Governments lockdowns and business restructurings have millions of people working from home opposed to going to the office.
Areas dominated by tech jobs like Silicon Valley have experienced some of the most radical changes. By their nature, tech jobs make transitioning to remote work relatively easy.
The feasibility of remote work certainly played a large part in Google’s decision to close its offices for the remainder of 2020 – it wouldn’t be surprising if this policy continues in 2021. It’s been reported that Pinterest is paying almost $90 million to break its lease in San Francisco.
Thousands of tech employees are questioning the need to stay physically located in Silicon Valley.
California already has some of the highest taxes in the nation – new tax proposals would increase the top rate to 54%! Some proposals would apply the new tax hikes retroactively (unfortunately, this is legal)!
The benefits that ordinarily come with living in a city like San Francisco are disappearing – many restaurants are closed for good – concert venues and other cultural hubs are shut down.
Increasing homelessness and ongoing civil unrest are making city life even less attractive.
With some of the highest real estate prices in the world, many tech workers in Silicon Valley earning well into the six figures have roommates to help make ends meet.
Texas, Nevada, Wyoming, and other states with no income tax have been attracting tech workers. Moving to these states can save tech workers a decent chunk of change… but remote workers fleeing areas like Silicon Valley can save significantly more by moving abroad.
By becoming a bona fide resident of a country with no income tax (or no applicable income taxes), Americans can earn $107,600 (or, $215,200 for married couples) and legally pay $0 in income tax using the Foreign Earned Income Exclusion.
Plus, Americans living abroad can exclude an additional $32,280 (at minimum) from their taxable income under the Foreign Housing Allowance. Residents of certain jurisdictions and cities can exclude even more due to higher costs of living.
Ordinarily, there is a catch – receiving income personally would result in you being responsible for self-employment tax (a self-employed person’s FICA taxes) of 15.3%.
But Americans living abroad can avoid FICA by forming a foreign company and becoming an employee of it.
US Digital Nomad Solution
We created the US Digital Nomad Solution for people like tech workers leaving Silicon Valley and other Americans with the ability to work remotely while living abroad.
Here’s how it works.
First, you’ll need to become a resident of a no-tax country.
Second, we’ll help you form a RAKICC company and have your income paid to it.
Third, we’ll draft an employment contract so you are an employee of your RAKICC company.
Fourth, structure your salary to be inline with certain tax provisions and exclusions. Combined, these steps allow you to earn $107,600 (or $215,200 for married couples) and pay $0 in income taxes. You’ll also be able to exclude an additional $32,280 (at minimum) for your housing expenses.
Additionally, your foreign company can deduct legitimate business expenses, like business travel, computers, cell phones, software, etc. Income in excess of the excluded amounts and business expenses is subject to the US’ Global Intangible Low Taxed Income (GILTI) tax of 10.5%.
Because you are living abroad and are an employee of a foreign company, you will not owe FICA (Social Security and Medicare) taxes.
The US Digital Nomad Solution includes:
- One United Arab Emirates RAKICC company
- Formation fees
- First year Registered Agent fees
- Company documents
- Memorandum and Articles of Association
- Sample Resolutions
- Certificate of Incorporation
- Register of Members
- Register of Directors
- Banking introductions upon request
- Employment contract with your RAKICC company
- Best practices guide
It also includes a one-on-one consultation with an international tax expert.
Start to finish, we’ll make sure that everything is setup properly to secure the benefits listed above.
No nickel and diming.
No bait and switch.
The US Digital Nomad Solution is a done-for-you service. After making the decision to leave a place like Silicon Valley, your biggest stress might be choosing where to live – click here to read a list of over two dozen countries and jurisdictions with no (or, no applicable) income taxes.