THE SIX FLAGS THEORY
The PT's Six Flags Unfurled
"Where Liberty Is, There is My Country"
(Benjamin Franklin)
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IMPORTANT LEGAL DISCLAIMER: The contents
of this report are not intended as legal advice. It is void where prohibited by
law. This report is distributed on a worldwide basis via the internet and as
such its advice must be very general in nature. Some of the strategies and
ideas outlined in this report may be heretic or illegal if implemented by
residents or citizens of some countries. You and we are free to have and
distribute ideas. But before implementing them you should take advice from a
suitably qualified professional. It is not our intention to encourage anyone to
break any laws. We expressly disclaim any and all responsibility for your
damages or losses incurred if you act on your understanding of any ideas or
suggestions in this report. Before making any moves that could go wrong, we
suggest you have a consultation with one of our recommended experts or your own
lawyer. Get an opinion in writing on exactly how to do it. Always take proper
professional advice.
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The publishers
and editors specifically advise you NOT to break any laws that may be
applicable to you.
HARRY SCHULTZ
In 1964, Harry
D. Schultz - the world's highest paid financial consultant, according to
"Guinness Book of World Records", and author of a number of books on
investing that were bestsellers in the 1970s - published a book entitled
"How to Keep Your Money and Your Freedom". He espoused his Three
Flags concept that described the need to have a second passport, a safe
location for your assets outside your own country and a legal address in a tax
haven. The concept later expanded to Five Flags to include a conventional place
of business and a place to play.
W.G. HILL
Dr. W. G. Hill,
former American citizen, entrepreneur, self-made millionaire, author and
inveterate traveler, was influenced by the concepts of Harry Schultz. He had
found a winning formula on which to base his future. In 1989, after years of
living a PT lifestyle and fine tuning many new ideas, Hill wrote the first
definitive book on the subject, entitled "PT". This valuable work
discusses the essence of the philosophy and is definitely recommended reading
for anyone who aspires to a free and uncompromising way of life.
SIX FLAGS UNFURLED
PT is not a fixed set of rules. It's just a way of thinking... an attitude to life.
In a classic
1950s pamphlet, he explained how this ideal can easily be achieved by spreading
your interests out over various unrelated countries. It's not expensive (indeed
it's probably cheaper than any alternative). He wrote about international
arbitrage through the use of three different nations, jurisdictions, or - as he
called them - 'flags.' Later, in the 1980s, legendary author W.G. Hill expanded
the number of flags to five - so it became the 'Five Flags Theory.'
The original
theory was based on ‘three flags.’ During the eighties and early nineties, this
grew to five flags.
With the advent
of the internet and cyberspace, when Bye Bye Big Brother was first published in
2006, we added a sixth flag to the previous flags. Marvelous new opportunities
had been opened up that were 'made for PTs' as a result of the internet.
Cyberspace was added as the sixth flag that brings all the other five flags
together.
W.G. Hill, and
later Grandpa, have always been at pains to point out that the Six Flags Theory
is not a hard or fast set of rules. It is rather an attempt at putting a little
structure to the PT lifestyle so people can understand what international arbitrage
really means.
Almost nobody
really lives the six flag lifestyle, but many people choose to live parts of
it. Living is an art, not a science, and each individual will interpret PT
ideas in his or her own way.
What's a PT?
In a nutshell, a PT - The Perpetual Traveler merely arranges his or her paperwork in such a way that all governments consider him a tourist. A PT is somebody who is Prepared Thoroughly for any eventuality or situation. A PT lives stress-free and sleeps soundly at night because he or she is Prepared Thoroughly and free to concentrate on the good things in life.
A person who is
just "Passing Through”. The advantage is that being thought of by
government officials as a person who is merely "Parked Temporarily",
a PT is not subjected to taxes, military service, lawsuits, or persecution for
partaking in innocent but forbidden pursuits or pleasures. Unlike most citizens
or subjects, the PT will not be persecuted for his beliefs or lack of them. PT
stands for many things:
A PT can be a….
"Prior Taxpayer"
"Prepared Thoroughly”
“Protector of Treasure”
“Potentially Treason”
“Privacy Thinker"
"Privacy Trained"
"Proto Types”
“A Possibility Thinker”
"People of
Talent”
“Pretty Tasty”
"Perpetual Tourists”
“Perpetual Traveler"
"Permanent Tourist" who is just Parked
Temporarily”
"Practically Transparent"
"Permanent Traveler" just "Passing
Through"
“It’s the Perfect Thing”
The individual
who is a PT can stay in one place most of the time. Or all of the time. PT is a
concept, a way of life, a way of perceiving the universe and your place in it.
One can be a full-time PT or a part-time PT. Some may not want to break out all
at once, or become a PT at all. They just want to be aware of the
possibilities, and be prepared to modify their lifestyle in the event of a
crisis. Knowledge will make you sort of a PT. A "Possibility Thinker"
who is "Prepared Thoroughly" for the future.
PT is also a form of defense: Protection against Tyranny. Some people have called PT "a
coherent plan for a happy, prosperous international lifestyle." PTs would
probably just say it is the 'Perfect Thing.'
Under the guise
of helping us ("for your own safety") governments have intruded into
every area of our lives, taking the largest part of our earnings in taxes and
rewarding us with little aside from restrictions and harassment.
PT is a way to assert your freedom - to escape from the growing repression and intrusiveness of Big
Governments everywhere. Like the corporations who have learned to
internationalize and diversify, PT shows productive people how to get out from
under the thumb of Big Brother. An alternative title could be: How to Remake
Yourself into a One Man Multinational.
PTs don't ask
for or expect government help or protection in any way. In the same way, we
refuse to contribute to superfluous socialist welfare states. But we don't
believe in fighting. We will simply resist quietly, under the radar. Hopefully, nobody will ever notice we have gone!
The PT's Six Flags Unfurled
INTRODUCING THE SIX FLAGS
Today, millions
of the wealthiest and most productive people on the planet take advantage of
the best that each country has to offer. Governments are viewed as providers of
facilities and services, like hotel keepers. If they offer good accommodation
and make you feel comfortable and prosperous, you stay. If your government
becomes too demanding or too nosy, or if a competitor offers a better deal, you
can move on.
Economic
opportunities, financial privacy, taxes, extradition treaties, social values,
military obligations, quality of passport, stability of government, medical
standards, respect for property rights, personal safety and freedom of travel,
thought and action – these factors are all taken into consideration when
choosing legal residence and citizenship.
People of
intelligence and wealth owe it to themselves and their descendants to have more
than one flag. No one with common sense should give all their assets or
allegiance to just one country, one flag.
Why? No country
or government has ever survived more than a few generations without totally
annihilating itself or its own middle and upper classes.
Even in that
last bastion of capitalism, the US, people of property have been thrice pushed
out of the country. In 1780, the entire middle and ruling class was forced to
move to Canada. They were the Tories who supported England in the American
Revolution or War of Independence. In 1865, it happened again. All large land
owners who supported the Confederacy in the Civil War migrated to Mexico,
Europe or South America.
In the post-1917
period, prohibition, compulsory military service, confiscatory income taxes and
suffocating government regulations once again caused many independent-minded
Americans and their European counterparts to seek new flags. They made the
amazing discovery that as expatriates or tax exiles abroad, they need not
belong to any particular country nor participate in its senseless policies.
Ernest Hemingway and Gertrude Stein might be
considered early PTs (Proto Types).
The PT’s
relationship with – or divorce from – government is a matter of choice. It is
an option. The passport you hold and the country where you live need not be a
burden that you were born to and will be saddled with forever. No government
can be trusted to control your money. They will not take your best interests to
heart. Politicians are interested in redistributing wealth – usually into their
own pockets. In the end, they will only succeed in redistributing taxpayers.
The major portion of all liquid private wealth, the smart money, has already
been anonymously registered offshore. It has been reflagged.
Individuals can
remove themselves from the control and jurisdiction of any government by
acquiring dual citizenship, investing internationally and becoming human
multinationals. Departing physically and permanently is not required. A PT can live where he wants and leave when he wants. The secret is paperwork to effect a
change of legal status. Many wondrous benefits can be achieved by merely
wrapping yourself and your assets in a new flag.
YOUR SIX FLAGS UNFURLED
In order to accomplish this miracle, you merely have to re-arrange, relocate and re-title your possessions and persona according to this simple outline. Your six flags are:
First Flag:
PASSPORT AND SECOND CITIZENSHIP
In addition to
the passport of your native country, you should hold one or more passports from
small, neutral and respectable nations. They do not try to tax their citizens living outside their territory nor draft them into military service. These
passports should ideally allow visa-free access to as many nations as possible. We recommend European Union followed by Latin American passports for ease of travel.
These should be
from a country unconcerned about its offshore citizens and what they do outside
its borders. There must be no tax or military requirement for non-residents.
Passports must be available to foreigners relatively easily. Dual or multiple
nationality is one of the cornerstones of the PT philosophy. The PT should
strive to have several passports regardless of original nationality. A second
passport always comes in handy and has often saved the skin of many an
individual during times of war, persecution and political upheaval.
Second Flag:
RESIDENCE AND DOMICILE
A legal or
fiscal address in Monaco, a Channel Island or Andorra.
These should
generally be in a tax haven with good communication systems. A place where
wealthy, productive people can be creative, live, relax, prosper and enjoy
themselves, preferably with bank secrecy and no threat of war or revolution.
Monaco, the Channel Islands, Campione, Andorra, Bermuda and the Bahamas are all
recommended. Dominican Republic and other Caribbean islands are good
second-rate contenders.
This is your
official residence. A country that regards you as a bona fide resident,
although you might not actually spend too much (or any) time there. It should
be a country that does not tax income earned abroad, the effect of which is that you
don't have to file any personal tax returns anywhere. Tax havens like Turks and
Caicos, Panama and Andorra are good low-budget candidates. Bermuda,
Liechtenstein, Switzerland and Monaco are more up-market - if you can afford
them. In the first world, the UK, Italy and Ireland are also worth considering
because of their no-tax treatment of foreigners. Most Asian, Central and South
American countries do not tax offshore incomes, and many of these countries,
like Paraguay (and believe it or not, North Korea!) have no income taxes at
all. They are de-facto tax havens. But then again, the whole world is a fiscal
paradise for PTs who arrange their paperwork properly.
Third Flag:
BUSINESS BASES
A business or
source of income in New York, London or Singapore.
These are places
where you actually earn your money. If you own an existing business that can't
be moved, you may not have much choice in the matter: you may have to bite the
bullet and pay some taxes. Almost all businesses can be gradually shifted abroad
by outsourcing and exporting more. If you earn money with your skills, you can
probably re-domicile and operate in cyberspace (on the internet). Or choose an
offshore tax haven as your physical business base. Then you are tax free.
Either way, your business will be incorporated, to insulate against personal
liability.
Ideally, you
will set up the paperwork properly and you will never have to file personal tax
returns, nor need any permits, licenses or special dispensations.
Good access to
contacts, labor markets or materials is also important. London, Tokyo and New
York are the big centers for finance and insurance. Zurich, Milan, Singapore
and Frankfurt are among the second-ranked contenders. But in today's global
economy, you could frankly base your business anywhere. Wild-card contenders
such as Estonia, Malaysia or Panama are out there competing to offer you a
business haven. They all deserve a serious look.
They should also
be places that give free land, grant interest-free loans and offer a tax
holiday to your business without subjecting you to overregulation. Good access
to markets, a cooperative workforce and needed materials are also important.
London, Tokyo and New York are the big apples for finance and insurance.
Zurich, Milan, Singapore and Frankfurt are among the good second-rank
contenders. Even oppressive regimes like China, Russia and the CIS countries
will offer interesting concessions to the PT interested in manufacturing,
assembling or distribution.
Fourth Flag:
ASSET HAVENS & MANAGEMENT
These countries
are where you keep your savings and investments, safely salted away from where
your money is actually earned or spent. They should score highly on respect for
privacy, communications, professionalism and stability. Your assets, kept in secret
numbered accounts, will be controlled with hacker-proof encrypted electronic
messages or personal visits only. Naturally, you don't live, play or do much
business in the place where your assets are discreetly planted. And it is
important to have a banking passport from a country that does not (by treaty or
otherwise) insist your banking haven give them a full dossier on your
activities.
You can have
several asset havens. Top-ranked candidates include Liechtenstein, Switzerland,
or Austria for non-EU or US citizens. Bankers in other locations may not yet be
up to the Swiss standards, but they fly under the radar and are more accessible
to people with moderate wealth. Read more about Private Banking Secrets.
Fifth Flag:
PLAYGROUNDS
Friends and fun in Paris, Bangkok, Manila, Buenos Aires, Sydney and San Francisco.
These are the
places where you actually physically spend your time. Quality of life is top
priority. Normally, because of legal restrictions on how long one may stay
without being considered resident for tax purposes, it is necessary to have
from two to four playgrounds, although other arrangements can be made if you
want to spend all of your time in one playground. However, for the most part,
the PT should try to avoid spending more than 90 days per year in any
particular country.
My personal
recommendations. For no nukes and good fishing: New Zealand. For the most
interesting sex life imaginable: Thailand, Costa Rica or the Philippines.[Note:
Since writing the unforgettable classic, Sex Havens for Tax Fiends, we have
discovered Sosua and Puerto Plata, Dominican Republic and give the area our top
score]. For a superb year round climate: San Diego, California,
USA, nearby Cabo
San Lucas at Baja California (Mexico) or Queensland, Australia. For the gourmet
in you: the French Riviera or Hong Kong. For stimulating parties and an active
social life: Paris, London or San Francisco. For the best things at the cheapest
prices: Singapore, Taiwan and Hong Kong (for consumer goods), Denmark (for
cars), Ireland (a summer home), Punta Del Este, Uruguay (winter home).
Sixth Flag:
ELECTRONIC HAVEN IN CYBERSPACE
In cyberspace, you can be everywhere and nowhere at the same time!
This is your
Internet Business, Communications and Cash Transmittal System. It's so cheap to
rent server space that it doesn't matter much where your servers and websites
are located. You can be physically anywhere, but invisible to all. Have a few
servers, and offshore sites. Best for them to be in places like Taiwan, Costa
Rica or Panama - or on far off islands, like Tuvalu or Niue.
Better still,
why not just totally distributed so you can change jurisdiction automatically
every two seconds - technology makes it possible and it is becoming easier by
the day. Your internet presence should emanate from any place where the net is
unregulated and untaxed. Your electronic base should be anywhere - where you
are not. With no physical presence, you can't be served with process or sued.
Your encrypted communications, files and data banks will be safe from private
or government snoopers. If 'authorities' in your server's host country bother
you - or if an ISP gives you grief - you just press 'delete.' With your sixth
flag you can take advantage of many new opportunities in the 21st Century
Information Age.
Your electronic
base should be anywhere – where you are not. With no physical presence, you
can’t be served with process or sued.
Your encrypted
communications, files and data banks will be safe from private or government
snoopers. If ‘authorities’ in your server’s host country bother you – or if an
ISP gives you grief – you just press ‘delete.’
With your sixth
flag, you can take advantage of many new opportunities in the 21st Century
Information Age.
Virtually all the Bye Bye Big Brother reports deal directly or obliquely with selecting and
setting up your six flags. Understanding the Six Flags theory is vital. We
strongly recommend you re-read it a few times so you can think more about it.
Until you get there, keep working at it.
One flag is better than none.
Two or three flags are better than one!
How does it apply to you?
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