots of different options out there depending on your nationality but that's where it does start to get more complicated so you are let's say a business owner and you're an american and you're living in you know let's say well let's say you're completely nomadic you live in mexico a couple of months you go to argentina for a couple of months maybe you're in thailand six months.

9:18And it begins to be problematic. You're like, well, do I just register my company and pay tax in the US? Do I need to do something if I'm going to be in Thailand for six months? You have immigration issues to deal with, dealing with what type of visa should I get? Am I taxable in this visa? Do I become a tax resident if I stay a certain number of days or do certain things in that country. And so it gets super complicated once you take on this nomadic life. And I tell people all the time, I mean, I'm doing tax and residency and company structure consultations weekly, and I tell people, once you choose to exit your home country, things get a little messy.

10:05And it takes, you have to choose. Are you willing to deal with that messiness? If not, then you need to go back to that white picket fence lifestyle in Kansas. But if you're going to actively choose that nomadic lifestyle, you've got to deal with a little bit of messiness. So ideally, if you're an American, and I assume, John, the majority of your audience is Americans, right? Yes. Yeah. So as an American, you do have the advantage. There are a few loopholes you can take advantage of. The big one that most nomadic entrepreneurs take advantage of is the foreign earned income exclusion. This year, you can earn about$126 ,000 tax-free from the U.S.

10:47perspective. And now how many days are you not allowed to be in the United States for that to be in effect? That's a good question because there's actually – let me finish that thought real quick. You get$126 ,000. You also get a housing allowance depending on the country where you're spending time. And that can rack up too. That can be another$30 ,000,$40 ,000 actually that you can pay yourself as a housing allowance living in a foreign country. So you can actually get$150 ,000-ish,$160 ,000-ish tax-free depending on where you're living. But to your point, how many days? So you have actually, there's two ways to qualify for that foreign earned income exclusion.

11:28If anybody wants to look it up, you can look up IRS form 2555 and you put an I on the end. That's the info sheet for that. You can just Google search IRS 2555I and you can read about it. But there's two ways to qualify. One way is what you're talking about with a maximum number of days in the U.S. That's called the physical presence test. And you're only allowed to be in the U.S. up to 35 days, including transit days. So some people, you need to be cautious of that. If you're flying, if you leave like on a Monday and arrive on a Tuesday into the U.S., you're considered in the U.S. from the moment you get on the plane.

12:06Totally get it. So if you're on the edge, you've got to be super careful with that one if you're doing the physical presence test. That one is the one that's relatively simple to qualify for. You just stay out of the country 330 days. One good thing about that one is it is prorated. So if you decide to, let's say this year, you're like, you know what? I listened to the show with Bobby and John and I'm going to take off on July 1st and, you know, go travel the world. The good thing is, is if you, you prorate it. So if you're gone from, what did I say? July, right? July 1st through June 30th of 25, if you're gone 330 days, you can actually prorate the second half of 2024.

12:52So you still get a tax advantage, even if you're prorating just for a partial year. Yeah, so Fire Nation, in that case, you kind of just divide everything in half. You know, approximately, of course, you'll do the math, but you don't have to wait till January 1st for this to come into effect. And I'm going to have Bobby give us the other thing that he was about to mention when we get back from thanking our sponsors. Being a small business owner comes with a lot of challenges, especially now. It seems like everyone is working with smaller budgets, shorter timelines, and sky-high expectations, and that can make growing a business feel pretty painful.

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14:03And you've got HubSpot's all-on-one customer platform. Get ready for growth without the growing pains. Visit HubSpot.com slash Spotlight to see all the updates. Bobby, we're back and we get and understand the whole day thing. What's the other exception to that? So the other one, which I think is a bit more interesting because it gives you a lot more flexibility, is what they call the bona fide residency test. And in order to qualify for the bona fide residency test, you need to go get residency in another country. You need to actually go there and immigrate as a resident in the country. You got either some type of residence visa or a residence permit in that other country.

14:50And if you do that and you have kind of disconnected yourself from the U.S. as your home base, and the main factor there is you can't have a primary home in the U.S. if you're going to qualify under this bona fide residency test. You can own property. Don't get me wrong. If you still own a house in the U.S., you can still own that house, but it ceases to be considered your primary home. And so maybe you lose some tax advantages as your primary residence with that, or maybe you just rent it out or call it a vacation property or something like that. So you can still own property, but it can't be deemed your primary home.

15:28And then you need to have what they call your center of vital interest in the other country. And that is just a very subjective test. Like, where do you go to the doctor? All right, Bobby, I think we've gone enough into the weeds on this topic because I want to talk about a couple other things as well. And of course, Fire Nation, you can follow Bobby to get more information on all this stuff. One thing I know that I struggle with when I moved to Puerto Rico is that I had to close down my bank. I had to get a new payment processor. I mean, even though it was in American territory, I wasn't able to have the banking and payment processing options I did in San Diego.

16:05So talk to us about navigating both the banking and payment processing options. I'm going to take two seconds to finish that last thought. Basically, the bona fide residency test, the big benefit is you have a lot more flexibility on the amount of time you can be in the U.S. You don't have a 30 day, 35 day limit. Actually, you can be in the U.S. about four or five months a year without becoming a tax resident if you become a bona fide resident in the other country. And that's your center. Okay, two seconds are up. Go. Yep. So payment processing. So payment processing, company structure, this is always a big factor to consider.

16:41And what I tell most people, keep your company registered in the U.S. Keep it – the easy solution, as they say, what was the old Staples commercial, the easy button answer there is just keep it as a U.S. LLC. and most of our clients, we do Wyoming LLCs, but you can do any state. It doesn't make much of a difference. But keep a Wyoming LLC. You've got U.S. banking, you've got U.S. payment processing, you can have your Stripe account or whatever, PayPal merchant processing, no problem. But if you want to optimize that for taxes, usually what you want to do, if you're doing the bonafide residency is to have an offshore holding company in place so that your income flows up through to that offshore hold co.

17:30Because then what you want to do is pay yourself a salary from the non-U.S. company. And that also allows you to avoid your self-employment tax, which is about 15 % up to $147 ,000. So that's a big tax saver for most people if they're nomadic. But it works really well if you're living abroad. And effectively, you just pay yourself your salary from your offshore holding company. You eliminate the self-employment tax. And so a lot of people do struggle with that. In your case, you moved to Puerto Rico. Registering a Puerto Rican company was a requirement for your situation under Act 60. And so, yeah, you had to jump through the extra hoops to register the company, new bank accounts, new payment processing.

18:17But if you are that American nomad from Kansas that wants to go travel around the world. Just leave your company in the US. Don't, like, as a friend of mine used to say, no need to make this nuclear mousetrap. Make it simple. You just want to add that offshore holding company in place. So if you had to just really take a step back and say, hey, I want Fire Nation to understand exactly the big takeaway from our entire conversation today about the rise of the digital nomad, what would that big takeaway be? The big takeaway is if it's something you've aspired to, you see your friends like, hey, living in Thailand for a few months, don't be so afraid to just take the leap.

19:03I mean, worst case scenario, as a friend of mine wanted to move to Costa Rica a few years ago and he was a little nervous about doing it. I'm like, what happens if I don't like it? Well, man, they sell plane tickets every day. Just go do it. But don't hesitate. It might be an amazing lifestyle for you. And you might realize after a year, like, nah, this is boring. I don't want to do this. I really want to go back and settle in the white picket fence life. Well, do that. But what I want people to get from the takeaway is it's a great lifestyle. It's exciting. It's interesting. You can meet a lot of really interesting people.

19:39You get a global perspective. You get to experience different cultures. And I think it's absolutely worthwhile to do it, even if you're not going to do it for the rest of your life. I think it's a worthwhile thing to attempt, at least for a short period of time, just to have that experience. But don't be afraid. Don't have that fear to do it, because all of these obstacles are surmountable, like you even mentioned with residency. It's not that hard to get residency in a lot of countries. and especially now we have all these digital nomad visas popping up everywhere. It's really not that hard to do all this stuff.

20:17And my big takeaway is if you want to do it, go for it. Don't be afraid to take the leap. Bobby, if Fire Nation wants to connect with you, wants to learn more from you, what is your call to action for our listeners today? My main business and the main way to reach out to me is through that company. The website is businessanywhere.io. We do work heavily with location independent entrepreneurs. We do company formations, registered agent service. We offer a virtual mailbox service, which is obviously directly targeted at location independent people, notary service, company compliance, bank account openings, stuff like that.

21:01So the best way to reach out there would be businessanywhere.io. Businessanywhere.io. And Fire Nation, you're the average of the five people you spend the most time with. And you've been hanging out with BC and JLD today. So keep up the heat. And for links to everything we talked about, visit eofire.com, type Bobby in the search bar. The show notes page will pop right up. And Bobby, thank you for sharing your truth, your knowledge, your value with Fire Nation. For that, we salute you and we'll catch you on the flip side. Thanks, John. Hey, Fire Nation, a huge thank you to our sponsors and Bobby today for sponsoring today's episode.

21:36And Fire Nation, successful entrepreneurs are great at three things, productivity, discipline, focus. That's why I created the Mastery Journal so that you can master these three things in 100 days. And we're talking step-by-step. Visit themasteryjournal.com. I will catch you there or on the flip side. The Next Wave, your chief AI officer, hosted by Matt Wolfe and Nathan Lands, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Matt and Nathan are leading AI creators in your guiding light in the AI and technology frontier. AI technology is transforming the way we do business and the media landscape is fragmented.

22:15The Next Wave strives to be the leading podcast on AI technology and how you can apply it to growing your business. Listen to The Next Wave wherever you get your podcasts.

22:30Thank you.