Can silver nomads escape taxes?

Some countries offer extremely low tax rates on retirement income and capital gains. If you’re a silver nomad, taking advantage of short term visas to move from one low-cost country to another, how do you know where you need to declare and pay taxes? How much flexibility do you have in deciding on one country over another? Are retirees gaming the system? Is it possible to fall off the tax radar completely or will the banking system trip you up eventually? Is using bitcoin (or another virtual currency) a viable strategy to legally avoid declaring taxes? If you have a business that generates passive income, what’s the best country to set it up in to minimize tax reporting and taxes? Alistair McKechnie clears up a few misconceptions:

“Perpetual travel” or being a “PT” is a real strategy people use and – it appears – there’s a lot of legitimate, legal tax optimization possible here. But there are also a number of pitfalls for any aspiring tax avoider, since the mechanics matter a lot for whether something is legal avoidance or illegal evasion.

How tax residency actually gets determined

Most countries use some combination of:

• Day-count tests – commonly 183 days, though some countries use lower thresholds or look at rolling multi-year averages. (Check this handy flowchart if you’re unsure about your UK tax residency.)
• Center of vital interests – where your home, family, primary bank accounts, or economic ties are, which can trigger residency even below the day-count threshold
• Domicile/citizenship-based rules – the US and Eritrea(!) tax citizens on worldwide income regardless of residence, which is the big exception silver nomads from the US need to plan around differently than everyone else

If you spend time in multiple countries without triggering any single country’s residency test, you can genuinely end up not tax-resident anywhere for a given year. That’s legal. The catch is you usually still owe tax somewhere on income sourced from a specific country (e.g., a pension paid from your home country may have withholding tax regardless of where you live), and many “zero residency” people still keep a formal tax home somewhere for banking, visa, and practical reasons. In simple terms, unless you declare tax residency somewhere else, the country you source your pension income from will still take a cut.

How much flexibility you have

Quite a lot, especially if you’re not a US citizen. You can often legally choose your tax home by structuring where you spend time and where your economic ties sit. This is the whole premise behind places like the UAE, Georgia, Paraguay, Panama, Malaysia, and others that offer easy residency with low or no tax on foreign-source income. Where flexibility narrows: tie-breaker clauses in tax treaties, “habitual abode” tests, and increasingly aggressive economic substance requirements for anyone claiming to run a business from a low-tax jurisdiction.

Falling off the radar vs. the banking system

This is where the “clever gaming” idea mostly breaks down in practice. The Common Reporting Standard (CRS), now covering 100+ countries, means banks and brokerages automatically report account balances and holders to tax authorities based on your declared tax residency and citizenship — not based on you telling them nothing. Opening an account almost always requires a self-certification of tax residency, and banks cross-check this against your documents. The US runs a parallel system, FATCA, which is even more aggressive about tracking citizens abroad. So “invisible” doesn’t really exist anymore for anyone using normal banking — you’re not falling off the radar, you’re actively declaring a residency to open the account in the first place, and that declaration gets shared.

Crypto as a workaround

Using bitcoin or other crypto doesn’t create a legal way to avoid declaring taxes – it’s a common misconception. Tax obligations attach to the transaction (income, capital gain, disposal) not to the currency used, so trading, spending, or converting crypto is taxable the same as any other asset in essentially every jurisdiction with a functioning tax code. The idea that crypto is “off the books” is also eroding fast: the OECD’s Crypto-Asset Reporting Framework (CARF) is rolling out CRS-style automatic exchange specifically for crypto exchanges and custodians, with many countries starting reporting around 2026–2027. Using crypto specifically to avoid declaring income (rather than just as an asset class) crosses from avoidance into evasion, which is illegal regardless of which country you’re sitting in when you do it.

Passive-income business location

For minimizing tax reporting and tax on passive income, the jurisdictions typically discussed are places like the UAE, Cayman Islands, Malta, or Cyprus (within an EU holding structure), Singapore, or Puerto Rico (only relevant for US citizens, via Act 60). The real constraint isn’t picking a zero-tax jurisdiction – it’s Controlled Foreign Corporation (CFC) rules in your country of tax residence. Most higher-tax countries will look through a shell company with no real staff, office, or management in that country and tax the income as if you’d earned it personally in your country of residence. So the jurisdictions that actually work are ones where you can show genuine economic substance, or where your personal tax residence itself doesn’t have CFC rules. (Current CFC enforcers include, among others, USA, Mexico, Colombia, Brazil, UK, the EU, Russia, South Africa, Australia, New Zealand and China. Non-enforcers include Panama, Paraguay and the UAE.)

Caveat: I’m not a tax lawyer or advisor, and this area is genuinely jurisdiction-specific and fact-specific – treaty tie-breakers, CFC thresholds, and substance requirements vary a lot and change over time. For an actual structure, a cross-border tax advisor who specializes in this (not just a generalist) is worth the cost, because the line between “legal optimization” and “reportable evasion” is exactly where all the interesting savings live, and getting it wrong is expensive.

This article is for general information only and does not constitute financial, tax or immigration advice. Visa requirements, tax rules and income thresholds change frequently, are applied case by case, and depend on your own circumstances and the treaties between the countries involved. Please speak to a qualified, licensed adviser in both countries before making any decisions about relocating or restructuring your retirement income.