How to become an NRI. And pay 0% tax, legally | Akshat Shrivastava

Summary

In this informative video, Akat Sastav discusses the importance of understanding tax residencies for wealth building and improving quality of life. He explains the concept using examples, such as the zero tax rate for personal income in the UAE, and how shifting tax residency can save on taxes. Sastav also covers the complexities of changing tax status, including employment visas, trade licenses, and the 182-day rule for tax residency in India. He concludes by highlighting the potential of international businesses and investments as tax-efficient strategies.

Takeaways

• 📚 Understanding tax residencies is crucial for optimizing tax payments and potentially improving quality of life.
• 🌐 The world is seeing an increase in taxation and a decrease in quality of life in some regions, prompting people to consider tax residency changes.
• 🏫 Akat Sastav, the speaker, has a background in consulting and running a hedge fund, and aims to share knowledge about wealth building through internationalization.
• 💡 Tax residency can significantly affect the amount of tax paid, with examples given of paying 0% tax in the UAE versus 30% in India.
• 🏠 Tax residency is distinct from citizenship; one can hold citizenship in one country and be a tax resident in another.
• 🔄 Shifting tax residency can be achieved by working, investing, or setting up a business in a different country.
• 📈 The concept of 'tax residency' is important for individuals looking to minimize their tax liabilities and maximize wealth.
• 🏦 The UAE is highlighted as an example where individuals can pay little to no tax, depending on their tax residency status.
• 🏦 The script mentions the 'golden visa' in the UAE, which allows expatriates to live in the country and potentially pay minimal tax on certain income streams.
• 📉 The script discusses the complexities of shifting tax residency, including the need to meet specific criteria to avoid being considered a tax resident in a high-tax country.
• 🌍 The video encourages viewers to learn more about tax residencies as a way to potentially save on taxes and enhance their financial situation in a global context.

Q & A

What is the main topic of the video?

The main topic of the video is understanding tax residencies and how commanding a good tax residency can help save taxes and improve quality of life.

Why is the speaker discussing tax residencies?

The speaker is discussing tax residencies because taxation is growing globally and the quality of life in many parts of the world is declining, prompting individuals to explore options for more tax-efficient jurisdictions.

What is the speaker's background?

The speaker, Akat Sastav, has worked with top-tier consulting firms and currently runs his own hedge fund. He is a full-time investor and shares knowledge gained from traveling and studying the investing world with HNIs (High Net Worth Individuals) on his YouTube channel.

What are the potential benefits of having a good tax residency?

Potential benefits of having a good tax residency include saving a significant amount on taxes and potentially improving one's quality of life by relocating to a country with a better economic and social environment.

What is the significance of the anecdote about the speaker's friend in Dubai?

The anecdote about the speaker's friend in Dubai illustrates the trend of people moving from high-tax countries like the UK to the Middle East for better economic opportunities and a lower tax burden.

What is the 20% TCS rule mentioned in the video?

The 20% TCS rule refers to the Indian tax regulation that requires individuals to withhold 20% tax when sending money outside of India, which can be a deterrent for those looking to move funds internationally.

How does the concept of citizenship relate to tax residency?

Citizenship is related to tax residency in that one can hold citizenship in one country but be a tax resident in another, which can impact the taxes they are required to pay.

What are some ways to change one's tax residency?

Ways to change one's tax residency include finding employment in a different country, setting up a business, or making significant investments that qualify for residency programs, such as the golden visa in Dubai.

Why might someone not be able to pay 0% tax despite moving to a country with a 0% personal income tax rate?

Someone might not be able to pay 0% tax even in a country with a 0% personal income tax rate if they spend a significant amount of time in their home country, which could make them a tax resident there, subjecting them to taxes on their worldwide income.

What is the concept of territorial taxation as discussed in the video?

Territorial taxation, as discussed in the video, refers to the principle that income generated from assets or services in a specific country is subject to tax in that country, regardless of where the individual resides.

What are some types of income streams that can be shifted to more tax-efficient jurisdictions?

Income streams that can potentially be shifted to more tax-efficient jurisdictions include internet-based services, consultancy, software firms, and export-oriented businesses.